PSI Virginia Real Estate Practice Exam

Which circumstance leads to termination of agency through completion/performance?

1. The agency fails to meet its goals

2. The broker sells the property

3. A new broker is hired

4. The term of the contract ends without a sale

The correct answer is: The broker sells the property

Termination of agency through completion or performance occurs when the specific task that established the agency relationship is fully executed. In this context, the agency is formed to facilitate the sale of a property, and once the broker successfully sells the property, the purpose of the agency agreement has been fulfilled. This completion signifies that the broker has performed the service they were hired for, thus leading to the termination of the agency agreement. The other options present scenarios that do not lead to termination through completion. If the agency fails to meet its goals, the agreement may be terminated, but it is not because the tasks were completed; rather, it reflects unmet expectations. Hiring a new broker also does not signify the completion of the original agency mission; instead, it could create a conflict or transition. Lastly, when the term of the contract ends without a sale, it is merely a lapse of time and does not indicate that the original task was completed. Thus, the situation in which the broker sells the property is the definitive action that marks the successful completion of the agency's purpose.