Before a homeowner signs an agency agreement to sell their residential property, what must the agent do under s 127 of the Real Estate Agents Act 2008?
Correct Answer
A) Give them the approved agency agreement guide and get a signed acknowledgment of receipt.
Section 127(1) says an agent must not enter into an agency agreement for the sale of residential property unless the person has been given a copy of the approved guide before signing, and the agent has received a signed acknowledgment that the person was given it. REA's approved guide is the New Zealand Residential Property Agency Agreement Guide.
Why This Is the Correct Answer
Section 127(1) requires both provision of the approved guide and a signed acknowledgment, before signing.
Why the Other Options Are Wrong
Option B: Give them the sale and purchase agreement guide once an offer has been accepted in writing.
That guide is given before a sale and purchase agreement is signed; s 127 concerns the agency agreement guide.
Option C: Read the guide aloud to them, since a verbal explanation satisfies the requirement.
Section 127 requires a copy of the approved guide and a signed acknowledgment, not an oral reading.
Option D: Tell them where the guide can be found online, with no acknowledgment needed.
The client must be provided with the guide and must sign an acknowledgment that they received it.
Background Knowledge for Agency Practice
Source: https://www.legislation.govt.nz/act/public/2008/0066/latest/whole.html
Exam Tip for Agency Practice
Residential listing: guide first, signed acknowledgment, then the agency agreement.
Common Mistakes to Avoid on Agency Practice Questions
- •Confusing the agency agreement guide with the sale and purchase agreement guide.
More Agency Practice Questions
A real estate agent receives two offers on a property at the same time. What is their primary obligation?
Which of the following situations would create a conflict of interest requiring disclosure by a real estate licensee?
Sarah is a licensed salesperson working for ABC Real Estate. When showing a property to buyers, who does she primarily represent?
Under the Real Estate Agents Act 2008, what is the primary duty that a real estate agent owes to their client?
Which licence allows a person to carry out real estate agency work for an agent, but only under supervision?
- → Under section 126 of the Real Estate Agents Act 2008, what must happen after the client signs an agency agreement for the agent to be entitled to commission?
- → A licensed agent discovers that their salesperson has been providing advice about tax implications of a property investment without appropriate qualifications. What is the agent's responsibility?
- → An agency agreement contains a clause stating that the agent's commission is payable even if the property is sold by the vendor directly to a buyer introduced by the agent during the agency period, but the sale settles after the agency expires. Is this clause enforceable?
- → What must a real estate agent disclose to a potential purchaser when showing a property?
- → Under a sole agency agreement, when is the vendor still liable to pay commission to the agent?
- → Sarah holds a salesperson's licence and works for ABC Real Estate. When presenting an offer to a vendor, who is legally responsible for ensuring all disclosure obligations are met?
- → A real estate agent discovers that a property has a leaky roof after the agency agreement is signed but before any offers are received. What is the agent's obligation?
- → Which of the following allows an agent to end an agency agreement before its expiry date?
- → Under the Real Estate Agents Act 2008, what is the primary fiduciary duty that a real estate agent owes to their client?
- → What must a licensee do when they become aware of a material defect in a property they are marketing?
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