Affiliate Broker Tennessee (TN PSI) National Practice Exam `

Under which circumstance would a client and agent likely agree to terminate a listing?

1. Agent is moving to another city

2. They disagree on property pricing

3. Intending to renovate the property

4. Property is under contract

The correct answer is: They disagree on property pricing

When a client and agent disagree on property pricing, it can create a significant barrier to effectively marketing and selling the property. Pricing is a critical component of a successful listing, and if the client believes the agent's suggested price is too low or unrealistic, or if the agent feels the client's expectations are not aligned with the market, this disagreement can lead to frustration on both sides. An agent's role is to provide expertise on market values based on comparable sales, market conditions, and other factors, while the client's perception of value may be influenced by emotional attachment or different market assumptions. When this fundamental aspect of the listing is contentious, it often results in the client deciding to terminate the listing agreement in pursuit of an agent whose pricing strategy aligns better with their expectations. In other scenarios, such as an agent relocating to another city or when the property is under contract, the reasons for termination do not stem from a disagreement between the client and the agent regarding the property's value or marketing strategy. Likewise, intentions to renovate the property signal a potential change in strategy, but do not inherently require the termination of an existing listing unless paired with a significant pricing disagreement.