PSI New Jersey Real Estate State Practice Exam

Which document is essential to verify a seller's financial commitment and intention to sell?

1. Sales contract

2. Title report

3. Property inspection report

4. Listing agreement

The correct answer is: Listing agreement

The listing agreement is essential to verify a seller's financial commitment and intention to sell because it is a formal contract between the seller and the real estate broker. This document outlines the terms and conditions under which the broker will market the property and contains the seller's authorization to sell. By signing this agreement, the seller demonstrates their commitment to the sale of the property and provides the broker with the necessary authority to act on their behalf. In evaluating the other options, the sales contract, while important, is typically executed after an offer has been accepted, so it may not reflect the seller's initial commitment to selling. The title report is useful for confirming ownership and outstanding liens but doesn’t directly indicate a seller's intention to sell. The property inspection report provides insight into the condition of the property but also does not serve as a declaration of intent to sell. Thus, the listing agreement is the key document that confirms both the seller's financial commitment and intention to proceed with the sale.