Oregon Real Estate Practice Test

What is required for a broker to close a real estate transaction?

1. Written authorization from the principal broker

2. Verbal agreement from the client

3. Approval from a financial institution

4. Consent from a local government

The correct answer is: Written authorization from the principal broker

A broker must have written authorization from the principal broker to close a real estate transaction. This requirement is in place to ensure that all parties involved in the transaction are properly informed and that the transaction adheres to the legal and ethical standards set forth in the real estate industry. Written authorization serves as a formal agreement that protects both the broker's and the clients' interests, outlining the roles, responsibilities, and permissions granted to the broker during the transaction process. While verbal agreements or other types of consent might play a role in various aspects of real estate transactions, they are not sufficient on their own to authorize a broker to close a transaction. Additionally, approval from a financial institution and consent from local government entities are relevant in some contexts, such as financing and zoning approvals, but they do not substitute for the necessary written authorization from the principal broker, which is essential for the broker's ability to legally proceed with closing the transaction.