Maryland Home Improvement PSI Practice Exam

Which of the following real estate contracts is classified as a service contract?

1. A purchase agreement

2. A listing agreement

3. An option contract

4. A mortgage

The correct answer is: A listing agreement

The listing agreement is classified as a service contract because it outlines the responsibilities and services that a real estate agent provides to a property owner in the process of selling their home. This contract specifies the agent's duty to market the property, negotiate on behalf of the seller, and handle various administrative tasks associated with the sale. It establishes a fiduciary relationship where the agent is expected to act in the best interests of the client, ensuring that the services provided are tailored to meet the client's needs in the real estate transaction. In contrast, a purchase agreement focuses on the terms and conditions of the sale itself, an option contract grants the right to purchase but does not involve ongoing services, and a mortgage typically sets the terms of a loan secured by the property, lacking the service element that characterizes a listing agreement.