PSI Oklahoma Real Estate Practice Test

What document transforms a customer into a client in real estate?

1. A verbal agreement

2. A brokerage service agreement

3. A written lease contract

4. A bill of sale

The correct answer is: A brokerage service agreement

In real estate, the document that transforms a customer into a client is a brokerage service agreement. This agreement establishes a formal relationship between the client and the broker, outlining the specific services that the broker will provide along with the duties owed to the client. Once this agreement is signed, the broker has an obligation to provide fiduciary duties such as loyalty, confidentiality, and full disclosure to the client, which is a significant step beyond the basic engagement one might have as a customer. A verbal agreement does not typically provide the legal binding and the required disclosures that come with a written contract. A written lease contract is specifically related to rental agreements and does not establish a broker-client relationship. A bill of sale pertains to the transfer of ownership of personal property rather than real estate services. Therefore, the brokerage service agreement is the key document that formally transitions a customer to a client in the realm of real estate transactions.