What is necessary for a broker to legally represent a buyer or seller?

A signed agreement is necessary for a broker to legally represent a buyer or seller because it establishes a formal relationship and outlines the terms of representation. This agreement, often referred to as a listing agreement when representing a seller or a buyer's agency agreement when representing a buyer, defines the scope of the broker's duties and responsibilities, as well as the rights of both parties.

This formal documentation provides legal protections and clarifies expectations, ensuring that both the broker and the client understand their commitments. It also puts the broker in a position to act on behalf of the client in negotiations and various transactions, complying with state laws governing real estate practices. Without a signed agreement, the broker does not have the authorization to act on behalf of the buyer or seller, which can lead to potential disputes and a lack of accountability.

In contrast, the other options do not fulfill the legal requirements for representation. A verbal agreement lacks the enforceability and clarity of a written contract, previous sales experience does not constitute legal representation, and an open house event does not imply any formal relationship between a broker and a client.