What does a service agreement identify?

• A. A person
• B. The responsibilities of each party, the services to be performed, and any compensation payable
• C. The property boundaries
• D. The listing price

Answer: (B)

The main idea is that a service agreement sets out the terms of the client–broker relationship: who is responsible for what, what services will be provided, and how the broker will be compensated. It clearly defines the roles of each party, the scope of work the broker will perform, and the payment arrangement, so everyone knows their duties and what they’ll be paid for. This helps prevent misunderstandings as the transaction moves forward. It isn’t about property boundaries or listing prices—those are determined in other documents or processes (boundaries come from surveys and descriptions, listing price comes from the listing agreement or market considerations).