Designated agency solves the dual agency problem by assigning different agents within the same brokerage to each party. Each designated agent owes full fiduciary duties to their assigned client. The supervising broker remains neutral and must not share confidential information between the designated agents.
XYZ Realty has the listing for 123 Main St. A buyer contacts XYZ Realty wanting to purchase it. The broker designates Agent A to represent the seller and Agent B to represent the buyer, each owing full fiduciary duties to their respective client.
Designated agency is NOT the same as dual agency. In designated agency, each party gets their OWN agent with FULL fiduciary duties. The broker is the dual agent, not the individual agents. Not all states allow this.
Related Terms
Related Concepts
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
An agency relationship created when a principal's actions or words lead a third party to reasonably believe that an agent has authority, and the principal fails to correct this belief.
Frequently Asked Questions
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