Designated Agency
Definition
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
Example
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.
Exam Tip
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 Agency Terms
Agency Relationship
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.
Fiduciary Duty
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.
Dual Agency
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
Transaction Brokerage
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.
Agency by Estoppel
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.
Agency by Ratification
An agency relationship created when a principal approves or accepts an agent's previously unauthorized actions, effectively granting authority after the fact.
Frequently Asked Questions
Test Your Agency Knowledge
Practice with exam-style questions to make sure you can apply Designated Agency and other agency concepts.