Broker Elena's New Jersey firm lists a property for seller Marcus at $450,000. Salesperson David, affiliated with Elena's firm, has been working with buyer Priya under a signed buyer representation agreement. Priya wants to purchase Marcus's property. Elena's firm has a designated agency policy, and Elena designates David as Priya's designated agent and salesperson Fiona as Marcus's designated agent. Priya tells David that she believes the property is worth only $410,000 based on her own research and asks David whether she should offer $410,000 or $425,000. What should David do?
Correct Answer
B) Advise Priya based on his professional judgment and comparable market data, acting as her exclusive advocate
Under New Jersey's designated agency framework (N.J.A.C. 11:5-6.9), a designated agent may act as the exclusive advocate for their designated client, providing full fiduciary representation including pricing advice. David, as Priya's designated agent, owes her undivided loyalty within the transaction and may — indeed should — advise her on offer strategy based on his professional judgment and comparable sales data. This is the primary advantage of designated agency over dual agency: designated agents can provide complete advocacy for their respective clients.
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Related Topics & Key Terms
Key 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 legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
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