Sarah is an affiliate broker at Volunteer Realty who has been working with the Johnsons as their buyer's agent. The Johnsons fall in love with a home listed by Sarah's colleague Mark, who is also an affiliate broker at Volunteer Realty. The broker-in-charge assigns Sarah to represent the buyers and Mark to represent the seller. What type of agency relationship does this arrangement create under Tennessee law?
Correct Answer
C) Designated agency, because different affiliate brokers represent each party
Tennessee law recognizes designated agency, where a broker-in-charge assigns different affiliate brokers within the same firm to represent each party separately. This avoids true dual agency while keeping the transaction within one brokerage. Tenn. Code Ann. § 62-13-401 et seq. explicitly authorizes this arrangement.
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Related Topics & Key Terms
Key Terms:
Related Concepts
In real estate, a client is someone to whom the agent owes fiduciary duties through an agency relationship, while a customer is a third party to whom the agent owes only honesty and fair dealing.
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.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
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