Under Pennsylvania law, a designated agent is:
Question & Answer
Review the question and all answer choices
A broker who represents both parties
Option A is incorrect because it describes dual agency, not designated agency. In dual agency, one broker represents both parties, whereas designated agency involves different licensees within the same firm representing each party separately.
A licensee appointed by a broker to represent one party in a dual agency situation
A licensee who only shows properties
Option C is incorrect because a licensee who only shows properties is typically a showing agent or salesperson, not a designated agent. This role is limited to property showings and does not involve formal agency representation.
An attorney representing a client
Option D is incorrect because an attorney is a legal professional, not a real estate licensee. While attorneys may provide legal advice in real estate transactions, they are not designated agents under Pennsylvania real estate law.
Why is this correct?
Option B correctly defines designated agency as a licensee appointed by a broker to represent one party in a dual agency situation. This accurately reflects Pennsylvania's approach where different agents within the same firm can represent each party, with each maintaining their fiduciary duties to their respective client.
Deep Analysis
AI-powered in-depth explanation of this concept
Agency relationships form the foundation of real estate transactions, determining how licensees represent clients and their responsibilities. This question tests understanding of Pennsylvania's designated agency concept, which allows brokerages to ethically represent both buyers and sellers in the same transaction. The core concept is that designated agency is not dual agency (where one agent represents both parties), but rather a specific structure where different agents within the same firm represent each party. To arrive at the correct answer, we must recognize that option A describes dual agency, not designated agency. Option C describes a showing agent, while option D is unrelated to real estate licensing. The challenge lies in distinguishing between different agency structures, which is critical for ethical practice and compliance. Understanding designated agency connects to broader knowledge of agency relationships, disclosure requirements, and fiduciary duties across different states.
Knowledge Background
Essential context and foundational knowledge
Designated agency originated as a solution to the ethical dilemma of dual agency. In Pennsylvania, this structure allows a brokerage to represent both parties in a transaction while preserving fiduciary duties. The broker acts as an intermediary, appointing different licensees to represent each party. This requires written consent from both parties and must be properly disclosed. The concept emerged as real estate transactions became more complex, recognizing that some transactions might benefit from having representation within the same firm while still protecting client interests.
Think of designated agency like a tennis match with two different coaches (agents) from the same academy (brokerage) representing each player. Each coach has a duty to their own player, even though they work for the same organization.
When you see 'designated agency,' visualize two coaches from the same academy on opposite sides of a tennis court, each focused on their own player's success.
For agency questions, focus on who represents whom and whether they're from the same brokerage. Designated agency always involves separate agents from the same firm representing each party, with proper disclosure and consent.
Real World Application
How this concept applies in actual real estate practice
Imagine a buyer and seller both want to work with Re/Max Realty. Under designated agency, the broker can assign Agent A to represent the buyer and Agent B to represent the seller. Both agents work for the same brokerage but have separate fiduciary duties. They must disclose their designated agency relationship to both parties and obtain written consent. This allows the transaction to proceed while ensuring each client has dedicated representation, even though the brokerage represents both sides.
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