An arrangement where different agents within the same brokerage separately represent the buyer and seller.
Why Designated Agency matters on the exam
This term belongs to Agency. The questions below are real items from Freehold's bank that use it - each one cites its source.
Exam questions using Designated Agency
Every Freehold question shows why the right answer is right — and cites its source.
A brokerage that strictly practices single agency (and does not permit designated agency) would prohibit:
Any agent employed by the firm from ever representing a seller in any transaction the firm has listed for sale or lease
Agents from taking listings on vacant land or other unimproved parcels of record
The same firm from representing both the buyer and seller in the same transaction, even through two different agents
Buyers from being represented at all in any transaction handled by that brokerage
Show answer & explanation
The same firm from representing both the buyer and seller in the same transaction, even through two different agents — Strict single agency firms avoid representing both sides of the same deal altogether, unlike firms that use designated agency to separate representation between two agents in the same office.
Source: PSI National Real Estate Exam Content Outline §5 General Principles of Agency
How does true dual agency differ from designated agency?
There is no practical difference between them, since both describe a single firm serving two parties in one transaction
Designated agency is illegal in every state, while true dual agency is universally permitted without any written consent
True dual agency applies only to commercial property transactions, while designated agency is limited to residential sales of four units or fewer under applicable state licensing law and commission rule
In true dual agency, one licensee represents both parties with divided loyalty; in designated agency, different licensees within the same firm each represent one party with undivided loyalty
Show answer & explanation
In true dual agency, one licensee represents both parties with divided loyalty; in designated agency, different licensees within the same firm each represent one party with undivided loyalty — True dual agency involves a single licensee serving both sides with necessarily divided loyalty, while designated agency assigns separate licensees so each client still receives an undivided advocate.
Source: PSI National Real Estate Exam Content Outline §5 General Principles of Agency
In a transaction where a buyer and seller are represented by two different salespersons at the same brokerage, the supervising broker, absent a designated agency statute, may still be considered:
A dual agent at the firm level
Completely unrelated to the transaction
The buyer's sole agent only
A subagent of the seller side only
Show answer & explanation
A dual agent at the firm level — Without a designated agency statute separating the firm's dual role, the brokerage and its supervising broker may still be viewed as representing both parties, creating a firm-level dual agency.
Source: PSI National Real Estate Exam Content Outline §5 General Principles of Agency
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