Tennessee Realtor State Practice Exam

What is not a benefit of having a designated agent?

1. Increased focus on the client's needs

2. Greater operational independence

3. Higher commission structures

4. Reduced risk of dual agency

The correct answer is: Higher commission structures

Having a designated agent is beneficial for several reasons, but higher commission structures are not one of them. Designated agents work to ensure that a client’s individual needs are prioritized, which can lead to better service and tailored strategies. They also provide increased operational independence, allowing for a more focused approach to each client without the conflicts that might arise in a traditional agency setting where multiple clients are represented by the same agent. Additionally, designating an agent reduces the risk of dual agency, which can occur when the same agent represents both the buyer and the seller in a transaction, potentially leading to conflicts of interest and ethical dilemmas. However, the idea of higher commission structures is not inherently tied to the role of a designated agent. Commission rates are usually consistent across the board and are governed by the agreement between the agent and the client, rather than being a direct benefit of the agency model itself. Therefore, higher commission structures do not represent a valid advantage of having a designated agent.