Tennessee Realtor State Practice Exam

What type of agency agreement creates a relationship between a buyer and a broker, including all of the broker's affiliates?

1. Exclusive seller agency

2. Traditional buyer agency

3. Open listing agreement

4. Transactional agency

The correct answer is: Traditional buyer agency

The relationship between a buyer and a broker that includes all of the broker's affiliates is best represented by traditional buyer agency. In this arrangement, the broker acts exclusively on behalf of the buyer, fostering a fiduciary relationship where the buyer's interests are prioritized. This type of agency is characterized by the broker providing various services directly to the buyer, often extending this representation to their affiliates (such as assistants, other agents within the brokerage, and associated personnel). It establishes a strong advocacy role for the buyer, ensuring that the broker works diligently to negotiate terms favorable to the buyer's needs, including price, conditions, and timelines. In contrast, exclusive seller agency focuses on representing the seller's interests in a transaction, whereas an open listing agreement allows sellers to work with multiple agents, providing little commitment or loyalty to any single agent. Meanwhile, transactional agency refers to a non-fiduciary role where the broker facilitates a transaction without advocating for either party. Thus, traditional buyer agency is the most accurate choice as it specifically denotes the comprehensive representation of the buyer by the broker and their affiliates.