Tennessee Real Estate License Exam Practice Question
In a jurisdiction where the common law of agency prevails, a buyer enters into a buyer agency agreement with a real estate licensee. This agreement establishes a
Correct Answer: C
Rationale: A buyer agency agreement creates a fiduciary relationship, where the agent has a legal obligation to act in the best interest of the buyer. This includes duties such as loyalty, confidentiality, and full disclosure.
Option A, dual agency, occurs when an agent represents both the buyer and seller, which is not the case here. Option B, sub-agency, involves an agent representing another agent's client, which does not apply to a direct buyer-agent relationship. Option D, customer relationship, lacks the legal obligations inherent in a fiduciary relationship, as it does not prioritize the client's interests.
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