Agency
National Real Estate Exam glossary · Agency
Definition
The fiduciary relationship in which one person (the agent) is authorized to act on behalf of and in the best interest of another (the principal). Agency may arise by express agreement, by implication from conduct, or by estoppel; it defines to whom the licensee owes the full set of fiduciary duties.
Agency in plain English
Agency is the trusted relationship where one person (the agent) is officially allowed to act for another (the principal) and must put that person's interests first — like a captain steering the ship on the owner's behalf. In real estate, this matters because it decides exactly whose side the licensee is truly on and who they owe total loyalty, honesty, and confidentiality to. This bond can form three ways: by a written or spoken agreement, by how people act (you behave like their agent, so you are one), or by 'estoppel' — meaning if someone let others reasonably believe you were their agent, the law won't let them deny it later. The point of pinning down agency is that once it exists, the agent owes the full package of fiduciary duties, so everyone knows where loyalty lies.
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Practice Agency
A homeowner hires a brokerage to market the homeowner’s… Who is the principal in this relationship?
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