New York State Real Estate Salesperson Licensing Exam

What is it called when an agent represents the seller but also prioritizes the buyer's interests?

1. Disclosure agreement

2. Undisclosed dual agency

3. Exclusive agency

4. Implied consent agency

The correct answer is: Undisclosed dual agency

In the context of real estate transactions, the term being referred to is undisclosed dual agency. This occurs when an agent represents both the seller and the buyer in a transaction without disclosing this dual representation to the parties involved. The agent's primary allegiance is to the seller, but they may also have a responsibility to the buyer’s interests, leading to a conflict of interest. The ethical and legal implications of this situation can be quite significant, as it can limit the agent's ability to fully advocate for either party's best interests. Proper disclosure is crucial because each party deserves to know that the agent is serving both sides, which may influence negotiations and outcomes. In contrast, other options do not adequately explain this scenario. A disclosure agreement typically refers to a formal document that informs parties about certain aspects of the transaction rather than the nature of the agency relationship. Exclusive agency involves a seller retaining a broker but also holding the right to sell the property independently without incurring a commission, which does not address dual representation. Implied consent agency usually pertains to an agent’s authority inferred from the actions of the parties rather than the relationship of representing both sides in a real estate transaction.