Reviewed by Casa Academy and updated July 28, 2026 using the current DBPR checklist and Pearson VUE scheduling guidance.
Agency
Agency is the legal relationship in which a broker or sales associate (the agent) acts on behalf of a client (the principal) with authority to affect the client's legal position, usually under written agreement and state license law.
Exam context
Look for fact patterns about signed buyer representation agreements, open-house visitors who have not signed, or a broker representing both sides after written consent. The correct answer usually hinges on duty level and required disclosures, not on marketing language.
Why agency matters on licensing exams
State exams frequently test who owes fiduciary duties, when agency begins and ends, and how disclosure rules change when the same firm represents more than one party. Missing a single agency fact pattern can flip an entire question about contracts, commissions, or fair housing.
Common agency types you should recognize
Seller agency, buyer agency, and disclosed dual agency appear in most state outlines. Some states add designated agency or transaction brokerage models. Know which duties attach in each model: loyalty, confidentiality, disclosure, obedience to lawful instructions, reasonable care, and accounting for funds.
Agency vs. other business relationships
A customer receives honest dealing and disclosure required by law but not the full fiduciary package owed to a client. A subagent works through the listing broker's chain of agency. Treat every exam vignette by identifying the principal, the agent, and whether the party is a client or customer before picking an answer.
Examples
Buyer client scenario
A sales associate shows homes only to a buyer who signed a buyer brokerage agreement. The associate must prioritize the buyer's interests, keep confidential information private, and disclose material facts about each property.
Customer at an open house
A visitor asks detailed questions but refuses to sign agency paperwork. The licensee still must treat the visitor honestly and disclose latent defects known to the licensee, but fiduciary loyalty runs to the seller client unless a buyer agency relationship is formed.
Keep studying
Related terms
- Fiduciary dutyCore duties owed to clients in an agency relationship.
- Dual agencyWhen one firm represents opposing parties with required consent.
Related resources
- Free exam prep
Practice agency-related questions with instant feedback.
- Florida exam topic hub
Florida-specific agency law explainers and question sets.
- Real estate glossary hub
Browse all published national glossary entries.
Sources
- NAR Code of Ethics and Standards of Practice(National Association of REALTORS)
- Florida DBPR real estate licensing(Florida DBPR)