Agency Glossary

Agency by Estoppel

An agency relationship created when a principal's conduct leads a third party to reasonably believe an agency exists.

Agency by Ratification

An agency relationship created when a principal approves and accepts an unauthorized act performed on their behalf.

Client

A party who has an agency relationship with a broker, owed full fiduciary duties.

Customer

A party in a real estate transaction who is not represented by an agent but is still owed honesty and fair dealing.

Designated Agency

An arrangement where different agents within the same brokerage separately represent the buyer and seller.

Dual Agency

An arrangement where one agent or brokerage represents both the buyer and seller in the same transaction.

Fiduciary Duty

The legal obligation of loyalty, care, and honesty an agent owes to their principal in a trust relationship.

General Agent

An agent authorized to handle a range of matters within a specific area of the principal's business.

Procuring Cause

The broker whose uninterrupted efforts led to the successful completion of a real estate transaction, relevant to commission disputes.

Puffing

An agent's exaggerated, subjective opinion about a property's features that is not considered fraudulent misrepresentation.

Special Agent

An agent authorized to handle one specific transaction or limited task for a principal.

Subagency

An agency relationship where a cooperating broker works on behalf of the listing broker's principal, the seller.

Transaction Broker (Facilitator)

A real estate licensee who assists both parties in a transaction without representing either as a fiduciary.

Universal Agent

An agent given broad authority to handle all of a principal's affairs.

Vicarious Liability

Legal responsibility a broker holds for the actions of their affiliated agents performed within the scope of their work.

Study the concepts behind these terms: Agency study guide