Tennessee Realtor State Practice Exam

If a buyer has not signed a representation agreement, who does the sales agent represent?

1. The buyer

2. Both buyer and seller

3. The seller

4. The brokerage

The correct answer is: The seller

In real estate practices, if a buyer has not signed a representation agreement, the sales agent typically represents the seller's interests. This relationship occurs because the sales agent usually works under a listing agreement with the seller, which establishes the agent's duty to advocate for the seller's goals during negotiations and transactions. In these situations, the sales agent is bound by fiduciary responsibilities to the seller, which include loyalty, confidentiality, disclosure, and accounting. The absence of a signed representation agreement from the buyer indicates that they do not have an established attorney-client or agent-client relationship with the sales agent. Consequently, the sales agent's loyalties and legal obligations default to the seller. This is important for buyers to understand, as it emphasizes the necessity of securing their own representation early in the process to ensure their interests are properly advocated for in real estate transactions.