Tennessee Realtor State Practice Exam

In what situation would a real estate broker be a dual agent?

1. If representing both buyer and seller in one transaction

2. If working with different clients in different transactions

3. If representing only one party involved

4. If agent duties are delegated to another agent

The correct answer is: If representing both buyer and seller in one transaction

A real estate broker qualifies as a dual agent when they represent both the buyer and seller in a single transaction. This situation arises when the broker has a mutual agreement with both parties to facilitate the transaction but must balance the interests of each client without favoring one over the other. In many states, including Tennessee, dual agency requires full disclosure and consent from both parties, as it can create potential conflicts of interest. The other options illustrate scenarios that do not meet the criteria for dual agency. Representing different clients in distinct transactions does not imply that the broker is acting for both parties in one deal, which is necessary for dual agency. Representing only one party eliminates the necessity for a dual agency relationship, as it involves the broker solely advocating for that client's interests. When duties are delegated to another agent, this describes a situation of agency-sharing or sub-agency, not dual agency, unless the same broker is still overseeing the overall representation of both parties in question.