Tennessee Realtor State Practice Exam

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What does having a designated agent in a brokerage help to avoid?

External partnerships
Misrepresentation cases
In-house dual agency
Conflict of interest

The correct answer is: In-house dual agency

Having a designated agent in a brokerage primarily helps to avoid in-house dual agency. In-house dual agency occurs when a single brokerage represents both the buyer and the seller in a real estate transaction. This situation can lead to conflicts of interest since the agent must negotiate on behalf of both parties, which can compromise their ability to advocate effectively for one side over the other. By having a designated agent, the brokerage assigns a specific agent to represent only one party in the transaction. This separation ensures that both the buyer and seller receive dedicated representation, minimizing the risk of conflicting interests and the complications that arise from dual agency scenarios. Each party can expect confidentiality, loyalty, and full advocacy from their respective agents, leading to a more transparent and ethically sound transaction process.