In real estate, what does the term "agency" refer to?

The term "agency" in real estate specifically refers to the relationship between a real estate agent and their client. This relationship is built on trust, where the agent acts on behalf of the client in transactions related to buying, selling, or leasing property. The agent is expected to represent the best interests of the client, which can involve negotiating terms, providing information on market conditions, and ensuring that all relevant legal obligations are met.

Understanding this relationship is fundamental in real estate practices, as it establishes the duties and responsibilities of the agent, which may include fiduciary responsibilities such as loyalty, confidentiality, and full disclosure. The concept of agency is critical for maintaining professionalism and integrity within real estate transactions, making it a key component of the industry’s legal framework.

In contrast, other options focus on different aspects of real estate transactions that do not capture the essence of "agency." Property ownership pertains to how property rights are held, the commission structure relates to how agents are compensated, and the listing period addresses the timeline for selling a property. None of these options elucidate the nature of the professional relationship that defines agency in the context of real estate.