What does "agency" refer to in real estate?

In real estate, "agency" refers to the legal relationship that exists between an agent and their client. This relationship is foundational to the real estate industry and is established through a mutual agreement where the agent is authorized to act on behalf of the client, typically to buy, sell, or lease property. The agent has a fiduciary duty to act in the best interests of the client, including responsibilities like loyalty, disclosure, and confidentiality.

Understanding agency relationships is crucial for real estate professionals, as the nature of these relationships determines how agents interact with their clients and what obligations they have. It influences the legal and ethical standards governing how agents conduct their business, ensuring that clients are represented appropriately and that their interests are prioritized throughout any transaction.

The other options relate to different aspects of real estate. A type of mortgage agreement pertains to financing, a classification of property ownership involves legal titles and property rights, and regulations governing real estate transactions address the broader legal framework within which real estate operates. However, these do not capture the essence of the agent-client dynamic encapsulated by the concept of "agency."