What is a key characteristic of an agency relationship?

A key characteristic of an agency relationship is that the agent acts on behalf of the client. This means that the agent is empowered to make decisions and take actions that are intended to benefit the client, who is often referred to as the principal. In this relationship, the agent has a fiduciary duty to act in the best interests of the client, which establishes a bond of trust and responsibility.

This principle underscores the trust placed in the agent by the client and emphasizes the agent's role as a representative who is tasked with carrying out specific responsibilities, such as negotiating and making decisions related to real estate transactions. The actions taken by the agent should align with the client's goals and directives, ensuring that the client's needs and best interests are prioritized.

Moreover, the agency relationship is built on legal obligations that require the agent to act competently, loyally, and in good faith toward the client, thereby reinforcing why this option accurately captures a core aspect of agency relationships.