Tennessee Realtor State Practice Exam

To prevent dual agency, Tennessee brokerage firms will most likely?

1. Engage in multiple representation

2. Default to facilitator status

3. Disclose all client information

4. Utilize limited agency agreements

The correct answer is: Default to facilitator status

To prevent dual agency, brokerage firms in Tennessee will most likely default to facilitator status. This approach ensures that the brokerage does not represent both parties in a transaction, which could lead to conflicts of interest and a lack of loyalty to either client. By adopting facilitator status, the brokerage acts as an intermediary who assists in the negotiation process without being an agent for either party, maintaining neutrality and clarity in the transaction. While options like engaging in multiple representation or utilizing limited agency agreements may potentially create dual agency situations, facilitator status removes the possibility of having conflicting obligations to multiple clients. Disclosing all client information could compromise client confidentiality and create ethical issues; thus, it does not effectively prevent dual agency scenarios. In summary, defaulting to facilitator status allows a brokerage to operate without the risks associated with dual agency, thereby safeguarding the interests of both the buyer and the seller.