What type of relationship is governed by the brokerage’s choice in agency models?

In real estate, the type of relationship established by the brokerage's choice in agency models is significant for clarifying the roles and responsibilities of the agent towards the clients involved. Designated agency occurs when a brokerage assigns one agent to represent the buyer and another to represent the seller in the same transaction, thus creating a level of specialization while still operating under the same brokerage.

This model allows the brokerage to maintain its fiduciary responsibility to both parties while providing tailored services through designated agents. Each agent can advocate for their respective client, ensuring that their interests are represented separately. This setup contrasts with other agency models, such as single agency, where an agent exclusively represents either the buyer or seller, or dual agency, where one agent represents both parties, potentially leading to conflicts of interest.

By choosing designated agency, brokerages facilitate a structure in which they can manage client relationships effectively, ensuring compliance with legal requirements and ethical standards in real estate transactions. Such a choice highlights the importance of clarity in representation and enables better outcomes for the clients involved.