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

In real estate, "agency" specifically refers to a legal relationship between a brokerage and a client. This relationship is foundational to real estate transactions, as it establishes the responsibilities and duties that the broker or agent has towards their client, which can include fiduciary duties like loyalty, disclosure, and confidentiality.

This legal relationship is crucial because it defines how the agent will represent the client’s interests in transactions, such as buying or selling properties. Agency can arise through various agreements, such as listing agreements, buyer representation agreements, or property management agreements. Understanding this relationship is vital for both real estate professionals and clients since it dictates the behaviors and ethical obligations expected from agents in their dealings with clients.

The other options do not accurately define "agency" within the context of real estate. For example, while agency may involve a brokerage working with multiple clients, that is not the essence of agency itself. Likewise, a transaction between a buyer and a seller, or a marketing strategy to promote properties, are separate concepts that do not encapsulate the legal and fiduciary implications of the agency relationship.