What does agency describe in a real estate context?

Agency in a real estate context primarily refers to the relationship between the real estate professional, often called the agent or broker, and the person being represented, known as the client or principal. This relationship is foundational to real estate practice as it establishes the legal and ethical responsibilities the agent has towards the client.

When an agency is established, it typically involves fiduciary duties, which include loyalty, disclosure, confidentiality, obedience, accountability, and reasonable care. This framework ensures that the agent acts in the best interests of the client, providing guidance and representation in real estate transactions. Hence, understanding agency is crucial for real estate professionals, as it dictates how they should interact with clients and fulfill their responsibilities in a transaction.

While the other choices relate to aspects of real estate, they do not capture the essence of agency as explicitly as the correct answer does. The financial relationship between agents and clients, the legal obligations of clients to agents, and the sales process itself are all important elements of real estate but do not specifically define the nature of the agency relationship. By focusing on the relationship between the agent and the client, option B encapsulates the core concept of agency in real estate.