What does Designated Agency require from the parties involved?

Designated Agency requires informed consent from all parties involved. This concept arises in real estate relationships where a brokerage represents both the buyer and the seller in a transaction through different agents within the same firm. For a designated agency to be valid, the parties must understand the implications of such an arrangement, particularly concerning confidentiality, loyalty, and representation duties.

Informed consent is essential because it ensures that both the buyer and seller are aware of the firm's dual roles and can make a knowledgeable decision about proceeding under these circumstances. This consent often involves a discussion of how potential conflicts of interest will be handled and what each party can expect in terms of representation and advocacy throughout the transaction process.

The other options do not capture the full requirement of the designated agency model. For instance, limited information sharing might occur in designated agency, but it doesn't encapsulate the essence of the arrangement, which prioritizes clear communication and understanding of roles. An automatic commission split is not a requirement of designated agency; commission terms can vary depending on the agreement between the brokerage and the agents involved. Similarly, mandatory dual representation does not accurately reflect the nature of designated agency, which allows for distinct representation while still collaborating within the same brokerage.