What establishes an agency relationship between a property owner and a firm?

An agency relationship between a property owner and a firm is established primarily through the brokerage firm that the owner engages for real estate services. This relationship is formalized when the owner signs a listing agreement with the brokerage firm, giving it the authority to represent the owner in transactional matters related to the sale or lease of the property.

The brokerage firm holds a legal responsibility to act in the best interests of the property owner, which includes duties such as marketing the property, negotiating on behalf of the owner, and ensuring compliance with applicable laws and regulations. The firm acts as a conduit between the owner and potential buyers or lessees, representing the owner’s interests throughout the real estate transaction process.

In contrast, while a broker and a listing agent are involved in facilitating the agency relationship, they operate within the framework established by the brokerage firm. The broker may represent the firm, and the listing agent may be the individual responsible for specific tasks; however, the foundational relationship exists at the brokerage level with the property owner. This is why the brokerage firm is the correct choice for establishing the agency relationship in this context.