Tennessee Realtor State Practice Exam

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In real estate, what is the purpose of a buyer representation agreement?

To confirm open house attendance
To establish exclusive rights for the agent
To document client referrals
To specify rental terms

The correct answer is: To establish exclusive rights for the agent

A buyer representation agreement serves as a formal contract between the buyer and the real estate agent, establishing the agent's authority to represent the buyer in purchasing property. This agreement typically creates an exclusive relationship, which means that the buyer agrees to work only with that particular agent for a specified period. This helps ensure that the agent is fully dedicated to the buyer’s interests and efforts in finding a suitable property. Furthermore, by outlining the exclusive rights of the agent, the agreement also sets expectations regarding the agent’s duties, potential compensation, and the scope of services to be provided. Such clarity is beneficial in establishing a professional relationship and helps mitigate misunderstandings that could arise during the property buying process. Other options, while relevant in the scope of real estate, do not capture the primary function of a buyer representation agreement, which is centered around exclusive representation.