Washington State Real Estate Practice Exam 2026 - Free Real Estate Practice Questions and Study Guide

The term that describes the legal authority granted by a property owner to a broker to sell their property is referred to as "agency." In real estate, agency defines the relationship where one party, the principal (the property owner), grants another party, the agent (the broker), the authority to act on their behalf in specific matters, including the sale of property.

Agency establishes a fiduciary relationship, which emphasizes trust and confidence. This relationship obligates the broker to act in the best interests of the property owner, including duties such as loyalty, disclosure, confidentiality, obedience, reasonable care, and accounting. By designating the broker as their agent, the property owner is empowering the broker with the legal authority to represent them in the transaction.

The other terms do not accurately encompass this specific legal relationship: representation pertains more generally to the act of serving or supporting someone in a transaction; authority is a broader term that can refer to various powers granted in different contexts; and brokerage refers to the firm or business that engages in the sale or leasing of properties but does not specifically denote the legal relationship of authority given by the property owner to the broker.