Short definition
Designated agency in real estate occurs when two agents who work for the same brokerage each represent a different party in the same transaction—one agent exclusively represents the buyer and another exclusively represents the seller—while the brokerage itself technically represents both sides. This lets each client have a dedicated advocate inside the same firm instead of a single agent representing both parties (dual agency).
How designated agency works
- When you list with Agent A at Brokerage X and a buyer working with Agent B from Brokerage X wants the property, the brokerage designates Agent A to represent the seller and Agent B to represent the buyer exclusively.
- Each designated agent owes fiduciary duties to their own client; they negotiate and advise on that client’s behalf while the supervising broker remains neutral and does not directly represent either party (brokerage oversight).
- This setup is common in larger brokerages where multiple agents operate under the same firm, increasing the chances both sides will be “in-house.”
- Designated agency keeps representation personalized while allowing the transaction to stay within one company.
Real-world examples
- In many urban markets dominated by a few large firms, a buyer’s agent and a seller’s agent can belong to the same company. The brokerage assigns the two as designated agents so each client keeps exclusive advocacy.
- In rural areas with few brokerages available, designated agency lets both buyer and seller get individual representation without leaving the local firm.
- If a homebuyer calls a listing office and is referred to a different agent in that same office to represent them, the office has effectively created a designated agency relationship.
- Some brokerages formalize the arrangement with internal policies and written disclosures that explain the designated agency roles to avoid confusion and reduce conflict risk.
Advantages
- Clients receive full, personalized representation from an agent committed only to their interests—stronger than a single agent attempting to represent both sides.
- Clearer boundaries than dual agency, where one agent’s divided loyalties can create ethical challenges.
- Convenient for transactions that occur “in-house,” saving time and simplifying coordination when both parties already work with the same firm.
Considerations and potential downsides
- The brokerage still collects commissions from both sides, which can create perceived or real conflicts of interest at the firm level.
- There is a risk—albeit managed by policies and professional standards—of improper information sharing or collusion between agents under the same broker.
- Legal treatment varies by state: some states limit or prohibit designated agency, and where allowed, brokers must provide disclosures and obtain client consent. Always confirm local rules and request written disclosure of the relationship.
Designated agency vs. other agency types
Designated agency is a middle ground between traditional separate-firm representation and dual agency. Unlike dual agency—where one agent represents both buyer and seller—designated agency gives each party a separate agent within the same firm, preserving individual fiduciary duties (fiduciary responsibilities).
Quick checklist for clients
- Ask for written disclosure explaining who represents you and who represents the other party.
- Confirm that the designated agent will owe you full fiduciary duties.
- Check state rules about designated agency and required consents.
- Ask the brokerage about internal safeguards to prevent improper information sharing.
Bottom line: Designated agency means two different agents from the same brokerage each represent a different party in a transaction, giving both buyer and seller dedicated advocacy while keeping the deal inside one firm. It offers clearer, individualized representation than dual agency but requires transparency, client consent, and firm safeguards to prevent conflicts.
