Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What is the primary requirement for establishing an agency relationship between two parties?

1. Agreement

2. Consent

3. Communication

4. Trust

The correct answer is: Consent

The primary requirement for establishing an agency relationship between two parties is consent. This is because an agency relationship is defined as one in which one party (the agent) acts on behalf of another party (the principal) in dealings with third parties. For this relationship to be valid, both parties must agree to the terms under which the agent will represent the principal. This consent can be expressed either verbally or in writing, and it signifies the principal’s willingness to allow the agent to act on their behalf. While agreement, communication, and trust are important components of a successful agency relationship, they do not alone establish the relationship. Agreement refers to the mutual understanding of the terms of the agency, but it is the consent that officially creates the agency itself. Communication is vital for the agent to understand the principal’s wishes and effectively convey information, and trust is essential to maintain a healthy working relationship. However, without the foundational element of consent, an agency relationship cannot exist.