Alabama Real Estate Practice Exam

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Prepare for the Alabama Real Estate Exam. Utilize flashcards and multiple-choice questions, each coupled with hints and explanations. Ace your upcoming test!

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What is a designated agency arrangement designed to solve?

Prevent the agent from selling the property
Allow the principal to conduct activities
Resolve the conflict of interest in dual agency situations
Prevent the broker from earning a commission

The correct answer is: Resolve the conflict of interest in dual agency situations

A designated agency arrangement is a type of agency relationship where a real estate agent is designated to represent one party (either the buyer or the seller) in a real estate transaction, while their agency's broker represents the other party. This arrangement is designed to resolve the potential conflict of interest that arises in dual agency situations, where the agent is representing both the buyer and seller. This ensures that each party has their own dedicated representation and prevents the agent from acting in the best interest of one party over the other. Options A, B, and D are incorrect because they do not accurately describe the purpose of a designated agency arrangement.