What is the exam-ready answer?
| Official syllabus topic | Creation and Types of Agency |
|---|---|
| Official PSI area | Agency |
| Published area weight | 13% of the 100-question national portion |
| Exam portion | National salesperson portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
The Rule
PSI publishes the weight for the complete content area, not a fixed question count for this lesson. Learn the rule well enough to apply it when PSI changes names, numbers, or parties in a new scenario.
The lesson
These ideas work together. On the exam, the wrong answers usually describe a nearby concept, so learn where each one stops.
Creation
Express agency is stated orally or in writing, though brokerage representation agreements may require writing. Implied agency can arise from conduct, ratification from later approval, and estoppel from representations reasonably relied upon.
Scope of authority
A special agent handles a limited transaction or act. A general agent manages a series of matters, such as property management. Universal authority is exceptionally broad and typically created by a power of attorney.
Parties represented
A listing brokerage represents a seller or landlord, while a buyer- or tenant-broker agreement creates representation on the other side. Cooperating with another brokerage does not by itself decide agency.
Multiple-party structures
Dual agency represents both sides with informed consent and limited advocacy. Designated agency assigns different affiliated licensees where permitted. Subagency creates duties to another broker's principal.
Decision rule
Georgia-specific distinction
Worked example
Scenario. A broker has a written listing agreement authorizing marketing and negotiation for one property.
Reason it through. The seller is the principal, and the broker's authority is limited to the transaction and the agreement's terms.
Answer. The broker is a special agent representing the seller.
Common exam traps
- Assuming MLS cooperation creates subagency
- Treating a customer as a client
- Assuming one firm always means dual agency
- Creating implied representation through careless advice
Original practice questions with detailed explanations
These questions were written for instruction and mapped to the current outline. They are not copied from PSI or any live examination. Choose an answer before opening the explanation.
Question 1A property manager has a written agreement to lease units, collect rent, and hire repair vendors for an owner's apartment complex on an ongoing basis. What type of agent is the property manager?
- A. General agent
- B. Special agent
- C. Universal agent
- D. Subagent
Show answer and explanation →
Answer: A. General agent
A general agent handles a series of matters in one area for the principal, and ongoing property management is the classic example. Special agent is the wrong answer because a listing broker is one, but a special agent's authority is limited to a single transaction or act.
Question 2Without any authority, a licensee signs a one-year lease extension on an owner's behalf. The owner later learns of it and keeps accepting the tenant's rent under the new terms. How did agency arise for that act?
- A. Express agreement
- B. Estoppel
- C. Ratification
- D. Subagency
Show answer and explanation →
Answer: C. Ratification
Ratification happens when a principal knowingly approves an act after the fact, and accepting rent under the new terms is that approval. Estoppel is the wrong choice, but it rests on a third party relying on the principal's earlier representations, not on the principal's own later approval.
Question 3Two licensees at the same Georgia brokerage are involved in one sale. One listed the home, and the other showed it to a buyer who has signed no agreement with the firm. On these facts, what is the buyer's status with the firm?
- A. The buyer is a client of a dual agent
- B. The buyer is a customer, not a client
- C. The buyer is a designated agency client
- D. The buyer is represented by a subagent
Show answer and explanation →
Answer: B. The buyer is a customer, not a client
Representation comes from a brokerage engagement, and this buyer has none, so the buyer is a customer. Dual agency is the common mistake: one firm on both sides does not create it, because Georgia dual agency needs a client relationship with both parties and their written consent.
Ready to move on?
You are ready for the next lesson when all of these are true.
- Explain Creation and Types of Agency in one clear answer without notes.
- Separate Creation from Scope of authority using a fresh example.
- Apply the decision rule to a new fact pattern and name the fact that controls the result.
- State the Georgia-specific point or explain why the national rule applies unchanged.
- Answer every practice question and explain the rule each rejected option misapplies.
- Revisit this topic later in mixed practice without category labels.
Recommended next lesson
Continue with Brokerage Representation Agreements. Agency usually starts with a written agreement, so the next lesson walks through exclusive-right-to-sell, exclusive-agency, open and buyer agreements, and what each one says about when a fee is earned.
Return to the Agency hub to see every official branch and the complete lesson sequence for this content area.