A licensee has an agency relationship and is representing whom?

The correct answer highlights the concept of agency relationships in real estate, which is fundamental to understanding the responsibilities of a licensee. When a licensee has an agency relationship, they are representing the individual with whom they are working directly, whether that person is a buyer or a seller. This means the licensee owes specific duties to that individual, such as loyalty, confidentiality, and full disclosure.

In the context of real estate, having an agency relationship is often formalized through agreements, but it primarily hinges on the nature of the working relationship. The individual that a licensee is assisting and guiding through the transaction is typically the one they are legally and ethically bound to represent, highlighting the importance of clear communication and understanding of roles in real estate practice.

The other options don't accurately capture the essence of agency relationships. For example, simply having signed agreements, while important, does not encompass all the scenarios in which a licensee may represent a client. Additionally, representing only sellers with signed listing agreements or treating individuals as customers misconstrues the professional obligations a licensee has when an agency relationship is established. Therefore, the emphasis on the active working relationship further clarifies the licensee's role and responsibilities.