a. The decision is delegated because the real estate agent has superior local knowledge about what is available on the market. If the person is looking for housing in a new city, the real estate agent also has better local knowledge about neighborhoods and other factors. This information is costly for the new person to obtain.
b. The person looking for housing is the principal. The real estate agent is, appropriately enough, the agent.
c. The agent might be paid a commission based on the rental rate or sales price, so he or she has an incentive to show the most expensive housing he or she thinks the individual can afford. Of course, this incentive is offset somewhat by the agent’s desire for repeat business.