In a buyer-broker relationship, which statement is true?

• A. The seller is the principal of the broker.
• B. The buyer is the principal of the broker.
• C. The broker is the principal of the buyer.
• D. The buyer has no fiduciary relationship with the broker.

Answer: (B)

In a buyer-broker relationship, the buyer is the principal of the broker because the buyer hires the broker to act on the buyer’s behalf in finding and negotiating a property. This creates a fiduciary relationship where the broker owes duties—loyalty, confidentiality, disclosure, obedience, care, and accounting—to the buyer. The broker represents the buyer, not the seller, in this setup.

The seller is typically the principal of the listing broker, not the buyer’s broker, so that dynamic isn’t the same in a buyer representation. The broker is not the principal of the buyer; the broker is the buyer’s agent. And yes, the buyer does have fiduciary obligations from the broker in this arrangement, which is what underpins the trust and duties in the relationship.