In agency terms, the principal is the

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Study for the Burk Baker National Test. Use flashcards and multiple choice questions with hints and explanations to prepare effectively. Get ready for your exam!

Multiple Choice

In agency terms, the principal is the

Explanation:
The key idea is who controls the relationship by giving the agent permission to act. The principal is the person who authorizes the agent to act on their behalf, creating the agency relationship. That authorization places duties on the agent to follow the principal’s instructions, act loyally, and look out for the principal’s best interests. In real estate, the principal can be the seller or the buyer—the person who hires the agent to represent them. The broker is the intermediary facilitating the transaction, not the principal simply by virtue of being the broker. The general public doesn’t grant representation to the agent, so they aren’t the principal.

The key idea is who controls the relationship by giving the agent permission to act. The principal is the person who authorizes the agent to act on their behalf, creating the agency relationship. That authorization places duties on the agent to follow the principal’s instructions, act loyally, and look out for the principal’s best interests. In real estate, the principal can be the seller or the buyer—the person who hires the agent to represent them. The broker is the intermediary facilitating the transaction, not the principal simply by virtue of being the broker. The general public doesn’t grant representation to the agent, so they aren’t the principal.

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