In real estate transactions, who is the principal?

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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 real estate transactions, who is the principal?

Explanation:
In real estate, the principal is the party who hires the broker to represent them in the transaction. That person is the client. The broker (and the agent who works for the broker) owes fiduciary duties to the client, such as loyalty and confidentiality. The customer is someone the licensee may assist, but without representation, so they aren’t the principal. The broker is the firm that facilitates the deal, not the party who authorizes representation. The principal can be either the buyer or the seller, depending on who engaged the broker.

In real estate, the principal is the party who hires the broker to represent them in the transaction. That person is the client. The broker (and the agent who works for the broker) owes fiduciary duties to the client, such as loyalty and confidentiality. The customer is someone the licensee may assist, but without representation, so they aren’t the principal. The broker is the firm that facilitates the deal, not the party who authorizes representation. The principal can be either the buyer or the seller, depending on who engaged the broker.

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