In agency practice, which party is the one who authorizes the agent to represent her in a real estate transaction?

In agency practice, which party is the one who authorizes the agent to represent her in a real estate transaction?

• A. Customer
• B. Broker
• C. Client
• D. Principal

Answer: (D)

The main idea here is who gives authority for representation in a real estate deal. In agency practice, the person who hires or appoints the licensee to act on her behalf is the principal. The agent then represents the principal in the transaction, taking on fiduciary duties and working to advance the principal’s interests. The client terminology is related, but the authority to represent comes from the principal—the party who authorizes the agent to act. The broker oversees the brokerage relationship, and the customer is the party not represented by the licensee. So, the one who authorizes the agent to represent her is the principal.

The main idea here is who gives authority for representation in a real estate deal. In agency practice, the person who hires or appoints the licensee to act on her behalf is the principal. The agent then represents the principal in the transaction, taking on fiduciary duties and working to advance the principal’s interests. The client terminology is related, but the authority to represent comes from the principal—the party who authorizes the agent to act. The broker oversees the brokerage relationship, and the customer is the party not represented by the licensee. So, the one who authorizes the agent to represent her is the principal.