In agency relationships in real estate, who is the party that authorizes the agent to represent her in a real estate transaction?

In agency relationships in real estate, who is the party that authorizes the agent to represent her in a real estate transaction?

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

Answer: (B)

The main idea here is who grants authority. The party who authorizes the agent to act on her behalf in a real estate transaction is the principal. This person hires the broker and gives them the authority to represent her, creating the fiduciary relationship the agent owes to the principal. In practice, that principal is the client who is being represented; a customer, by contrast, is someone the broker may assist but without that representation. The broker is the agent carrying out duties for the principal, not the one who authorizes the representation.

The main idea here is who grants authority. The party who authorizes the agent to act on her behalf in a real estate transaction is the principal. This person hires the broker and gives them the authority to represent her, creating the fiduciary relationship the agent owes to the principal. In practice, that principal is the client who is being represented; a customer, by contrast, is someone the broker may assist but without that representation. The broker is the agent carrying out duties for the principal, not the one who authorizes the representation.