Who is defined as a principal in a real estate agency relationship?

In a real estate agency relationship, a principal refers to the client who authorizes an agent to act on their behalf. This relationship is fundamental as it establishes the legal obligations and responsibilities between the agent and the client. The principal provides consent for the agent to represent their interests in transactions, thereby allowing the agent to perform necessary actions such as negotiating deals and communicating with other parties.

This definition underscores the importance of the principal’s authority in the agency relationship; they are the ones who employ the agent’s services and are often the ones with the most at stake in real estate transactions. The principal's role is central to the functioning of the agency relationship, as it is their objectives that the agent is tasked with achieving.

In contrast, the other options do not define a principal accurately. A brokerage representative is typically an agent or salesperson working under a brokerage but does not embody the role of a principal. A customer without an agency relationship does not have the legal standing of a principal, as they have not authorized an agent to act on their behalf. Lastly, an agent acting on behalf of others identifies the role of the agent rather than the client, making it distinct from the definition of a principal.