In the context of real estate, who is referred to as the "principal"?

In real estate terminology, the term "principal" refers specifically to the buyer, seller, or borrower involved in a transaction. This designation highlights the individuals or entities who have a vested interest in the property and are engaged in the actual buying, selling, or financing activities.

The principal is the party that the agent represents in the transaction, whether it be the individual selling their home, the prospective buyer looking to purchase, or a borrower seeking a loan for a property. By focusing on the roles that these parties play, we can better understand the structure of real estate transactions, which hinge upon their interests and decisions.

The role of the agent, while vital, pertains more to the representation of the principal in the transaction and does not classify them as the principal themselves. Similarly, property managers and financial institutions are essential players in real estate but serve different functions that do not encompass the principal role in a transaction context. Therefore, the correct identification of the principal as the party involved in the buying, selling, or borrowing process is crucial for understanding the dynamics of real estate transactions.