Which term describes the party that hires the broker and benefits from the broker's loyalty in a real estate transaction?

• A. Fiduciary
• B. Principal
• C. Common Law
• D. Administrative law

Answer: (B)

The party that hires the broker and benefits from the broker’s loyalty is the principal. In real estate practice, the broker represents the principal, who authorizes the brokerage agreement and to whom the broker owes fiduciary duties—loyalty, confidentiality, disclosure, and care. The term fiduciary describes the type of relationship and obligations the broker has to the principal, not the party itself. The other options aren’t correct because they refer to legal concepts or branches of law (Common Law, Administrative Law) or simply describe the relationship, not the party who hires and benefits from the broker’s loyalty.