In a real estate transaction, who are considered the principals?

Study for the Arizona Salesperson Test with flashcards and multiple-choice questions. Each question is paired with helpful hints and detailed explanations. Get ready to ace your exam!

In the context of a real estate transaction, the term "principals" specifically refers to the main parties engaged in the agreement, which are the buyer(s) and seller(s). They are the individuals or entities who have a direct interest in the transaction and are legally responsible for fulfilling the terms of the contract.

While agents play a pivotal role in facilitating the transaction by representing the interests of their clients, they do not become principals themselves. Rather, they act as intermediaries between the buyer and the seller. The agents' purpose is to negotiate, advise, and ensure that all procedural requirements are met, but the actual legal rights and obligations rest with the principals.

In the case of lease agreements, while buyers and renters are involved, the definition of principals in most real estate transactions typically centers around buyers and sellers as it pertains to the sale and ownership transfer of property. Thus, the correct understanding of principals focuses on those intimately tied to the contract's execution—the buyer(s) and seller(s)—which is why this choice is accurate in identifying who the principals are.

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