Who can refer to their customers as "principals" in a real estate transaction?

In a real estate transaction, the term "principal" is typically used to refer to the main parties involved in the deal, such as the buyer and the seller. Single agents represent only one party in a transaction, either the buyer or the seller, and they owe that party a fiduciary duty, which includes responsibilities such as loyalty, confidentiality, and full disclosure.

Since single agents act on behalf of their respective clients, they can appropriately refer to their customers as "principals." This terminology emphasizes their direct role in representing the client's interests throughout the transaction process.

Transaction brokers, conversely, do not represent either party exclusively but rather facilitate the transaction without a fiduciary relationship. In such cases, referring to customers as "principals" may not convey the same level of representation or responsibility as it does for single agents. Therefore, it is the single agents who have the authority to use the term "principals" in the context of representing their customers directly in the real estate transaction.