In a real estate transaction, who does a broker always represent?

In a real estate transaction, a broker always represents the principal, which consists of the buyer and/or the seller. The principal is the person or entity that engages the broker to act on their behalf, typically through a contractual agreement. This relationship is formalized in a listing agreement for sellers or a buyer's representation agreement for buyers.

When acting as the agent for the principal, the broker has a fiduciary duty to protect the interests of their client, including loyalty, disclosure, confidentiality, and accounting. This means the broker must prioritize the principal's interests in the transaction over all others.

Other parties in the choices, such as the bank, government, or tenant, do not have the same representational relationship with the broker unless there is a specific agreement in place that indicates otherwise. For example, a broker might help a tenant find a rental property, but unless the tenant engages the broker as their representative, the broker is not bound to represent the tenant’s best interests.