Oregon Real Estate Practice Test 2026 – Complete Exam Prep

In a real estate transaction, the term "principal" specifically refers to the party who grants authority to an agent to act on their behalf. This might include a seller who hires an agent to sell their property or a buyer who engages an agent to help them find and purchase a property. The principal is the individual or entity who has a direct interest in the transaction and empowers the agent, who acts in a fiduciary capacity to represent their interests.

Understanding this role is critical because the relationship between the principal and the agent establishes the foundation for the duties, responsibilities, and legal obligations within the transaction. Agents owe their principals duties of loyalty, disclosure, and accounting, among others, which are essential for maintaining trust and ensuring that the principal's interests are prioritized throughout the transaction process.