National Real Estate Practice Exam

What is the definition of a customer in real estate?

1. A licensee with supervisory responsibility

2. A person who has an agency agreement

3. A third party with whom a licensee works

4. A buyer in a transaction

The correct answer is: A third party with whom a licensee works

In the context of real estate, a customer refers to a third party with whom a licensee works. This definition highlights that a customer is someone who may not have an agency agreement with the licensee but is involved in the transaction process. For example, if a real estate agent is assisting a buyer, the buyer is the client or principal. However, if there are other parties involved, such as sellers or other potential buyers who are receiving information and assistance from the agent but do not have a formal agency relationship, they would be considered customers. This distinction is important because it clarifies the nature of the relationship between the licensee and the individuals they interact with during real estate transactions. Understanding this concept helps in recognizing the different roles and obligations that licensees have, such as fiduciary duties to clients and the level of service they can provide to customers.