Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

In a real estate transaction, who is typically considered the third party?

1. The agent representing the buyer.

2. The principal involved in the negotiation.

3. The customer engaged in the negotiation.

4. The legal representative of the seller.

The correct answer is: The customer engaged in the negotiation.

In the context of a real estate transaction, the role of a third party is generally attributed to an individual who is not directly involved in the primary negotiations but plays a key role in the overall transaction process. The customer engaged in the negotiation is considered a third party because they are not the primary buyer or seller but are often involved indirectly, such as being a potential buyer exploring options. This is particularly relevant in scenarios where a customer may be receiving assistance from agents but is not the one procuring the transaction directly, thus qualifying them as a third party. While the agent representing the buyer is actively engaged in facilitating the transaction on behalf of the buyer, and the legal representative of the seller is focused on the seller's interests, these individuals are participants rather than third parties. The principal involved in the negotiation, referring to the buyer or seller directly engaged in the transaction, is also not a third party as they are central to the negotiations. Therefore, the definition aligns with the customer being labeled as the third party in this context.