Final answer:
The party in a real estate transaction who will employ an agent prior to signing a listing agreement is known as a client. This individual or entity seeks the services of a real estate agent to perform tasks such as marketing and selling property.
Step-by-step explanation:
Prior to signing a listing agreement, a party in a real estate transaction who will employ an agent is known as a client. The relationship between a real estate agent and a client is a fiduciary one, meaning that the agent owes the client duties of trust, loyalty, and confidentiality. The agent will act on behalf of the client to sell or buy property, negotiate prices, and complete the transaction process. Before any commitments are made through a listing agreement, the individual or entity that plans to hire the real estate agent for their services is not yet a partner, associate, or independent contractor in the transaction; they are simply a prospective client seeking professional assistance.
A listing agreement is a contract between a property owner and a real estate brokerage that authorizes the broker to represent the seller and their property. An agent affiliated with the brokerage will then work on behalf of the seller to market and sell the property, for which services the agent will receive a commission upon the successful sale of the property.
It is essential that the parties involved understand their roles before entering into such agreements to ensure clarity and to establish the proper legal and professional framework for their relationship.