Who does a realty firm represent when entering into an agreement to sell homes for a home builder?

When a realty firm enters into an agreement to sell homes for a home builder, they represent the home builder, who is the principal in this relationship. The realty firm acts on behalf of the home builder to market and sell the properties, effectively promoting the builder's interests in the transaction. The contract between the realty firm and the home builder establishes this agency relationship, whereby the firm is responsible for tasks such as showcasing the homes, negotiating with potential buyers, and handling sales processes to achieve the builder's objectives.

The agency relationship is fundamental in real estate because it clarifies responsibilities and expectations, ensuring that the firm focuses on maximizing sales for the builder while adhering to legal and ethical standards in the promotion and representation of the homes. This is why the home builder is the correct choice, as they are the party that the realty firm is legally obligated to represent in this context.