1. One of the main parties to a transaction. For example the buyer and seller are principals in the purchase of real property.
2. In a fiduciary relationship, the person who hires a real estate broker to represent him or her in the sale of property. The phrase "principals only", often found in real estate ads, is meant to exclude real estate agents from contacting the owners of the property.
3. The capital sum. Interest is paid on the principal. An amortized payment includes interest and principal.