Below you will find a list of fiduciary duties. These are the 6 things that your real estate agent owes you when you fill out an agency agreement with them that makes you their client and guarantees them their paycheck. These are the things an agent gets paid for so go ahead…hold them accountable!
6 Fiduciary Duties of A Real Estate Agent:
1. Obedience:
Your Real Estate Agent is obligated to follow your instructions so long as they are not illegal and are in accordance with the contract.2. Loyalty:
Your Agent is duty bound to work in your best interests ahead of those of any other party in the transaction, including their own. How much commission they might make, particularly in competing offer situations, should not be a consideration and would be disloyal.3. Disclosure:
In many states the law requires a real estate agent, whether in an “agency” capacity or not, to disclose material facts about a property to their client. Material facts are those that might cause you to change your decision regarding purchasing a home. Beyond that, the fiduciary duty of disclosure would include just about any knowledge the agent had that might benefit their client in the process. In Maine we have ‘The Residential Property Transaction Booklet’ which clearly states the responsibility of the buyer and the agent when it comes to information and how it is acquired. It also list links to agencies for the buyer to help them obtain necessary information about the home that falls outside of the scope of the agent. Your agent should be presenting this to you at the time you sign the agency agreements making them your agent.4. Confidentiality:
Your agent owes you complete confidentiality. This means that they do not disclose anything that they learn about you, your financial or personal affairs or motivations. This duty survives closing and lasts forever. Only a court instruction to disclose can relieve them of this duty. This also goes for giving your name to unqualified 3rd parties without your permission (a 3rd party would be someone not directly related to your real estate transaction).5. Accounting:
Accounting for all documents and funds in the transaction is a fiduciary duty. Accurate reporting of the whereabouts of all monies pertaining to the transaction and their ultimate disposition is a fiduciary responsibility.6. Reasonable Care:
This duty is one to be very careful of. The words “reasonable care” are only finally fully defined in many cases by a judge or jury after the deal has already closed. Your agent, as a licensed real estate professional, is expected to have a certain level of knowledge and ability to advise and guide you through the process without harm. Your agent should be able to advise you on price, inspections, negotiations, repairs and many other facets of the transaction. If it’s not something they’re expected to know, they should be able to advise you in how to get the information.With that said, I highly discourage ANY buyer from working with the listing agent of a property they’re interested in.
DO NOT agree for your agent to participate in dual disclosed agency… YOUR INTERESTS ARE NOT BEING REPRESENTED! Do Allow the listing agent to refer you to someone else.
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[…] 6 Fiduciary Duties of A Real Estate Agent by Mindy Allen at Maine Homes […]
Mindy,
Nice, informative post. The real estate industry has to do a better job of disclosing the EVILS of dual agency to the consumer (both Buyers & Sellers). If you are a potential home buyer, it is good info. to stay away from a disclosed dual agency transaction. But, the BEST protection for any home buyer is an Exclusive (True) Buyer Agent. An EBA can provide a better due dilligence of the fiiduciary duties to a potential home buyer than just a traditional real estate agent acting as a buyers agent. HomeBuyer Advocate Mike
http://www.homebuyersadvocate.wordpress.com