Fiduciary Duties

Buyer’s Brokers owe their clients Fiduciary Duties.  According to real estate law, Clients are entitled to fiduciary duties.  Customers are not.  What are fiduciary duties and what do they mean?

The most important fiduciary duty is LOYALTY, which means that the client’s interests take priority over anyone else’s, including the agent’s.  It means advocating for the client at all times.  It means allegiance to the client.

CONFIDENTIALITY means protecting the client’s interests.  The agent must hold in complete confidence anything told to him or learned by him about the client’s interests in the transaction.

The duty of DISCLOSURE to the client goes beyond the disclosure of material facts.  The agent only needs to disclose what he knows, however this fiduciary duty means going the extra mile to discover information that would assist the buyer in making a decision to purchase or not to purchase a subject property.

When an agent represents a client, the agent must obey the client and carry out any and all legal instructions given to him.  This is the duty of OBEDIENCE.

An agent is also required to protect their client from risk and harm.  This is accomplished by exercising REASONABLE CARE.  The agent might give the client opinions and advice based upon experience.  However, the agent must also recognize when they should recommend the client seek out specific experts.

ACCOUNTING is transparency.  The client has the right to know where their money is going and what they are receiving in return for it.

If you want to be a Client and be represented by a Buyer’s Broker, you must enter into a written contract with the Buyer’s Broker.  Without that Buyer Representation contract you will only be a customer.  Customers are treated with respect and honesty.  They have the right to know about material facts regarding a property of interest, however the agent is not obligated to discover and disclose other helpful information.  An agent will give a customer assistance but not advice.  And while a customer is entitled to a competent agent, the agent is not required to put the customer’s interests first or to advocate to the benefit of the customer.

Pretty obvious, isn't it?  Be a Client, not just a customer.

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