By Sean C. Hamilton
The most coveted relationship in a real estate transaction is undoubtedly that between the real estate broker (agent) and principal (buyer/seller/client). Once established, this relationship authorizes the broker/agent to act on behalf of the principal/client. This agreement creates a fiduciary relationship of trust and confidence between the two parties and means the agent owes the client certain duties. These duties are legally binding in real estate transactions. The law requires the agent to provide the client with the duties of care, confidentiality, loyalty, obedience, disclosure, and accounting. Let’s take a look at each of these duties:
CARE: Agents must exercise a reasonable degree of care while working with clients by using their breath of knowledge and expertise in real estate in a manner that’s in the best interest of the client. The agent should be well versed in the facts of the client’s affairs and the type of financing being used by their client. Agents must also know details of the property being sold or purchased, and be positioned to disclose facts that may affect the final outcome of the transaction.
CONFIDENTIALITY: Agents may not disclose a client’s personal information, financial condition, willingness to accept less or ability to offer more than the listing price, or any other facts that might affect the client’s bargaining power.
LOYALTY: Agents are required to place the client’s interest above those of all others, including those of the agent. The agent must safeguard against any conflicts of interest, and not act in self-interest specific to how much the agent will earn in commission.
OBEDIENCE: Agents are to obey the lawful instructions of the client specific to the agreement. However, the agent shall not obey instructions that are unethical or unlawful.
DISCLOSURE: Agents are required to disclose relevant information or material facts that the agent knows or should know. Agents can be held liable for damages when they fail to disclose such known information.
ACCOUNTING: Agents must be able to account for the status of funds received from or on behalf of the client. Most states require real estate professionals to give accurate copies of all documents to all affected parties and keep copies on file for a specified period. Commingling the client’s money with personal or general business funds is strictly illegal.
The bottom line is the agent has a responsibility to protect the best interest of their client. If you would like more in depth information on what to expect from the fiduciary relationship between agent and client, I’d love to speak with you. Give me a call today and allow me to get you started down the path to home ownership.
Sean C. Hamilton is a REALTOR with Keller Williams Realty Atlanta Partners. He services Metropolitan Atlanta and the state of Georgia; and can assist with your real estate questions or needs no matter where you are in the world. Call or text Sean at 202-651-0309 or email him at email@example.com