When working with a real estate agent, you may have heard the term “fiduciary” thrown around. But what exactly does it mean? And is a REALTOR® a fiduciary? The short answer is yes – real estate agents, including REALTORS®, have a fiduciary duty to their clients. But what does that entail?

At its core, a fiduciary duty is a legal obligation to act in the best interests of another party. In the context of real estate, a REALTOR® has a responsibility to prioritize their client’s interests above their own. Specifically, a REALTOR® owes their clients the following fiduciary duties:

1. Loyalty: A REALTOR® must be loyal to their client, putting their client’s interests above their own and avoiding any conflicts of interest.
2. Obedience: A REALTOR® must follow their client’s lawful instructions, even if they disagree with them.
3. Disclosure: A REALTOR® must disclose all material facts about the property or transaction to their client, including any defects or issues that could impact the property’s value.
4. Confidentiality: A REALTOR® must keep their client’s confidential information private, even after the transaction has ended.
5. Reasonable care and diligence: A REALTOR® must use reasonable care and diligence in their duties, including conducting proper research, providing accurate information, and ensuring their client is fully informed throughout the transaction.

These fiduciary duties ensure that a REALTOR® acts in their client’s best interests. It’s important to note, however, that not all real estate agents are necessarily fiduciaries. Only those licensed as brokers or REALTORS® are held to this higher standard of care.

So, what does all of this mean for you as a client? First and foremost, you can trust that your REALTOR® is working in your best interests throughout the entire real estate transaction. They will put your needs and priorities first, even if it means potentially losing a commission or missing out on a sale.

It also means that you should feel comfortable sharing information with your REALTOR® that may be relevant to the transaction. The more your REALTOR® knows about your goals, needs, and preferences, the better they will be able to serve you and meet your needs.

In summary, a REALTOR® is indeed a fiduciary, meaning they have a legal obligation to act in their client’s best interests at all times. This includes duties of loyalty, obedience, disclosure, confidentiality, and reasonable care and diligence. By working with a REALTOR®, you can trust that your interests will be protected and that you’ll receive the highest service and care throughout your real estate transaction.

Questions or comments? Contact Jonathan Baer.