Where Does Your Real Estate Agent's Loyalty End?
In every state, these days, the real estate broker is required to explain, early on, just who he or she is working for.
What difference does it make?
Plenty.
And whether you use a buyer's or seller's agent, you can make your Tucson real estate transaction much more effective if you understand the legal fiduciary duties of an agent.
While there are at least half a dozen such duties, the three that are most important to you are confidentiality, obedience and notice, all owed to the real estate agent's principal, otherwise known as the client.
To take the first, confidentiality: the seller's agent is obliged to keep the seller's situation confidential. The buyer who asks a seller's agent "Do you think they'll take less?" or even "How much do you think we should offer?" is not entitled to an answer, even if the real estate agent knows the sellers are desperate and will grab at any offer.
A seller's agent owes no confidentiality to the buyer, though. If the buyers say "We'll offer $140,000, and if we had to, we'll go to $150,000", the real estate agent is actually duty-bound to pass the information on.
That's because of the fiduciary duty of notice. The seller's agent is required to convey to the seller anything that would be of value -- and owes no duty of confidentiality to the buyer.
The buyer is, however, entitled to honest treatment even from the other party's real estate agent. A scrupulous seller's agent cautions the buyer "Don't tell me anything you wouldn't want the seller to know, because telling me anything is the same as if it were told to my principal."
A buyer's agent, on the other hand -- one specifically hired to represent the buyer -- owes just the opposite duties. He or she must keep the buyer's information confidential, and obey the buyer's lawful orders. All that's owed to the seller is honest treatment; sometimes an honest answer is "I can't answer that because of my duty to my client."
These days about half of those buying real estate retain their own buyer brokers. The old system, under which almost all agents represent sellers, can still work well, however -- if you keep in mind just who is on which side, and where loyalties are legally required to reside.
Editors Note: In many states, there are other types of possible agency relationships between a broker and a client with different confidentiality requirements than those noted above. Our advice is to ask your real estate agent.
Written by Edith Lank
Sherie says: Remember, I'm here to guide you through the entire real estate process!
