Who Looks out for Your Best Interests?

Do you know the difference between being a customer and becoming a client?  To a Realtor, it's a huge difference, and one you should know about too!  If you walk into an open house, or you call a Realtor you are, at that point, a customer.  A good REALTOR® will do his/her best to get you information and be helpful to you.  But beware, you are likely going to be talking with a Realtor who has a listing, and is duty-bound to keep the sellers best interests in mind.  However, once you sign a contract with a REALTOR®, you are now a client and you have someone looking out for YOUR best interests!

When you enter into a contractual relationship with a Real estate agent, you form an AGENCY relationship. There are legal definitions and legal obligations formed by the agent when you sign a contract. Now that you are officially a client, your Real Estate Agent is bound to these requirements:

• Loyalty - act only in your best interest
• Obedience - follow through on your instructions (unless of course it's illegal)
• Disclosure - tell you about all material facts about a property, or information about a particular buyer or seller, as long as that information doesn't infringe on a prior agreement with past or present clients.
• Confidentiality - keep all of your information private unless it is a material fact that must legally be disclosed
• Reasonable care - use skills, knowledge, training, and experience to carefully perform duties on your behalf
• Accounting - account for earnest money and assist you in understanding fees associated with purchasing a home

If I'm the listing agent and you visit me in an open house and tell me you love the house, you'd pay $10,000 more due to the location, you're mortgage officer pre-approved you for $50,000 more, it's the best house you've seen and you've been looking for 2 years for the perfect house down the road from a particular park and you're going to go call your sister to look at it. If you and I don't have- and don't form- a contractual relationship, you've probably given me more information than you want someone on the other side of the negotiating table to have.

The list of commitments a Real Estate Agent owes you once you become a client is called a fiduciary relationship.  This is the same kind of relationship an attorney has with his/her client.

Fiduciary duty requires the highest standard of care, and imposes the strictest standard of behavior. A REALTOR® must not put their personal interests before their clients.  This relationship is based on good faith, loyalty, and trust.  As Warren Buffet said, doing what is legal isn't enough. We must start with what is legal, then do what is right!

Do you know the difference between being a customer and becoming a client?  To a Realtor, it's a huge difference, and one you should know about too!  If you walk into an open house, or you call a Realtor you are, at that point, a customer.  A good REALTOR® will do his/her best to get you information and be helpful to you.  But beware, you are likely going to be talking with a Realtor who has a listing, and is duty-bound to keep the sellers best interests in mind.  However, once you sign a contract with a REALTOR®, you are now a client and you have someone looking out for YOUR best interests!

When you enter into a contractual relationship with a Real estate agent, you form an AGENCY relationship. There are legal definitions and legal obligations formed by the agent when you sign a contract. Now that you are officially a client, your Real Estate Agent is bound to these requirements:

• Loyalty - act only in your best interest
• Obedience - follow through on your instructions (unless of course it's illegal)
• Disclosure - tell you about all material facts about a property, or information about a particular buyer or seller, as long as that information doesn't infringe on a prior agreement with past or present clients.
• Confidentiality - keep all of your information private unless it is a material fact that must legally be disclosed
• Reasonable care - use skills, knowledge, training, and experience to carefully perform duties on your behalf
• Accounting - account for earnest money and assist you in understanding fees associated with purchasing a home

If I'm the listing agent and you visit me in an open house and tell me you love the house, you'd pay $10,000 more due to the location, you're mortgage officer pre-approved you for $50,000 more, it's the best house you've seen and you've been looking for 2 years for the perfect house down the road from a particular park and you're going to go call your sister to look at it. If you and I don't have- and don't form- a contractual relationship, you've probably given me more information than you want someone on the other side of the negotiating table to have.

The list of commitments a Real Estate Agent owes you once you become a client is called a fiduciary relationship.  This is the same kind of relationship an attorney has with his/her client.

Fiduciary duty requires the highest standard of care, and imposes the strictest standard of behavior. A REALTOR® must not put their personal interests before their clients.  This relationship is based on good faith, loyalty, and trust.  As Warren Buffet said, doing what is legal isn't enough. We must start with what is legal, then do what is right!