A real estate agent’s relationship with their client, such as a buyer or seller, is a fiduciary relationship.
A real estate agent includes realtors, brokers, or the like. Inside the agency relationship, a principal or client gives legal authority to their agent to act on the principal’s behalf when dealing with a third party. A principal can be an individual or a business. The same stands for an agent.
These relationships sit at a high level of trust and confidence that must be maintained for a successful business interaction. Because the principal has given trust and authority to the agent to supervise their property, the agent has a legal fiduciary duty to their principal. The agent is obligated to act in the best interest of the principal.
While an agent’s main priority is their client, they must deal fairly and truthfully with all parties within a transaction.
These are some of the core fiduciary duties of a real estate agent:
Any information learned about their client must be kept within the fiduciary relationship. This includes the client’s affairs and motivations for buying or selling. Information leaks may affect negotiations.
An agent is required to perform their services to the best of their ability on the principal’s behalf.
An agent must account for all funds sent or received on behalf of their client. This does not include client/customer funds commingled with a real estate agent’s personal or business funds.
A real estate agent must disclose any information they receive that may benefit the client’s position in a negotiation or otherwise concerning the principal’s property. An agent must disclose all information they know about a property to purchase as well.
An agent must act solely in their client’s best interest. An agent must always put their client’s needs above their own
Agents must obey all lawful instructions given to them concerning their principals’ property.