Fiduciary Duty Real Estate
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Fiduciary Duty in Real Estate
Fiduciary duty in real estate encompasses the legal responsibilities of a real estate agent. Learn more in this comprehensive overview.
Fiduciary duty in a real estate transaction refers to the legal responsibilities of a real estate agent to the client, not the customer. The relationship between them (the client and the real estate agent) is called a fiduciary relationship.
One should not assume that the person showing the property is representing them. These agents represent clients who have signed an agency agreement.
One of the real estate agent’s salient fiduciary duties is the obligation to deliver on their responsibility with utmost honesty and act in the interests of their clients and, at times, the buyer. When representing both the buyer and seller in real estate transactions, the agent will spend most of their time working independently for the client.
At the same time, a broker steps into the buyer’s shoes when negotiating business opportunities. So, on the other side, the broker can be the buyer’s agent or the seller’s agent.
A representative from the Perigon Legal Services can analyze the contract and oversee the closing. That may be necessary, especially if the real estate agent breaches their fiduciary duty.
Basic Parts of Fiduciary Duty in Real Estate
Fiduciary is defined as something relating to confidence or being held in trust. Although a fiduciary relationship often concerns money, it can apply to any situation where one individual places confidence in someone else and trusts that they will act in their best interests.
According to the National Association of Realtors, the basic parts of fiduciary duty in a real estate transaction consist of obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care and diligence. Real estate brokers are responsible for conducting their business honorably.
Realtors are obligated to fully disclose material facts on the property to their clients. Material facts are those that might cause a change in the sale or purchase of a property when disclosed to buyers or sellers.
The proxy is obligated to fully disclose any information within their control that may be important in the decision-making process among the parties involved. This will go a long way in fostering a solid relationship between them.
Information given to the proxy by the client should remain confidential, significantly if it were damaging to the client during a negotiation. You should not disclose any information about your client’s business, financial affairs, or personal affairs.
You can only disclose the information if a court of law instructs you to do so. In this regard, any acts of self-dealing would significantly damage the confidence levels between the parties if detected.
All documents entrusted to the agent, property, and funds in the transaction should be accounted for. You should accurately report all the funds used concerning the transaction and their ultimate disposition.
Reasonable Care and Diligence
A real estate broker must have the proper knowledge to advise and guide clients through the sale process without harm. An agent must use their skills diligently on behalf of their client. It’s important to note that a fiduciary owes their client their best efforts. The proxy should know how to market a property, show houses, negotiate to sell, and give relevant advice.
Statute of Limitations on Real Estate Breach of a Fiduciary Duty
When Do Fiduciary Duties End Real Estate
Breach of Fiduciary Duty Real Estate Agents
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