Fiduciary Duties of a Real Estate Agent
If you’re planning to take a real estate license exam, you need to be familiar with the financial obligations a real estate agent agrees to. The relationship between an agent and a client is called a fiduciary relationship. Fiduciary means faithful servant, and an agent is a fiduciary of the client. In real estate, a broker or a salesperson can be the agent of a seller or a buyer.
A real estate agent owes clients certain fiduciary duties:
Accounting: The agent must account for all funds entrusted to her and not commingle (combine) client/customer funds with her personal and /or business funds.
Care: The agent must use all of her skills to the best of her ability on behalf of the client.
Confidentiality: The agent must keep confidential any information given to her by her client, especially information that may be damaging to the client in a negotiation.
Disclosure: The agent must disclose to the client any information she receives that may benefit the client’s position in a negotiation.
Loyalty: The agent owes undivided loyalty to the client and put the client’s interests above her own.
Obedience: The agent must obey all lawful orders that the client gives her.