Your Home is one your largest investments
Your real estate agent’s fiduciary responsibility to you
Fiduciary Responsibility
Whether your real estate agent is helping your buy or sell a home, the agent owes you and other parties in a potential transaction certain duties by being deemed to be a “Fiduciary”. Fiduciary responsibilities are the highest duties known to law - and it may surprise you to know your real estate agent is obligated to same level of obligation as trustees, executors or guardians. These are the types of duties any professional such as a lawyer, doctor or financial advisor owes their clients.
In addition in Massachusetts a real estate agent must let you know who they represent in a potential real estate transaction. This must be provided in writing at the time of your first personal meeting to discuss a specific property - learn more from at the Commonwealth of Massachusetts website.
The real estate industry uses the acronym OLDCAR to help them remember an agent and broker’s duties to their clients. These duties are:
01 — Obedience
A real estate agent has the duty to be honest, ethical and fair with all parties and in all transactions.
Beyond that when a real estate agent represents your buyer or seller agent, they are also obligated to following your instructions as long as you do not ask them to do something illegal or unethical or something that contradicts the terms of your contract.
02 — Loyalty
Your agent must be loyal to you, their client, and keep your best interests ahead of all others
Your real estate agent will proactively seek avoid any potential conflict of interests that might compromise their loyalty to you.
03 — Disclosure
Your real estate agent is obligated to disclose all relevant and material information to you are their client. This includes anything that could impact your ability as a seller to obtain the highest price and best terms or as a buyer to obtain the lowest price and most favorable terms.
Real estate agents are obligated to disclose any material facts to non-clients that concern the value of the property as part of the agent’s duty to act ethically and fairly.
04 — Confidentiality
Your real estate agent is obligated to keep your confidences and secrets. Your agent is obligated to keep confidential anything that could weaken your bargaining position throughout the real estate transaction.
NOTE: this confidentiality does not extend to concealing material facts about a property that could affect its value.
05 — Accounting
An agent and their broker are obligated to account for all money and property that is entrusted to them. This usually refers to how a brokerage manages deposits or documents of value for their clients.
06 — Reasonable Care
Your agent is expected to use reasonable care and diligence in all real estate transactions. An agent is expected to have more expertise than the average person. This means a real estate agent is expected to have the skills to discover facts related to their clients property or interests.
Learn more about your Real Estate agents fiduciary duties from the National Association of Realtors.
