Fiduciary Responsibility and Your Real Estate Deal: My Take
Fiduciary responsibility is one of those things that most people understand—on the surface. In some ways, fiduciary responsibility is kind of like the United States Tax Code… the surface knowledge most people have can belie just how deeply the tentacles of fiduciary responsibility runs in the real world.
Rather than throw around buzzwords or industry jargon, I want to explain to you in clear, simple language what my fiduciary responsibility to you actually is… so you can understand it on a deeper level. Don’t worry—you won’t need an attorney to decipher what I’m saying here.
So, What is Fiduciary Responsibility?
In a nutshell, a fiduciary is an agent of trust… so fiduciary responsibility is nothing more than my obligation to work with you in an honorable and trustworthy way. But how does this apply to our working relationship?
I Pledge to You My Loyalty
You’re counting on me to be loyal to you and your best interests in everything we do. This means that I won’t let myself do anything that even looks like it could be interpreted as a conflict of interest. The reality is, you aren’t a real estate pro… you aren’t expected to know property values as well as I do. This is why it is wrong (in many cases, illegal) for your real estate agent to list your home for sale, and immediately buy it with the intention of selling it for a quick profit. This is just one example of how I pledge to you my loyalty—there are many, many others.
I Pledge to You My Obedience
Whether you are buying or selling a home, you have goals and desires. It is my job to learn what they are and to act accordingly. You’ll be giving me instructions to follow. I promise to be obedient to the letter and the spirit of these instructions unless you are asking me to do something illegal or unethical.
I Pledge to You Full Disclosure
As your real estate agent, I may hear things about a property that could impact your decision to proceed with a transaction… or in what way to proceed. I promise to give you all relevant information of which I am aware so you can make an informed decision.
I Pledge to You Confidentiality
I will keep our relationship confidential before, during and after we complete your transaction. Your secrets are safe with me. For instance, if you need to sell in a hurry and share with me your willingness to sell for a certain price, I’m not going to share this information with others. It would harm our bargaining position and is a violation of my fiduciary responsibility to you and your best interests.
I Pledge to You Reasonable Care & Diligence
I will practice reasonable care and diligence in everything I do for you. If I know something, I will say something as long as it pertains to anything related to the purchase or sale of your property.
I Pledge to You Proper and Full Accounting
No discussion of fiduciary responsibility is complete without turning our attention to money. You are entrusting me with one of the biggest—if not the biggest—single transaction of your life. I will carefully guard your assets to ensure that they are kept safe. This extends to any valuables you entrust me with… up to and including giving you a complete list of costs, fees and expenses related to your real estate transaction.
I Pledge to You My Promise to Always Do What is Right
Doing what is right isn’t always the easiest course of action. I promise that I’ll always do what is right… even if it isn’t the easiest path.
How I Protect Your Best Interests
You are counting on me to perform a function to the best of my ability: to look out for your best interests and to do so to the best of my abilities. This means that when I make promises to you or need to disclose something to you, I always put it in writing in one of the following ways:
In written agreements spelling out exactly what I say I will do—and when:
- Situational disclosures (for instance, if in addition to being your real estate agent I am also employed or affiliated with other parties to the transaction, which includes mortgage companies, contractors, property staging companies, etc.)
- Anything that could impact your decision to proceed with a transaction or could conceivably have a negative financial impact on you or your interests
I take my fiduciary responsibility to you very seriously. You have a lot riding on this transaction. I want you to be well aware of what we are doing, when, and why. This will enable you to make the best decision.