Fiduciary – What Your REALTOR Owes You

Fiduciary - What Your REALTOR Owes You

What Your REALTORS Owes You – Their Fiduciary Responsibility

What in the world is a Fiduciary?


Fiduciary.  What does that mean?  This strange word has an extremely important meaning, one which I hope this article helps more owners of real estate property understand when they’re getting ready to hire their next real estate agent or broker.


Fiduciary, pronounced “fah-doo-she-air-ee”, is a Latin word which literally means “to trust”.  Here in the US, in many practices such as Law, Real Estate, Finance, and a host of other professions, a person in a fiduciary role is someone who not only has a moral obligation, but almost always, a legal obligation to act in a trustworthy manner, putting the client’s financial interests ahead of his or her own.  On the surface it may seem simplistic, but to fully understand one’s fiduciary responsibility, one has to recognize the scope and breadth that this strange little Latin word brings to the table.  In practice, it means that whoever you’re trusting with your money, health, safety, etc., they have the literal and legal obligation to put their clients’ interest in front of their own.


Fiduciary in Real Estate


Admittedly, the real estate profession can be difficult, demanding, and downright drudgery, but that doesn’t matter when it comes to the law and the REALTOR’s obligations to his or her client.  It can be said a thousand times over, anyone in a fiduciary role must have the ability to put their client’s financial interests first.  This can be difficult for many real estate agents to understand, and even harder for them to follow.  Not to disparage the majority of honest upstanding real estate professionals, it’s not a far stretch to say that a lot of agents get caught up focusing on their own personal profits and interests first.


Why wouldn’t they?  They’re doing all the work, right?  Well yes, but that work is provided by and purely for the benefit of the home seller or home buyer first.  The agent is no more than second in line.  How does this get complicated?  Well, any and all agents involved in a sales or purchase deal have to be able to balance the fiduciary responsibility of their clients.  Every real estate agent must clearly understand that both sides, buyer and seller, have different goals, needs, wants, and interests.  A buyer, searching for homes for sale wants to get the best deal possible, which often translates into the lowest price possible.  A seller also wants to get the best deal possible, but to them, the highest price is usually more what they’re looking for.  So how do real estate agents get the highest price for the seller, while still getting the lowest price for the buyer?  Well, let’s just say it’s more of an art than a science.


The Sides of a Real Estate Sale


In the majority of home sales transactions, there are usually two agents involved.  One who represents the buyer and another who represents the seller.  In this situation, both agents have to negotiate together to get to the best middle ground deal between what each of their clients wants.  There is always give and take in home sales transactions.  One side gives a little, the other side takes a little, then the tables turn and then the process repeats itself again until a final, final agreement is struck.  Real estate agents do work hard for their money, and contrary to some opinions, they are not overpaid for their services.  Negotiations can be difficult, time consuming, and a royal pain in the butt.  Things can even be harder when one agent is new or inexperienced and the other agent has to take a leadership role guiding his/her equally paid counterpart through every aspect of the settlement.  But at the end of the day, the deal that gets struck has to benefit the client first.


What Your Real Estate Agent Owes You


Your REALTOR owes you a fiduciary, meaning they should always have your best interests BEFORE their own.  If it comes down to buying the home of your dreams in Lakeview, but your agent has another home for sale in which they would make more money, they owe it to you to put you in the home that fits you best…legally.

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  1. […] importantly, in Real Estate, and unlike the salesman at the furniture store, all REALTORS have a FIDUCIARY DUTY to you, which means they have to put your financial interests FIRST.  This differentiates REALTORS […]

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