Who Is My Client?

A Realtors Guide to Compliance with the Law of Agency

Part 4 of 7

Confidentiality - ďAn agent is obligated to safeguard his principalís confidence and secrets. A real estate broker, therefore, must keep confidential any information that might weaken his principalís bargaining position if it were revealed. This duty of confidentiality precludes a broker representing a seller from disclosing to a buyer that the seller can, or must, sell his property below the listed price. Conversely, a broker representing a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more for a property than has been offered.Ē

Reasonable care and diligence - ďAn agent is obligated to use reasonable care and diligence in pursuing the principalís affairs. The standard of care expected of a real estate broker representing a seller or buyer is that of a competent real estate professional. By reason of his license, a real estate broker is deemed to have skill and expertise in real estate matters superior to that of the average person. As an agent representing others in their real estate dealings, a broker or salesperson is under a duty to use his superior skill and knowledge while pursuing his principalís affairs. This duly includes an obligation to affirmatively discover facts relating to his principalís affairs that a reasonable and prudent real estate broker would be expected to investigate.Ē

Accounting - ďAn agent is obligated to account for all money or property belonging to his principal that is entrusted to him. This duty compels a real estate broker to safeguard any money, deeds, or other documents entrusted to him that relate to his clientís transactions or affairs.Ē

(Continue To Part 5 of 7)