Who Is My Client?

A Realtors Guide to Compliance with the Law of Agency

Part 3 of 7

These specific fiduciary duties include:

• Loyalty
• Obedience
• Disclosure
• Confidentiality
• Reasonable care and diligence
• Accounting

1. Loyalty - “A duty of loyalty is one of the most fundamental fiduciary duties owed by an agent to his principal. This duty obligates a real estate broker to act at all times solely in the best interests of his principal to the exclusion of all other interests, including the broker’s own self-interest. A corollary of this duty of loyalty is a duty to avoid steadfastly any conflicts of interest that might compromise or dilute the broker’s undivided loyalty to his principal’s interests.”

2. Obedience - “An agent is obligated to obey promptly and efficiently all lawful instructions of his principal.”

3. Disclosure - “An agent is obligated to disclose to his principal all relevant and material information that the agent knows and that pertains to the scope of the agency.” This duty specifically obligates a real estate broker representing a buyer to reveal:

• The willingness of the seller to accept a lower price.

• Any facts relating to the urgency of the seller’s need to dispose of the property.

• The broker’s relationship to, or interest in, the seller or the property for sale.

• Any facts affecting the value of the property.

• The length of time the property has been on the market, and other offers or counteroffers that have been made.

• Any other information that would affect the buyer’s ability to obtain the property at the lowest price and most favorable terms.

(Continue To Part 4 of 7)