A Realtor you work with to buy or sell a house in the traditional way is a Fiduciary. Fiduci – What? What is a fiduciary? Kathleen Elkins, writing for Make It, says, “It’s a key financial term. Yet most Americans cannot define it, and that puts them at risk.”
What is a Fiduciary?
Mark Walker at Reality Business News defines the subject: “Fiduciary means faithful servant. A person or organization who enters into a legal agreement to put another person’s needs first – even ahead of their own. In a real estate context, this means your Realtor is ethically required to put your best interests first. There are also a number of other responsibilities that come along with a fiduciary relationship:”
- Care – your real estate agent must give you their best at all times. They must use their skills, experience, and expertise to help further your best interests, even ahead of their own. The agent must use all of her skills to the best of her ability on behalf of the client.
- Loyalty at all times – The agent owes undivided loyalty to the client and puts the client’s interests above her own.no matter the situation, your Realtor must put your best interests ahead of everyone else’s during your transaction – that includes their own interests. There are no exceptions. Loyalty is a must.
- Confidentiality – Realtors are negotiation experts, and you hire them, in part, to handle the tricky business of negotiations for you. Any private info that you reveal to your agent should remain exactly that – private and confidential. This is especially so if it concerns info that could hamper your negotiating position.
- Full obedience – your real estate agent has an obligation to do as you wish –The agent must obey all lawful orders that the client gives her.
- Accounting – any funds that you entrust to your real estate agent must be accounted for properly. A Realtor must not, accidentally or otherwise, commingle your entrusted dollars with their business or personal funds.
- Total disclosure – remember; your agent has a responsibility to you. If they gain information that could assist you in negotiations, they have a duty to tell you, even if it makes their life more difficult. You are number one.
Being a Fiduciary
One final thought: a Realtor and a Registered Financial Advisor are fiduciaries, but not a stockbroker.
Those not working to the fiduciary standard are held only to a suitability standard, meaning their advice must be suitable for your financial situation.”
Stockbrokers are bound to a lower legal standard called suitability.The non-fiduciary stockbroker must only follow the standard of “suitability,” which does not require the client’s interests to be placed first; stockbrokers need only provide suitable advice given the client’s resources.
Good to know?
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