Yesterday we said that a REALTOR® has a fiduciary duty to his/her client for 6 specific standards. We remember the standards by using the acronym OLD CAR: (Obedience, Loyalty, Disclosure, Confidentiality, Accountability and Reasonable Care/Diligence). Today we’ll cover Loyalty.
LOYALTY: The REALTOR® must always place the client’s interests above all others. This means always trying to get the lowest price when acting as a Buyer’s Agent, even though the commission will be lower. When acting as a Seller’s Agent, it not only means trying to get the highest price, it also means not doing anything to compromise the seller’s bargaining position. This includes not talking about the seller’s possible willingness to accept a lower price, or not revealing that the seller might be under financial (or other) pressure to sell by a certain date.
Under the duty of Loyalty, the REALTOR® also has a responsibility not to act in self-interest, unless he/she has approval from the client. This includes having to reveal his/her REALTOR® status whenever personally buying or selling a property in which he/she has an interest.
Here’s where it gets interesting: I recommend that potential buyers do NOT call the listing agent when they find a home that they’d like to investigate. Why? Remember that the listing agent is a Seller’s Agent, whose fiduciary responsibility and undivided loyalty are to the seller. You want to have a Buyer’s Agent who will work only for you. There is a situation called Disclosed Dual Agency where a Realtor® can represent both the seller and the buyer. However, in that situation there’s a potential conflict of interest. The fiduciary duty of undivided Loyalty is limited because the Realtor® can not be 100% loyal to both the seller and the buyer.
Next time we’ll talk about Disclosure.
Note: I wrote this article; these are my personal views and do not necessarily reflect the views of Diane Turton, Realtors.
Leonard “Len” Dunikoski, GRI
Diane Turton Realtors – Rumson Office
8 West River Road
Rumson, NJ 07760
(732) 239-0739 (cell) (732) 530-6686 (office)