Real estate agents wear many hats. In addition to their role as salespeople, they also often handle accounting matters and act as customer service representative for their agencies, too. All of these responsibilities come with ethical obligations that realtors must be in compliance with, but do real estate agents have a fiduciary responsibility? The Realtor code of ethics specifically outlines a realtor’s professional obligations, including “the obligations of a fiduciary” — so, yes, realtors do have fiduciary duties. Read on for more information on these responsibilities, what they mean, and how to fulfill them.
One of the first fiduciary responsibilities is the responsibility of disclosure. A real estate agent much always provide information to clients that would be advantageous when they are negotiating. Additionally, when representing a buyer, a realtor must disclose details such as a property’s length of time on the market, the seller’s urgency to sell, any anything that may affect the value of the property. If a realtor represents the seller, they must disclose any relationship with the buyer, the identity of any bidders, and any offer that’s been made on the property.
Real estate agents’ obligations when dealing with money are particularly important to maintaining professional integrity. A realtor should never combine funds that are received from a sale or from client with their own business or personal funds. Realtors must be precise when dealing with any matter of accounting and ensure that all funds are allocated to the appropriate account. A mistake may create the appearance of impropriety, so accuracy is imperative. Real estate insurance is one of the best ways to protect against any potential mistakes and ensure that your business is protected from common liabilities.
Perhaps the most important fiduciary duty of a real estate agent is their obligation to remain loyal to their clients. In other words, a client’s interests must always be the realtor’s first priority, even above profits. This means that realtors should avoid a conflict of interests at all costs and protect clients’ interests fiercely. Agents should never interfere with a client’s interest in a certain property if they represent a buyer or interfere with the sale of a property if they represent the seller.
A realtor’s fiduciary duty demands that they be competent throughout every part of their work. Real estate requires the development of a very specific skill set, and agents must utilize those skills at every available opportunity in order to serve their clients and advocate for their interests. This can be captured in one word — diligence. A real estate agent must be diligent in every aspect of their relationship with clients and provide unique professional services that help clients achieve their goals.
About The Hilb Group
Deciding what coverage you need and what limits and deductibles make the most sense can be tricky. Founded in 2009, the Hilb Group has been helping clients to make sense of their options and make the smartest choices for their circumstances. Whether you need Warehouse Insurance or any other type of business or personal coverage, we encourage you to contact our friendly, experienced, and capable team today. Call us at (800) 776-3078 for a consultation.