By: Aimee Hanson – Broker/Founder
What are good solid relationships built on?
One thing. Trust.
Without trust, we are doomed, we have fear, we feel uncomfortable and uncertain. So, you might ask yourself, how can I trust my Real Estate Agent? How can I be sure they are working for me?
There are some key things you should expect when you hire a real estate professional.
One of the most valuable things you can receive is EXCLUSIVE REPRESENTATION. Huh? What is that? What does that even mean or include?
Before you decide on an agent or sign any representation contract, it’s important to understand what fiduciary duties an agent/broker would owe to you.
Equally important is for you to ask the professionals you’re considering working with some questions. For example: What do the fiduciary duties mean to them as it relates to YOU? What are the 6 Fiduciary Duties? What do they mean?
If you find that the agent you’re talking with isn’t completely clear about what you’re asking or can’t explain the very basics of these duties,
STOP. Don’t go any further. MOVE ON.
Like I said, this isn’t just a “hook up”, it’s a relationship and it’s serious.
You deserve to feel safe and you deserve fierce representation from an agent or broker that understands the seriousness of solid representation.
Here are some guidelines on the fiduciary duties that come along with good solid representation.
Read them. Know them. Expect them.
Loyalty means that your agent will act only in your best interest at all times and to the exclusion of all other interests, including their own self-interest. You’re loyal to your best friend, your partner and your pet. Yes, Loyalty is a BIG DEAL and you deserve it from your real estate professional. They need to put your needs above all others.
Obedience means they will follow all of your LAWFUL instructions throughout the course of your contract with them. I want to stress “lawful” instructions. If you ask them to break the law or discriminate based on Fair Housing Laws, they can tell you to hit the highway. But, so long as it’s lawful and what you’re asking them to do doesn’t hurt your positioning or negotiations, they should follow your request. Let’s all just be reasonable here though. If you ask them to grab you some groceries or do your laundry, it might be “lawful” but certainly isn’t reasonable under the scope of their contract or even their area of expertise.
Disclosure means that your agent will disclose to you all relevant and pertinent information they have with regards to your transaction. They also will be obligated to disclose to you any adverse material facts they are aware of no matter who they represent. Under exclusive representation, your agent will be obligated to disclose to you any information they come across or receive that could essentially have some type of effect on your transaction. Sometimes you may like what they have to disclose. Sometimes you may not. Either way, they have to tell you what they hear and what they know. If you’re a seller, this could be any information that might affect your ability to obtain the highest price and best terms. If you’re a buyer, it could be information that would allow you to get the best terms or lowest price on a property. All in all, your agent can’t keep you in the dark when it comes to any facts or information they receive. Isn’t that a beautiful thing?
Agents/brokers are obligated to safeguard your confidence and secrets. Confidentiality doesn’t only last as long as your contract with them does. It lasts FOREVER. Anything regarding your motivations for selling/buying, what price you might pay/accept or any other “terms” they are aware of that could potentially affect your negotiations or outcome have to remain confidential. Oh, one more thing….This duty of confidentiality does not allow any agent to keep adverse material facts they are aware of confidential. They are required to let all parties know (no matter who they represent) any material fact they are aware of. They’re also not allowed to misrepresent the condition of the property. Ever. Whew!
Reasonable care and skill is the standard of care you should expect from your agent/broker. It’s a responsibility and obligation for them to discover facts and information relating to your transaction that any “reasonable and prudent” real estate professional would be expected to discover. Through their licensing, it’s been determined that an agent/broker has skills, education and expertise in real estate that would be above that of an average person who isn’t licensed. When your agent/broker is handling your affairs, they are obligated to use specific skill and knowledge they possess to make sure you are safe, secure and simply put, well cared for!
If you entrust something to your agent/broker (whether it be money, personal information, property or even possessions) they have a duty to protect it, account for it and safeguard it. There may be a lot of things you entrust your agent to safeguard. How about the keys to your house? The security code to your alarm system? Did you give them some financial information that is sensitive? No matter how seemingly small or large the item or information may be, they need to hold it tight and keep it safe.
I tell my clients and the agents I teach, “If you ever have a dilemma on how something should be dealt with, all you need to do is ask yourself a few simple questions. WHO does the agent represent and HOW do any or all of the fiduciary duties apply to the question at hand?”
If you are able to do that, you’ll gain a clear sense on how things should be handled, in many situations. Oh, and you’ll have a good solid leg to stand on too.
These 6 fiduciary duties are the backbone of the real estate business when it comes to exclusive representation.
It’s a serious relationship.
Next time we’ll talk about the different types of representation available to consumers and what they mean for both the agent and the consumer.