What Should You Expect From Your Buyer s Agent?
Search for appropriate homes - If you ve told your agent you want three bedrooms and two bathrooms and she keeps showing you homes with 1 bathroom, your agent isn t paying attention to your needs.
Help determine value - Your agent should compile a comparative market analysis for any home on which you would like to make an offer. This helps you determine if the list price is appropriate and how much money to offer for the home.
Disclosure - Aside from the agent s fiduciary duty to disclose what he knows about the other party, he also has a duty to disclose any property defects that he has observed.
Purchase agreement - Your agent should explain to you the entire purchase agreement before asking you to sign it. The agreement should be constructed in a manner that protects your interests and meets your needs.
Counter offer - Should the seller counter your offer or you need to amend the purchase agreement to request repairs, your agent should fully explain the process and advise you to seek legal counsel, if appropriate, to ensure your protection.
Acceptance - Once your offer is accepted your agent should offer advice about obtaining a home inspection and other inspections that may be specific to the region, remain in contact with the title company and the lender to ensure that all time limits are met, and attend the closing with you.
Real estate agents who are members of the National Association of Realtors (NAR) are the only agents allowed to call themselves Realtors. NAR has its own set of ethics that Realtors swear to uphold in addition to their statutory fiduciary duties.
In November, 1986, the National Association of Realtors published a booklet titled: "Who Is My Client? - A Realtors Guide to Compliance with the Law of Agency". The booklet describes fiduciary duties in Section IV. DUTIES OWED BY AN AGENT TO HIS PRINCIPAL: "A real estate broker who becomes an agent of a seller or buyer, either intentionally through the execution of a written agreement, or unintentionally by a course of conduct, will be deemed to be a fiduciary. Fiduciary duties are the highest duties known to the law. Classic examples of fiduciaries are trustees, executors, and guardians. As a fiduciary, a real estate broker will be held under the law to owe certain specific duties to his principal, in addition to any duties or obligations set forth in a listing agreement or other contract of employment (such as a buyer agency agreement)."
These specific fiduciary duties include:
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 under single agency to reveal to the buyer:
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 any other offers or counteroffers that have been made relating to the property.
Any other information that would affect the buyer s ability to obtain the property at the lowest price and on the most favorable terms.
4. Confidentiality- An agent is obligated to safeguard his principal s confidence and secrets. A real estate broker, therefore, must keep confidential any information that might weaken his principal s bargaining position if it were revealed. This duty of confidentiality precludes a broker representing a seller from disclosing to a buyer that the seller can, or must, sell his property below the listed price. Conversely, a broker representing a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more for a property than has been offered.
5. Reasonable care and diligence - "An agent is obligated to use reasonable care and diligence in pursuing the principal's affairs. The standard of care expected of a real estate broker representing a seller or buyer is that of a competent real estate professional. By reason of his license, a real estate broker is deemed to have skill and expertise in real estate matters superior to that of the average person. As an agent representing others in their real estate dealings, a broker or salesperson is under a duty to use his superior skill and knowledge while pursuing his principal's affairs. This duly includes an obligation to affirmatively discover facts relating to his principal's affairs that a reasonable and prudent real estate broker would be expected to investigate."
6. Accounting - "An agent is obligated to account for all money or property belonging to his principal that is entrusted to him. This duty compels a real estate broker to safeguard any money, deeds, or other documents entrusted to him that relate to his client's transactions or affairs."
From Section VI. UNDISCLOSED DUAL AGENCY: A BREACH OF AN AGENT'S DUTY OF LOYALTY: "An agent's duly of loyalty compels him to refuse to accept any employment that would require him to act contrary to, or in competition with, the interests of his principal. Buyers and sellers of real estate are deemed by law to "compete" with one another and to have "adverse" interests. Accordingly, a real estate broker who acts as an agent for both a buyer and a seller in the same real estate transaction is a dual agent. A real estate broker who acts for both the buyer and the seller must disclose to both the Buyer and Seller his dual agency status and obtain written permission from both the Buyer and Seller for the broker to act in a dual agency capacity.