If you are my client, there are certain duties that I am bound by the National Association of Realtors to perform. The NAR Code of Ethics MUST be adhered to because I call myself a REALTOR®. Please keep in mind that in some states you can hire someone who is a “Real Estate Agent” but NOT actually a member of NAR, and therefore not a REALTOR®, and those people are not required to follow the Code Of Ethics. Many of the salespeople who work in builders’ models are not REALTORS®.
First of all, I am required to treat everyone fairly, whether they are my client or not, but for those who are actually clients I also have to abide by certain Fiduciary Duties.
What make a person my client? Usually a piece of paper. A listing contract makes a seller my client, and a Representation Agreement makes a buyer my client. Remember that everything in real estate MUST be in writing to be enforceable, so be sure that you are actually a client before you say too much.
What are the Fiduciary Duties? We remember them with the acronym OLD CAR:
- Obedience: As long as your directions are legal, I must follow them. You want me to present a really high or really low offer? I have to do it. You want to see a house that is out of your price range, we’ll go. You want to accept this offer and ignore the other because you don’t like the buyer’s car? That’s what we’ll do. Fair or not, as long as it is legal. (This does NOT include any kind of discrimination, because that is illegal and totally not my style.)
- Loyalty: I must put your best interests before mine and the other parties. If you prefer the house that only pays me 2% commission instead of 3%? That’s your call. I can’t try to sway you to the house where I would earn more, or to accept an offer that is better for me.
- Disclosure: It is my duty to disclose any facts that may effect your desire to purchase or sell a home. You want to sell your home, but Brad Pitt just bought the house next door? If I know, I need to tell you because you might want to stay to meet the new neighbors. You found the perfect house, but a new highway is about to be built in the front yard, I have to tell you. The key here is IF I KNOW ABOUT IT. I try to keep up on stuff but if I didn’t know, you can’t fault me for that. If I find out something about the other party that would help your position, I would tell you. Which is why the next point is so important…
- Confidentiality: I am required to keep your secrets. You would actually pay more or sell for less? I can’t tell anyone. You are having financial issues, I can’t tell, You want to buy the house to tear it down? That’s your business. I am bound to keep your information confidential and NOT reveal anything that could help the other party have an unfair advantage, because if I do, according to the rule of Disclosure, their agent will tell them. This duty extends beyond closing and can never be released except by a court order, and this is why I wrote this post: You Have the Right to Remain SILENT!
- Accounting: Your REALTOR® is responsible for keeping track of your documents, making sure everything is signed that needs to be, that funds are all accounted for and delivered where they need to go, and that everything is reported and documented as it should be. If additional documents are needed, it is my duty to be sure those are collected and signed.
- Reasonable Care: A REALTOR® is required to be knowledgeable about the process of buying and selling and guide you through it without harm to you. I am expected to advise on many facets of the transaction, and to know where to send you for more information if I am unsure.
PLEASE take the time to think carefully about WHO is representing your best interests, and if they are REQUIRED to do so. If the person who is “helping” you is not actually a REALTOR®, they may not be providing these Fiduciary Duties to you.