"Being a fiduciary is more than a legal obligation; it’s a commitment to prioritize your client’s best interests with integrity and professionalism."

- Dan Rochon

We are now in Be a Fiduciary. This blog will be an excellent resource to help you succeed in your Real Estate business.

Be a Fiduciary: Understanding Your Obligations as a Real Estate Agent

As a licensed real estate agent, you have a responsibility to both clients and customers, but your duty to your clients is greater. When a buyer or seller hires you as their agent, you become their fiduciary, which means you have a legal obligation to act in their best interest. To fulfill this responsibility, you must remember the acronym OLD CAR, which outlines the duties you owe to your clients.

Obedience: You are obligated to follow your client's instructions and perform all the legal activities they ask of you regarding buying, selling, or investing in a property.

Loyalty: You must prioritize your client's interests over all others, including your own. If you or a close relative have any interest in a transaction you represent, you must disclose this information to all parties.

Disclosures: You must advise your client about appropriate disclosures. These will differ from state to state, and your broker can advise on the documents that will be necessary. When in doubt, you should disclose. You should disclose latent defects and material facts, and any affiliated business arrangements or joint ventures that you or your brokerage have with a mortgage financing or title company.

Confidentiality: You must not share anything you learn about your client without their permission, particularly knowledge that could hurt your client during a negotiation. Anything you learn about their financial situation, personal matters, or motivation to buy or sell should not be shared.

Accounting: You must care for any money entrusted to you that is related to the transaction. If you must hold money in escrow, the agent has an obligation not to mix personal funds with their private or business capital.

Reasonable Care and Due Diligence: You should have a high degree of knowledge about real estate and understand the factors that drive the market. When you are not a qualified expert, you should share with your client that you are not the resource for their needs. For things that fall outside of your expertise, you should be the source of the resource.

Care Owed to Client and Customer: You must act in good faith and be fair and honest with both the client and the customer.

In summary, to be a fiduciary, you have a legal and ethical obligation to act in your client's best interest. Understanding your obligations and fulfilling them is critical to maintaining trust and building a successful career in real estate. Remember the OLD CAR acronym, and you will be well on your way to serving your clients with excellence.

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