You are obliged to grant your home buyer full access to real estate fiduciary duties upon entering a buyer agency contract with them. A fiduciary agreement requires a high deal of trust, and it is almost similar to that of a client-attorney, believer-religious minister, and doctor-patient relationship. Aside from the usual service that you render, you need to provide extra statutory/fiduciary duties to your clients. Below is some more info on the complete scope of buyer agent obligations.
Minimum Level of Service vs. Fiduciary Duties
As a real estate licensee, you are obliged to provide a minimum level of service to every client. You must do several things, whether the client signed a written agency contract or not. These things include revealing known material faults, treating customers fairly, providing records of all funds received and payouts, and not violating state and federal laws. Once a buyer agency contract has been signed, they are now a client. You need to provide them with the complete scope of statutory/fiduciary duties.
What Does the Full Scope of Fiduciary Duties Entail?
This acronym will help you recall the specific duties that you owe to each client when in an agency contract. Offer COLDD AC:
- C-skillful Care that you offer to your client
- O-lawful Obedience to the client
- L-Loyalty to the client (plain clarity)
- D-Disclosure of material facts that are relevant to the transaction
- D-timely Diligence in research, handling documents, and funds
- A-Accounting of funds
- C-Confidentiality of information that might cause potential harm now and always
What If Your Buyer Client Is Interested in One of Your Listings?
You might be able to stand for both sides of a transaction, as long as you disclose your multiple agency relationship and both parties approve. However, do note that dual agency is not totally reliable when it comes to fiduciary duties owed to each client. It possesses sole challenges, due to the confidentiality responsibility. In addition, disclosing negotiating tactics or the motive behind the selling of a property, unless you have specific approval in preferably written document form, might not be possible. Dual agency exists if licensees represent the buyer and the seller in the same firm. You should check with your state licensing agency to find further details on the requirements by the state and firm.
As a real estate licensee, you are prone to liabilities and risks when providing assistance to a client in the purchase of a property. So, handle each contract with the highest vigilance and professional discipline, to make the contract beneficial to both parties.
