Realtors, Too (Don’t Forget About Realtors)
“In a new lawsuit, the Chamber of Commerce is seeking to prevent the government from holding retirement advisers to the same standard as doctors, lawyers or accountants ” known as a “fiduciary” standard ” which requires people in positions of trust to always act in their client’s best interest.”
–“Isn’t Honesty the Best Policy?”; The New York Times (6/10/16)
In the ongoing (non)debate about whether financial advisers should be held to a fiduciary standard (they should, but that’s not automatically the case now, contrary to what many consumers believe), it always galls me that Realtors are omitted from the list of professionals who are obliged to act in their clients’ best interests.
So, here it is, in black and white: when you hire a Realtor to represent you in the purchase or sale of a home, he or she has what is called a “fiduciary duty” to act in your best interests.**
Two Duties
In legalese, the client is known as the principal, and the Realtor is the agent.
The fiduciary standard further cleaves into two, distinct duties: 1) a duty of care; and 2) a duty of loyalty.
In plain English, to practitioners that means: a) know your stuff, i.e, be (at least) professionally competent; and b) don’t screw take advantage of your clients.
**The one, arguable exception to that: when the same agent is representing both parties in a transaction — a practice called “dual agency.” It’s always mystified me how one agent can simultaneously advocate for mutually exclusive agendas (pay less vs. get more).
Which is why I contractually promise not to do it.
See also, “Realtors, Financial Advisers, and Fiduciary Duty“;”Realtors, Wall Street, and Fiduciary Duty“; “Will the Last Active Investor Please Turn Out the Lights?”; and “Picking Stocks (& the Case for Indexing).”
