Tuesday, February 27, 2007

Agent Fiduciary Responsibility

The agent told me the Seller’s were broke and had to sell…can they do that?

It depends on what the agent’s relationship with the Seller is. If it is the Listing Agent then they may not say, or imply, anything of the sort without your permission. When a Seller signs a contract with an agent they form what is known as a fiduciary relationship. Webster defines fiduciary as “a: held or founded in trust or confidence b: holding in trust c: depending on public confidence for value or currency”. Compromising the Seller’s position by disclosing a negotiation weakness is a serious breach of trust or confidence, the fiduciary relationship, the essence of the contract relationship between the parties.

Further, one of the listing documents required by Nevada State law is Duties Owed by a Nevada Real Estate Licensee. The language in that document includes the following: A Nevada real estate licensee shall: 2. Not disclose, except the licensee’s broker, confidential information relating to a client for 1 year after the revocation or termination of the brokerage agreement unless licensee is required to do so by court order or the client gives written permission. 3. Promote the interest of the client by: a. Seeking a sale…at the price and terms stated in the brokerage agreement or at a price acceptable to the client. C. Disclosing to the client material facts of which the licensee has knowledge concerning the real estate transaction.

The Listing Agent can only talk about the price and terms the Seller has agreed to in the Listing Agreement, or any subsequent modifications thereof. Conversely, the Selling Agent, if other than the Listing Agent, actually has an obligation to tell a prospective Buyer anything they know or can learn about the Seller’s situation. It is common for a Selling Agent to ask the Listing Agent questions that they can’t answer without the Seller’s permission. Sadly, many respond with too much self-serving candor to the detriment of those they have contracted to serve.

Our Advice: If an agent would compromise you in one area, price, how well are they negotiating on your behalf in the many other aspects of the transaction such as: repairs to be completed, move out date, personal property included in the sale, etc. Such an agent has violated not just the law, but any moral and ethical standard of decency. If you know that you are in such a situation, you should demand an immediate cancellation of the listing contract so you can hire an agent that will work for you without compromise. If the agent won’t cancel then consider a complaint to the Board of Realtors and/or the Division of Real Estate. You should not be trapped by an unscrupulous agent that is working against you, not for you.

Good real estate agents are very valuable … especially if you have financial or other difficulties. What is a good agent? A good place to start is honesty and integrity. Fortunately, in the Carson Valley you will find that most agents possess those qualities.

When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Lisa Wetzel & Jim Valentine, RE/MAX Realty Affiliates, carsonvalleyland.com, 775-781- 5472.

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