What is Fiduciary Duty? Here is the Wikipedia definition, “A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence”. More simply put, “Fiduciary Duty” is anyone representing you or your concerns is looking out for YOUR best interest. So, who owes you this kind of “Duty”? bankers, attorneys, trust departments, and yes, your real estate agent. When you hire any of these professionals to look after your best interest, they are supposed to be working for you, period. This duty goes beyond personal relationships or other business relationships.
Real Estate Agents-When you hire an agent to represent you, make sure that they really are representing you. Let me explain: in the real estate world of “agency”, there are Seller's Agents, Buyer's Agents, and Transaction Brokers.
Seller's Agents owe you Fiduciary Duty - anything that is discussed in confidence between the seller and the seller's agent must stay between the seller and sellers agent. It is crucial when negotiating on the seller's behalf that the agent working for the seller keeps sensitive information quiet which could adversely affect the selling price. However, this does not include any material defects. The Seller's Agent should promote the interest of the seller with utmost good faith and loyalty. A qualified Seller's Agent will properly advertise your property in the right markets, and should be knowledgeable in the market of which they are working. Land Agents for land, Residential Agents for homes, there is a big difference. This duty goes beyond the time of listing agreement.
Buyer's Agents owe you Fiduciary Duty as well, just in reverse of the seller's agent. The agent is working for the best interest of the client, period. A qualified Buyer's agent should be gathering as much data about property that fits the needs of the buyers they represent. This goes well beyond viewing a MLS sheet. The Buyer's Agent again should be knowledgeable in the market they are working, and again use a Land Agent for land, Residential Agent for a home. Buyer's Agents must keep their conversations and knowledge between buyer and buyers agent confidential, and again, this duty goes beyond the time frame of the agreement.
Transaction Brokers-This is the most overused and misunderstood practice among agents today. A transaction broker owes no duty to either party, and can therefore offer no expertise, advise or knowledge to either party. In other words, they represent no one. With that said, would you want to list your property with an agent who cannot offer you advice and who is not working exclusively for you? There are instances that having a Transaction Broker is fine, but most certainly not as a listing agent. Believe it or not, this is becoming more of a “norm”. Agents acting as Transation Brokers are trying to relieve themselves of liability, but most certainly not looking out for the seller’s best interest.
Trust Departments also owe their clients Fiduciary Duty, no matter who their board members are, who the board members property adjoins, or who the board members are friends with. The trustee is supposed to be just that, a trustee. Trustees are to hold their duty to their clients regardless of other relationships, whether personal or professional. Unfortunately, we often see deals executed within trust departments that are not in their client’s best interest, yet they worked very well for one of the board members with land that adjoins it. Sadly, this is more common than most people think.
Let’s go one step further with Trust Departments and Farm Management Departments set up within a bank. These Trustees or Farm Managers certainly owe you Fiduciary Duty. They are supposed to be looking after your interest, right? After all, it is your land. With that said, these individuals should be up to speed on cash rental rates, crop shares, values of the land, should these trustees be renting ground from the people they represent? If the trustees are renting, should they get it cheaper than the open market will bear? Should the trustee be able to buy the land without putting on the open market? How many ways can you say, "NO"? This is not only highly unethical, it crosses the line to fraud. This is unfortunate, but the above situations listed above happen each and every day out of trust departments and farm management firms. We do not want to discourage you from using such resources, but please be diligent investigating such services before you sign. Know the facts, after all, it is your land.
We hope this bit of data helps you better understand what is due to you the seller-land owner. Results Realty, LLC's agents take Fiduciary Duty very seriously. It is at the very core of what Agents and Trustees are educated and sworn to provide you, the client.
