One of the most basic components of being a good Realtor is understand just who I work for. As I work with a client I find myself going back to this concept again and again. Let’s face it, a real estate transaction requires a tremendous amount of negotiation. For both the buyer and the seller, the sale is likely one of the largest and most important financial endeavors that they will do. So it has to be done right, and to their satisfaction. What I want has pretty much nothing to do with it.
So think about that. A Realtor is in a job where what they want is not important.
Fiduciary Duty
Fiduciary duty is the relationship that exists when one person puts faith and trust into another person to act on their behalf. Realtors have fiduciary duty to their clients. This is such an important element in real estate.
In a transaction I find myself thinking about my clients and their needs constantly. Will this be good for them? Will this help? Is this what they want? Often it means telling them hard information that I know will likely make them not want a house. It can mean causing a transaction to fail so that we go out and begin again. That is not necessarily good for me, but it is certainly good for my client. It’s the right thing to do.
Real Estate Agency
In Oregon we have buyer’s agents, seller’s agents, and dual agents. This was not always the case. Prior to about 1994, all Realtors worked for the seller. So even when I worked with buyers showing them houses, writing up an offer, and negotiating repairs, I was really working for the seller. It was strange.
The advent of buyer’s agency allowed Realtors to work exclusively for the buyer. This means that the Realtor who is a buyer’s agent is committed to the best interests of the buyer. It also allowed seller’s agents to do the same for the seller.
We also have what is called dual agency. This happens when a Realtor is working with a buyer who wants to buy one of that Realtors listings. In this circumstance, the Realtor would be representing both the buyer and the seller. This can only happen if both the buyer and the seller give their approval. The Fiduciary duty does not change. A dual agent must still maintain confidences about things like price and work to see to the best interests of both clients. This does not happen very often. I think in my 24 years as a Realtor I’ve done it half a dozen times.
Dual agency can also happen when a buyer’s agent sells a house that is listed by another Realtor in their office. This is because most Realtors do work in offices with multiple agents who are supervised by a Principal Broker. That Principal Broker reviews all of the paperwork of every transaction and offers supervision and guidance to the Realtors in that office. So the buyer’s agent and the seller’s agent remain just that, but the Principal Broker becomes a dual agent.
Please forgive me if this is all pretty dry. It’s the sort of thing that is not particularly exciting. But I think it is incredibly important and one of the backbones of my career.
Have a great day and thanks for reading the blotter.
Dianne