Imagine this: You were just offered the job of your dreams! The only catch: you must relocate to a different state within the month.
First things first – you need to sell your current home, and fast! You need the proceeds of the sale for a down payment on any new place you find out of state. So, you hire a Listing Agent.
Now, imagine the Listing Agent tells potential buyers you are desperate to sell; that you must sell this home and sell it quickly. Imagine they let people know that you have expressed a willingness to accept a lower price than the listing price. What impact will that have on your ability to negotiate? How many buyers will low ball an offer now? How likely are you to lose money on the sale of this home?
Don’t you wish the Listing Agent had kept that information to themselves? Legally they should have kept that information confidential as that agent had a fiduciary duty to their client.
Are you asking, “fiduciary huh”? Fiduciary by itself means “faithful servant,” and a fiduciary duty is a legal obligation; it means an agent must promise to act in the client’s best interests at all times. The duties that are required in a fiduciary relationship will vary from state to state, but all require confidentiality.
“Keep confidential any information that might weaken his principal’s bargaining position if it were revealed. This duty of confidentiality precludes a broker representing a seller from disclosing to a buyer that the seller can, or must, sell his property. Conversely, a broker representing a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more for a property than has been offered.”
One of the most common questions a prospective buyer asks me when we tour homes for sale is, “why is the owner selling?” I’ve actually read on a top Listing Agent’s blog that asking about the seller’s motivation could put you in a stronger negotiating position. I certainly would be wary of listing with that agent; if they disclose the reason you need to sell, not only they would be in breach of their fiduciary duty, they may cause you to lose money.
I can not imagine telling a prospective Buyer’s Agent that my client was desperate to sell, or that they were going through a divorce, or any reason they decided to sell. My response is always something like this, “They decided to sell, it’s a wonderful house, write a strong offer and it could be yours.”
Additionally, we are in a seller’s market with multiple offers for most homes, so having information on the seller’s motivation probably won’t make a difference. What I really want to find out is what does the seller want to see in an offer that would make them choose my client’s offer over all others. Do they need to stay in the home for a small time after settlement, do they need help paying their portion of the sales taxes, what is the most important factor they will be considering when comparing offers?
Bottom line, it is critical that you hire a real estate agent you can trust. Hire someone who is not only aware of but upholds their fiduciary duties. I pride myself on upholding these duties, so call me or click here if you’re ready to realize your real estate goals.
-Arynne
PS: Here’s a list of the fiduciary duties that an agent owes her client:
Accounting: The agent must account for all funds entrusted to her and not commingle (combine) client/customer funds with her personal and/or business funds.
Care: The agent must use all her skills to the best of her ability on behalf of the client.
Confidentiality: The agent must keep confidential any information given to her by her client, especially information that may be damaging to the client in a negotiation.
Disclosure: The agent must disclose to the client any information she receives that may benefit the client’s position in a negotiation.
Loyalty: The agent owes undivided loyalty to the client and puts the client’s interests above her own.
Obedience: The agent must obey all lawful orders that the client gives her. Conversely, the agent is not bound by any unlawful requests made by the client. For example, an agent must follow FHA guidelines (no discrimination, remember?).
