We've all heard of "fiduciary duty", but what is it actually?
There's a famous, and very clever, acronym that is used by Realtors to memorize our fiduciary responsibilities – “OLD CAR”. This reliable “old car” is designed to keep the Realtor on the right path and drive away the clients from many issues by maintaining these qualities:
O – Obedience
L – Loyalty
D – Disclosure
C – Confidentiality
A – Accountability
R – Reasonable care
Pretty serious commitment, don’t you think? Note that these obligations apply solely to the agent. The client doesn’t have any other obligation other than the payment of commission, if it’s included in the written contract. Unbalanced? Maybe. But is it really unfair?
The word Fiduciary is defined by the Oxford Dictionary as: “involving trust, especially with regard to the relationship between a trustee and a beneficiary.”. The fact that Realtors take on this wide range of obligations, builds up genuine human trust between clients and us professionals. What’s more, the fiduciary duty is what makes this profession truly honorable, like many others: lawyers, doctors, and notaries etc.
Even clients, who are unaware of the fiduciary duty, expect it intuitively. Otherwise, no one would discuss their large sums of money, their family matters, or any other person and serious issues! In essence, the maintenance of these duties is the reason why agents reap great financial rewards.
Another imbalance with respect to fiduciary duties is that all the previously listed obligations end the minute that the client-agent relationship is terminated, except for one: confidentiality. So no matter how the relationship ended, good or bad, as agents we are still obligated to keep everything confidential.
Consequentially, we are not allowed to discuss even the most unpleasant details of the client’s behaviour, unless requested by a judge in court. However, the client does not hold the same obligation and has the right to publicize any detail of the relationship anywhere.
This lack of reciprocity of duties is there in order to compensate for the inherent imbalance in the client-agent relationship, because:
Agent – is a professional, armed with in-depth knowledge, technologies and tools.
Client - an untrained member of the public (no matter how well-read).
This is why we must choose one another responsibly and carefully so as not to burden ourselves with unnecessary, unpleasant obligations and cause detriment to both parties. Choose wisely and with an open heart and mind – only then will your agent-client relationship flourish.
Good luck to all of you! Life is good, and my mission - to make it even better one day, step, blog, and one house at a time!