The following explanation of the duties an agent owes will help explain what you are giving up if you don't have an Exclusive Buyers' Agent protecting your best interests at all times.

A real estate agent is considered to be a fiduciary. Some other examples of fiduciaries are trustees, executors, and guardians.  (People who protect other people.)

As a fiduciary, a real estate broker is held by law to owe specific duties to his/her principal (their client - the person who they are representing), in addition to the duties or obligations set forth in a listing agreement, buyer representation agreement, or other contract of employment. Subagents of the broker also owe the same fiduciary duties to the broker's principal.   (Subagents would be all of the agents who work for the same company.) 

It is definitely to your advantage to be working with an agent who always owes these duties to you.

Real Estate Practice Act (REPA)

These specific fiduciary duties include: Loyalty, Obedience, Disclosure, Confidentiality,  Reasonable care and diligence, and Accounting .

Loyalty
One of the most fundamental fiduciary duties an agent owes to the principal. The duty obligates a real estate broker to act at all times, solely in the best interests of the principal, excluding all other interests, including that of the broker.

An example of breach of loyalty is when a broker purchases a property listed with his/her firm, and immediately resells it at a profit. Such conduct is usually considered appropriate and lawful by persons who act at arms length, but a fiduciary would be considered to have stolen an opportunity for profit that rightfully belongs to the principal.

Sellers Agent

Dual Agent

Exclusive Buyer's Agent

Must do everything possible to gain an advantage for the Seller.

May not do anything to gain advantage for either side over the other.

Must do everything possible to gain an advantage for the Buyer.

Obedience
An agent is obligated to promptly and efficiently obey all lawful instructions of his/her principal. However, the duty does not include an obligation to obey unlawful instructions, such as instructions to not market a property to minorities or to misrepresent the condition of a property. 

If you tell an agent that you only want to look at homes under a particular price point, if the agent is showing you more expensive homes, which could not reasonably be expected to be negotiable down to the price you have stated, then the agent is breaching his or her fiduciary duty to you.   Because we have no homes that we are obligated to try to sell, you can rest assured that we will follow you instructions  as to what you want to see to the best of our ability.

Sellers Agent

Dual Agent

Earth Available Realty Agent

Must obey all lawful instruction of the Seller, is not obligated to obey instructions from the Buyer.

Must obey all lawful instructions of both the Buyer and the Seller, as long as it will not benefit one side over the other.

Must obey all lawful instruction of the Buyer, is not obligated to obey instructions from the Seller.
 

Disclosure
An agent must disclose to the principal all known relevant and material information that pertains to the scope of the agency. The duty includes any facts affecting the value or desirability of the property, as well as any other relevant information pertaining to the transaction, such as the other party's bargaining position, the identity of all potential purchasers, information concerning the ability or willingness of the buyer to offer a higher price, any intent to subdivide or resell the property for a profit.

An agent's duty of disclosure to his/her principal must not be confused with a real estate broker's duty to disclose any know material facts about the property value to non-principals. The duty to disclose known material facts is based on a real estate broker's duty to treat all persons honestly. The duty of honesty does not depend on the existence of an agency relationship.

Sellers Agent

Dual Agent

Earth Available Realty Agent

Must reveal any known material defects in the property. Must NOT reveal information about traffic problems, poor school system, declining property values, etc. since these items might make the property less desirable to Buyers.

Must reveal any known material defects in the property.

Must not reveal any information to the Buyer or the Seller which would be of benefit to them at the expense of the other or would damage the other party.

Must tell Buyer everything they can find out about the Seller including the motivation for selling and any reasons the Seller may have for wanting a quick sale.

Must tell Buyer everything they can find out about the property, including traffic problems, poor school system, high crime rates, etc.
 

Confidentiality
An agent is obligated to safeguard his/her principal's lawful confidences and secrets. Therefore, a real estate broker must keep confidential any information that may weaken a principal's bargaining position. The duty of confidentiality precludes a broker who represents a seller from disclosing to a buyer that the seller can, or must, sell a property below the listed price. Conversely, a broker who represents a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more than what has been offered for a property.

The duty of confidentiality does not include an obligation by a broker who represents a seller to withhold known material facts about the condition of the seller's property from the buyer, or to misrepresent the property's condition. To do so constitutes misrepresentation and imposes liability on both the broker and the seller.

Sellers Agent

Dual Agent

Earth Available Realty Agent

Must tell the Seller everything they can find out about the Buyer, including all financial details they can obtain.

Must conceal anything about the Seller that would help the Buyer gain an advantage, such as impending foreclosure, need to move in a hurry, need to sell to settle divorce, etc.

Must keep all information about both the Buyer and the Seller confidential. 

May not give either party any advice, counsel or negotiating strategies.

Must tell the Buyer everything they can find out about the Seller, including all financial details they can obtain, the Seller's reason for selling, etc.

Must keep all information about the Buyer confidential, including the Buyer's ability or willingness to pay more for the property than they are offering as well as the Buyers motivation for buying.
 

Reasonable care and diligence
An agent is obligated to use reasonable care and diligence when pursuing the principal's affairs. The standard of care expected of a buyer's or seller's real estate broker is that of a competent real estate professional. By reason of his/her license, a broker is considered to have skill and expertise in real estate matters superior to that of the average person.

As an agent who represents others in their real estate dealings, a broker or salesperson is under a duty to use superior skill and knowledge while pursuing the principal's affairs. However, no broker is expected to perform tasks or know information outside the scope of his/her real estate license. Real estate licensees are not expected to perform services normally provided by engineers, lawyers, accountants, or other professionals. If concerns arise outside the scope of a broker's responsibility, the broker should acknowledge that and suggest that the principal seek assistance from a reliable outside source.

Sellers Agent

Dual Agent

Earth Available Realty Agent

Must prepare themselves through education and study to competently represent the Seller in all matters.

Must prepare themselves through education and study to competently represent both the Seller and the Buyer as prescribed by law.

Must prepare themselves through education and study to competently represent the Buyer in all matters.
 

Accounting
An agent is obligated to account for all money or property that belongs to his/her principal entrusted to that agent. The duty compels a real estate broker to safeguard any money, deeds, or other documents entrusted to them relative to their client's transactions of affairs.

Sellers Agent

Dual Agent

Earth Available Realty Agent

Must account to Seller for any money or documents entrusted to them.

Must account to Seller and Buyer for any money or documents entrusted to them.

Must account to Buyer for any money or documents entrusted to them.
 

Whether a principal is a buyer or a seller, their agent always owes that person the above six fiduciary duties. These duties are inherent in all agency relationships and enforced by all courts of law in the United States.

A Dual Agent must not do anything for the Buyer which is a benefit to him/her at the expense of the Seller. A Dual Agent also must not do anything for the Seller which is a benefit to him/her at the expense of the Buyer . Yet Dual Agents generally charge the same commission to both the Buyer and the Seller as if they had been able to represent their interests exclusively.  Both the Buyer and the Seller receive much less representation with no less expense.
   


Earth Available Realty, Inc.
Suite 101, 300-A Outlet Point Blvd • Columbia, SC  29210
Work: (803) 731-0989 • Fax: (803) 731-0982
Hugh Ryall: Hugh@EarthAvailable.com • Carol Ryall: Carol@EarthAvailable.com
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