If you’re thinking of buying a house, it’s easy to assume the real estate agent or agency you’re working with has your best interests at heart. Whether you’re buying or selling, it’s hard to imagine that these entities would only think of themselves, right?
Recently, Consumer Federation of America (CFA) posed a national survey question to a group of adults who were asked whether or not they assume realty agents are required to represent the best interests of the home buyer or seller with whom they are working. Around 50 percent answered yes, and 16 percent said, “yes, almost always.” Leaving two-thirds of consumers in the survey with roughly the same impression.
A new report from CFA found that in fact, “real estate agents often are not required by law to represent the interests of buyers or sellers.” Meaning that clients of these agents can fall prey to poor transactions or self-dealing, as real estate agents are not legally obligated with a fiduciary duty to their clients.
The author of the report and immediate past executive director of CFA, Stephen Brobeck, says the vast majority of consumers don’t understand the varying types of representation by realty agents. He says the key question they need to ask before agreeing to work with any agent is: Will you be representing us exclusively throughout the transaction and have a fiduciary duty to us?
“The holy grail is to capture the entire commission,” says Brobeck. “The listing agent might say to the seller, we’ve got a hot buyer for your house.”
Common forms of representation examined in the CFA study:
- Single agent: The agent works solely for the client and has a fiduciary responsibility to the client.
- Subagent: The agent works with the buyer but has a fiduciary duty to the seller.
- Transactional agent: The agent works with both the buyer and seller to facilitate a sale but has no fiduciary responsibility to either party.
- Dual agency: An arrangement whereby “the agent somehow is expected to represent the interests of both the seller and the buyer in a home purchase.”
Breach of Fiduciary Duty Attorneys
The attorneys at Feldman & Feldman handle allegations of breach of fiduciary duty very carefully. We understand these claims often involve delicate situations, so we work efficiently to protect your interests while exploring all options for resolution. If you have been accused of breaching your fiduciary duty or if you believe your fiduciary’s actions constitute a breach, contact us today to schedule a consultation.