Fiduciary

Come on, now.  Don't tune me out for using big words!  A fiduciary, that's what I am.  Yup.  And I was a fiduciary for a few years before I realized how important and serious a role it is.  So, here's my plunge into agency.  Brace yourself!

A fiduciary is someone chosen by a "principal" to do business on their behalf with a third party.  In the real estate world, the fiduciary is the real estate brokerage and its agents that you (the principal) hire to act on your behalf to sell your home to a buyer (third party) or to find a home for you to purchase from a seller (third party).   The fiduciary or agent acts in your best interests to negotiate the best terms and price for you.  The key words are "on your behalf".  That means the real estate agent you hire has to keep your best interests in mind (not their own) at all times in the transaction.  A good agent works very hard to remember this.

Fiduciary is a legally defined role.  That is why states license real estate agents.  As I've said before, they are very different from salespeople.  A real estate agent is required by law to give the following duties to their clients:

• Loyalty - act only in the clients' best interest
• Obedience - carry out the clients' lawful instructions
• Disclosure - tell the client everything the agent knows about the physical condition of the property or other material facts that would impact the client's use and enjoyment of the property
• Confidentiality - "mum's the word" when it comes to telling anything personal about the client including how much you can afford to spend, where you work, your marital status, etc., unless the agent has permission in writing
• Reasonable Care - perform the fiduciary duties carefully and thoughtfully for the client's advantage
• Accounting - Keep a paper trail of any money or property received from the client

Books have been written on fiduciary duties and agency, and agents argue extensively about agency.  I'm not going to go on and on in this post, but there's more to come in the future.  Be forewarned!  I've gotten on my soap box and I'm not likely to come down so soon!

Comments

[Maureen McCabe]

April 1, 2006 - Drat... foiled

I thought I was writing with an accent and would be incognito.

I use the word "fiduciary" as necessary with a client and probably blush when I say it. We have a wonderful brokerage "book" we use with consumers that has all the paperwork required by the government, etc. in a real estate transaction. I say "fiduciary." during the first part of the book dealing with agency. The book is called a "GARP." It is all so guttural sounding!

I am glad to hear it is just not me that can not sign in.

Maureen

P.S. I wrote the comment here using Sgt. Schultz accent from Hogan's Heroes because "guttural" "GARP" and "fiduciary" all sound so good with his accent. The first comment was in Hyacinth Bouquet's (PBS Keeping Up Appearance's) accent. The next anonymous comment on an RT blog will be in Iggy's accent.... Gene's blog? Greg D's? Chris's? NOTE: No offense meant to Iggy, Americans, Aliens, Permanent Residents, Hogan's Heroes, etc. Anonymous can be fun...

[Bonnie Erickson]

April 1, 2006
Maureen,

I'll bet that's you. It's not just my blog that won't let you sign in. They're all not working. Yes, I thought the same thing about the word. However, I make my clients suffer like I did my kids . . . teach them the proper terms. Imagine the doctor's surprise when he used the local slang to describe a body part and my kids corrected him! They didn't consider the terms weird because we used them, thereby making them common!

[Maureen McCabe]

April 1, 2006 - the word sounds so nasty....

Your blog won't let me sign in.

I thought 'fiduciary' was a funny word when I learned it long ago when I got my RE license. I don't remember hearing the word before real estate school, never in college or working in two businesses. I understand perfectly what it means after years in the real estate business but I seldom use the word.

When I hear (or actually read) the word "fiduciary" on Real Talk from the people who use it the most it sounds positively dirty. Maybe because they don't say "fiduciary duty", "fiduciary responsibility." They just say "fiduciary" and it sounds like a word in a medical book. A word you discovered as an adolescent.... and throw into conversation to get attention. Maybe because the crusty old men who use "fiduciary" most on RealTalk are trying to shame others on Real Talk... "fiduciary" sounds like a naughty word to me ;-)

Guess who? Really it would not let me sign in.