Fiduciary duty in real estate is a legal and ethical obligation requiring your agent or broker to put your interests above their own. It means they must act with loyalty, confidentiality, full disclosure, obedience, reasonable care and proper accounting throughout the transaction.
Whether you’re buying your first home, selling an investment property or diversifying your portfolio, fiduciary duty safeguards your financial and legal position. It ensures your agent discloses material facts, negotiates aggressively on your behalf and handles your confidential information with care.
Loyalty means your agent can’t steer you toward properties that yield them a higher commission or benefit family and friends. Their sole focus must be your objectives and negotiating the best possible terms on your behalf.
Confidentiality requires your agent to safeguard sensitive data—like your maximum budget, relocation timelines or motivation to sell—and never share it without your permission.
Full disclosure obligates your agent to share every material fact about the property or deal, from hidden defects to competing offers, so you can make informed decisions.
This duty demands your agent research comparable sales, analyze market conditions, verify zoning and inspection reports, and avoid misrepresentation. They must exercise professional competence at every step.
Obedience means your agent must follow your lawful directions—even if they disagree—such as refusing offers below a set price or delaying listing until repairs are complete.
A fiduciary relationship creates a heightened level of care and loyalty, backed by state laws and licensing boards. A transaction broker, by contrast, offers limited representation—passing along information neutrally without owing full fiduciary duties.
In dual agency, one agent represents buyer and seller. Many states restrict or prohibit dual roles because it’s difficult to maintain full loyalty and confidentiality to both parties simultaneously.
With fiduciary duty, you know that every step—inspections, offers and counteroffers—is handled transparently and with your best interest in mind.
A fiduciary agent leverages market data, buyer psychology and seller motivations to negotiate better prices, repairs or closing terms than a non-fiduciary middleman could.
Your fiduciary must disclose any potential conflicts—like personal relationships with other parties—and either resolve or avoid them to protect your leverage and legal rights.
Keep all correspondence, contracts, inspection reports and receipts. Note dates, times and specifics of conversations where you suspect a breach.
You can file a complaint with your state real estate commission, seek mediation or pursue a breach of fiduciary duty lawsuit. Remedies may include rescinding the contract, monetary damages or disciplinary action against the agent.
Your agent owes you loyalty, confidentiality, disclosure, obedience, reasonable care and accounting of all funds and transactions.
Depending on state rules, dual agency or limited dual agency may be allowed with informed written consent from all parties.
Fiduciary agents owe full legal duties; transaction brokers provide neutral facilitation without the same level of loyalty or disclosure.
Ask for a written agency agreement detailing their role. Check state licensing board guidelines to confirm they’re acting as your fiduciary.
Document the issue, request a meeting to address concerns, and if unresolved, file a complaint with your state regulator or consult a real estate attorney.
Jane is buying her first home. Agent A offers full fiduciary representation; Agent B acts as a transaction broker. Both show her similar properties in her price range.
Agent A asks about Jane’s maximum budget, keeps it confidential and negotiates below listing price after uncovering a minor roof issue. Agent B broadcasts her budget to sellers, pushing higher offers for a quick sale.
Thanks to full disclosure and loyalty, Agent A secured a $10,000 credit for roof repairs and a lower purchase price. Jane closes without stress, confident her agent protected her interests throughout the process.
