Your real estate agent has a fiduciary responsibility to you, their client, which means they must act in your best interest during the transaction. They have certain responsibilities that they should adhere to when aiding you in the process of selling your home.
That means that your real estate agent must:
- Be loyal to your interests outside of their own.
- Keep confidential any information that could weaken your bargaining position.
- Disclose all pertinent transaction-related information to you (including showing you every offer that is placed in your home).
- Honor your requests (provided they aren’t illegal).
- Safeguard all money, documents and other personal property you entrust to them, accounting for any money spent on your behalf.
- Act with a reasonable level of care and diligence throughout the transaction.
Your agent’s fiduciary responsibility extends only as far as what is lawful and necessary to sell your home. So don’t ask them to pet sit your dog while you clean your house or drop your kids off at school. And definitely don’t ask them to lie or misrepresent information about your property, as that will have them breaking another set of laws.
What Does Breaking the Fiduciary Obligation Entail?
Your real estate agent will have broken their fiduciary obligation if they didn’t present every offer they received for your home — especially if any of the offers were higher than the price you accepted. Another example is: your agent recommends a general contractor whose work product is shoddy, but gives them a kickback every time they refer a client. Or they could simply sell your house to their sister and not tell you.
These are only a few examples of the hundreds of ways your agent could break their fiduciary obligation to you as their client. So if you think you have been wronged, contact your state’s department of real estate for legal matters and then your state’s association of Realtors or the National Association of Realtors (NAR). Then call a lawyer.
What Recourse Do You Have?
Rescission. If your agent conspired to sell your home at a lower price than you could have otherwise sold it for, you can sue to have the contract nullified. This would refund the money to the buyer and put the home back in your possession.
Forfeiture of Commission. Returning their commission to the home seller is a remedy for when an agent breaks their fiduciary duty.
Damages. If you suffered monetary loss as a result of your agent’s conduct (e.g. they sell your home at a lower price than you could have otherwise sold it for), then you could be awarded damages as a result.
To protect yourself from the pain and aggravation of filing a complaint and seeking recourse, stay on top of the process. Ask your real estate agent questions if you’re not clear about something. Hire a lawyer to look over any contracts. This is likely your biggest investment and you want to avoid any costly mistakes.
If you were misled or defrauded by your real estate agent, it was likely an upsetting experience. Luckily there are laws protecting you and recourse you can pursue. And at the end of the day, real estate is a local business so sometimes the worst punishment you can dole out is warning the people you know not to work with this agent.
