Twila E. Palmer's Blog
If you are a buyer or a seller in a real estate transaction and represented by an agent, that agent owes you fiduciary duties or loyalty. Often times agency is contracted (also known as express agency) but other times it can be implied. In any case, there is an acronym to remember those duties: OLD CAR. They are: Obedience: The agent must obey their client's instructions. As long as their instructions are not illegal and are in accordance with the contract. Loyalty: The agent must be loyal to their client and keep their best interests ahead of those of any other party. Commission, how it is disbursed, competing offer situations, and anything having to do with the sale must be disclosed. Disclosure: Disclosure laws in many states require a real estate agent, whether in an "agency" capacity or not, to disclose material facts to their client. Material facts are those that, if known by the buyer or seller, might cause them to change their purchase or sale actions. Confidentiality: Confidentiality means that the agent does not disclose anything about you as the client (your business, financial or personal affairs or motivations) unless expressly directed by the client. This duty survives closing and lasts forever. Only a court instruction to disclose can relieve the agent of this duty. Accounting: The agent is to promptly report to the principal all money and property received and paid out. Accounting for all documents and funds in the transaction is a fiduciary duty. Reasonable Care: The agent is required to have a certain level of knowledge and protect the principal from foreseeable risks of harm. If it's not something the agent is expected to know, they should recommend that the principal obtain expert advice or assistance when the principal's needs are outside the scope of the agent's expertise.