Cool word, that fiduciary is. You have seen this tossed around lately in the financial advisor industry. So what is ‘fi-DOO-she-ary’ and why is the Realtor talking about it?
A fiduciary is a person that acts in the best interest of another party. The client is entitled to the best efforts of the fiduciary on his/her behalf and the fiduciary must exercise all of the skill, care and diligence at his/her disposal when acting on behalf of the client. Examples are a Trustee for a trust, an attorney for their client, and certain financial advisors. The real estate industry dealt with this topic years ago. Missouri law allows real estate agents (Realtors are agents that are held to a higher ethical standard) to operate with or without fiduciary duties to buyers and sellers. The vast majority of us in the business DO sign up our clients in a fiduciary capacity in order to give them the highest representation and best service possible. Otherwise, we are limited on how well we can do our job. Imagine negotiating for a buyer or seller if you don’t represent their best interest. Or helping them set the price on their home. Would they recommend a full slate of building inspections? There are so many nuances, situations and issues in the home sale process that the client benefits greatly by having a Realtor working on their behalf, and would be severely handicapped if not.
Next time you buy or sell, pay attention to the form that states the Realtor is working on your behalf, commonly called a Listing Agreement for the seller, and Buyer Agency or Representation Agreement for the buyer. If you do not sign a form like this, the Realtor may not be acting in your best interest. This may happen if you, as a buyer, go straight to the listing agent or builder to make an offer on the home. They will either not represent you at all, or be a Dual Agent, where they are acting as fiduciaries for both parties in the transaction. Both sides must give written consent as the Realtor’s abilities are diminished, although still a safe way to buy/sell a home with a trusted Realtor involved as their obligation remains to act not in their own best interest.
So go ahead, fiduciary away! Contact me and let’s get you moving with the benefit of my 26 years worth of representational experience.
Gary Hoeferkamp, Broker - Owner of Hoeferkamp Real Estate 