This is a critical question to ask yourself before dealing with any realtor in a real estate transaction. Too often, unsuspecting customers engage with realtors assuming that the realtor is working for them and owes them fiduciary duties such as maintaining the customer’s confidential information and working in the customer’s best interest. However, that is not always the case. Understanding what duties a realtor owes you and how to protect yourself is critical to your success!
For example, consider this common scenario. You see a house that looks interesting listed on some popular website and contact a realtor to show you the property. The realtor meets you at the property and you view it together. Then you have a discussion with the realtor about your intentions and motivations for the purchase. At that point, does the realtor have a duty to keep your strategy, intentions, and motivations confidential, or may the realtor share that information with the listing realtor and the seller of the home?
Some may find it surprising to learn that until one becomes a “client” of the realtor, the realtor showing you the property is acting as a “sub-agent” of the listing realtor and has a duty to share your strategy, intentions, and motivations with the seller’s realtor and thereby the seller. You do not become a “client” of the realtor showing you the property until you sign a buyer representation agreement. Until you sign such an agreement, you are merely considered a “customer” under the law and not a “client.” While the realtor has a duty to be honest with customers, they do not have fiduciary duties to customers. Once you sign a buyer representation agreement, however, you become a “client” of the realtor and they become your “agent” and owe you the following duties;
- Confidentiality of sensitive information such as bargaining strategies,
- Promotion of your best interests,
- Advice and counsel, and
- Assistance in negotiations.
Having a complete understanding of the role the realtor is playing in your transaction is of the utmost importance. Thankfully, Vermont requires legal disclosures designed to alert customers to this issue, but like any legal document, it is not always read, or even if read, fully understood.
I am confident of my abilities to help guide you through the intricacies and nuances of your next real estate transaction. I look forward to working with you.