We hear so many realtors talk about Fiduciary Responsibility. In comparison, this word is waved around by many realtors just like the American Flag and how the flag symbolizes the United States. The flag is seen a lot, all over, but do many know it's true meaning? I feel the same about the phrase "fiduciary responsibility" Wikipedia says this :
A fiduciary duty is a legal or ethical relationship of confidence or trust regarding the management of money or property between two or more parties, most commonly a fiduciary and a principal.
The realtors fiduciary responsibilities are described as fiduciary duties of a realtor. If we take this one step further, to define these duties for realtors, NAR states this :
- Reasonable care & Diligence
The fiduciary responsibilites mentioned above which NAR set forth are decribed in detail in these two artciles.
How could I sum up the duties of a realtor? A realtor should be acting in the Buyer's or seller's best interests. Can we agree on this? But my concern is that some realtors take this to far at times. What do I mean by this? That they should give advice when it comes to mortgages and or title. There will be some that will argue with me on this topic. My question, how far does one take it. How about the realtor that does both real estate and mortgages at the same time. How does their fiduciary responsibility take place? Real ramifications to realtors giving mortgage advice to their buyers. Or what about that realtor that becomes a dual agent and tells both sides that they are working for the best deal for them. How can this be? I wrote about dual agency and there were many interesting topics. Are you a dual agent and do you properly disclose.
Let's look at loan officers. Are they held by any code of ethics and or a fiduciary responsibility to their clients? Not on paper, it's just implied. Sure, one could push the envelope regarding the new licensing laws for loan officers. But in reality, all a loan officer has to say is, "I am giving you the best mortgage deal or the best mortgage program." How does the borrower know this? It comes down to trust. But does a loan officer properly review the borrowers goals and financials and give the proper advice? I don't think so. Let's take this one step further.
On paper, the borrower is approved with little money down and no reserves. Shouldn't we as loan officers properly prepare these borrrowers, giving them good insight on what they need to think about when it comes to cash reserves? I just wrote these three posts that I think sums it up for any and all buyers.
Summary : Do we fling words and or phrases around that just sound pretty, might have some good meaning, yet we don't follow what we preach and or use? In my opinion, I think so. We all want to believe that everyone in real estate and mortgages are ethical and upstanding, that they look out for the consumers best interest, but we know this is not true with everyone. And I just like putting this out there for consumers to think hard about this kind of stuff. Buyer beware of the warm fuzzy phrases.
I guess my main point is that how many just throw around the phrase, "fiduciary responsibility or duties" to their respective clients, defining what this term means, making them think that they are working with the best realtor. It would be like me saying to you, "I am extremely honest"... Shouldn't I be this already? Why must I sell this? Just foor for thought.
~ As realtors, how do you view this topic? ~
Wrote about this a few years ago... with some excelletn comments.
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