When buying or selling a home, the list of things you need to think about often seems overwhelming. It’s not just all of the work of preparing your home for the market, but the endless decisions, research, and analysis you need to perform to make your sale successful. If you haven’t bought or sold a home for some time, it can be challenging to create a workable plan.
The pressure may be on, but partnering with the right Realtor® can alleviate much of the stress by attending to most (or even all) of the items on your to-do list. With so many details and moving pieces involved, it’s easy to argue that choosing the right expert is the most essential part of your transaction.
But how do you know if your local expert truly has your best interests at heart? In this post, we’ll discuss how fiduciary duty works in real estate.
Fiduciary Duty in the Dictionary
As soon as you sign an agreement to work, both the real estate agent and their brokerage have a fiduciary duty towards you. What does this mean? The dictionary definition of “fiduciary” is “relating to the relationship of trust and good faith between a fiduciary and the person for whom the fiduciary acts.”
In plain English, your Realtor® must represent your best interests at all times–not just if they like you, and not only if they stand to earn a lot of money from your transaction. They are obligated to put their own needs and wishes aside to focus on your success. Serving your interests isn’t just good business practice or the right thing to do; it is required by law.
How Fiduciary Duty Translates to Real Estate
In an industry with many unknowns, knowing that you are protected under the laws of fiduciary duty can be reassuring.
- Your real estate agent must be loyal to you first and foremost, doing everything in their power to help you achieve your stated goals.
- In addition, they must safeguard your financial and emotional well-being and protect your privacy by keeping your sensitive information confidential.
Most laypeople do not understand the intricacies of the market and rely extensively on the advice their agents provide. As a professional in a position of authority and expertise, your Realtor® cannot breach that trust or take advantage of what you don’t know about the market.
For example, they can’t advise you to accept an offer or overpay for a home just because they want to get the transaction over with. This does not represent your financial interests and is not just unethical and abusive, but illegal.
Fiduciary Duty When Selling a Home
When selling, an agent must do what they can to help homeowners make the most money and with terms that are in keeping with your goals. This means providing accurate advice on how to prepare, price, and present your home appropriately for the market.
- An example of a breach would be telling you that your home is worth more than it is so that you’ll sign a listing agreement.
- Exceeding fiduciary duty means that your real estate expert doesn’t just give you advice but actually steps in to help you with every task. For example, if a coat of paint will add perceived value, they will make the arrangements, and it’s usually included in the commission.
When you find an agent that goes above and beyond their legal duty, it doesn’t make sense to sell without this expertise.
Thinking of selling your home in Etobicoke? The posts below can help get you moving in the right direction:
- What Home Features Offer The Highest ReSale Value In Etobicoke?
- Can You Earn More Money By Staging Your Home?
- Why Working with a Local Etobicoke Realtor® is More Critical than Ever
Fiduciary Duty When Buying a Home
Buying is difficult enough, especially in this unprecedented market. The high prices of housing today and the magnitude of the commitment make your purchase a sobering experience.
The listing agent can tell you about the property and neighbourhood. However, remember that they are duty-bound to help the seller get the best possible deal. If you want to hold your own, it makes sense to work with a buyer agent who will negotiate on your behalf.
Fiduciary duty on the buyer side means helping you obtain the right home without known defects (unless you’re intentionally buying a fixer-upper) while negotiating a fair price within your budget.
- An example of a breach means they try to persuade you to buy something unsuitable or show you homes outside of your budget range in the hopes that you will spend more.
- Going above and beyond means scouring their list of contacts and networking extensively to present more options for you, going to bat for you even during the toughest market.
When contracting an agent to help you find and purchase a home, it helps to remember that buyers rarely pay out of pocket for these services. The seller generally pays the commission once the transaction closes, which is then split between the listing and buying agents.
In other words, you benefit from a real estate agent’s in-depth market insights, network connections, and negotiation expertise at no cost. There is no reason to go it alone when searching for your next house.
Buying a house may be more challenging than ever, but there are still opportunities out there. The resources below will help you be ready for them:
- Don’t Make These Mistakes When Buying A Home In Etobicoke
- What Compromises to Make When Buying A Home
- How To Make Your Home Purchase More Affordable
Experience and Expertise are Essential
Your real estate team being under fiduciary duty is one thing. They may care deeply about you and have your best interests in mind. All of this is an excellent start, but expertise and experience also matter.
The Toronto real estate market can change on a dime, and you want someone who knows how to handle any situation successfully. A Realtor® with the combination of knowledge, skill, compassion, and a high degree of ethics will help you meet and exceed your goals no matter what happens in the market.
Do you want to talk more about Etobicoke real estate? We have been helping local residents for over 30 years and would love to help you too. Reach out today to 647-282-7653 or contact@thompsonsells.com with any questions or to get started.
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