paulaarnett.com - My Pledge To You

My Pledge To You

In addition to my fiduciary responsibilities, I will:

Provide a marketing strategy, a competitive market analysis and recommend an appropriate list price range for the sale of your property.
Market your property to buyers and other agents utilizing all possible, appropriate methods.
Make recommendations to staging, potential repairs and cleaning your property in order to make your home more attractive to buyers.
Suggest quality professionals, including attorneys, handymen, stagers and inspectors.
Guide you in making informed decisions leading to a satisfactory sale.
Present and respond to all offers in a timely manner.
Negotiate the best price and terms possible, always keeping your specific needs in mind.
Return all calls and emails promptly.
Receive and deliver all documents in a timely manner.

Fiduciary Responsibility

In November, 1986, the National Association of Realtors® published a booklet titled: "Who Is My Client? - A Realtors® Guide to Compliance with the Law of Agency". The booklet describes fiduciary duties in Section IV. DUTIES OWED BY AN AGENT TO HIS PRINCIPAL: "A real estate broker who becomes an agent of a seller or buyer, either intentionally through the execution of a written agreement, or unintentionally by a course of conduct, will be deemed to be a fiduciary. Fiduciary duties are the highest duties known to the law. Classic examples of fiduciaries are trustees, executors, and guardians. As a fiduciary, a real estate broker will be held under the law to owe certain specific duties to his principal, in addition to any duties or obligations set forth in a listing agreement or other contract of employment (such as a buyer agency agreement)."

As your agent, I have a fiduciary obligation to you at all times. The duties include:

Obedience - "An agent is obligated to obey promptly and efficiently all lawful instructions of his principal."

Loyalty - "A duty of loyalty is one of the most fundamental fiduciary duties owed by an agent to his principal. This duty obligates a real estate broker to act at all times solely in the best interests of his principal to the exclusion of all other interests, including the broker's own self-interest. A corollary of this duty of loyalty is a duty to avoid steadfastly any conflicts of interest that might compromise or dilute the broker's undivided loyalty to his principal's interests."

Disclosure - "An agent is obligated to disclose to his principal all relevant and material information that the agent knows and that pertains to the scope of the agency."

Confidentiality- "An agent is obligated to safeguard his principal's confidence and secrets. A real estate broker, therefore, must keep confidential any information that might weaken his principal's bargaining position if it were revealed. This duty of confidentiality precludes a broker representing a seller from disclosing to a buyer that the seller can, or must, sell his property below the listed price. Conversely, a broker representing a buyer is prohibited from disclosing to a seller that the buyer can, or will, pay more for a property than has been offered."

Accounting - "An agent is obligated to account for all money or property belonging to his principal that is entrusted to him. This duty compels a real estate broker to safeguard any money, deeds, or other documents entrusted to him that relate to his client's transactions or affairs."

Reasonable care and diligence - "An agent is obligated to use reasonable care and diligence in pursuing the principal's affairs. The standard of care expected of a real estate broker representing a seller or buyer is that of a competent real estate professional. By reason of his license, a real estate broker is deemed to have skill and expertise in real estate matters superior to that of the average person. As an agent representing others in their real estate dealings, a broker or salesperson is under a duty to use his superior skill and knowledge while pursuing his principal's affairs. This duly includes an obligation to affirmatively discover facts relating to his principal's affairs that a reasonable and prudent real estate broker would be expected to investigate."

Client Representation: Agency

As of January 1, 1995, in Illinois, the real estate agent who serves you in a real estate transaction, whether you are the buyer or seller, must represent only your interest-unless you agree in writing to a different relationship. The agent's obligations are to:

Perform the terms of the brokerage agreement.
Seek a transaction at the price and terms stated in the brokerage agreement or a price and terms acceptable to the client.
Disclose all material facts concerning the transaction to the client, unless that information is confidential.
Expeditiously account for all money and property received in which the client has, may have, or should have had an interest.
Obey specific directions of the client that are not otherwise contrary to the application statues, ordinances, or rules.
Act in a manner consistent with promotion of the client's best interests above all others.
Exercise reasonable care and skill in the performance of brokerage services.
Maintain client confidentiality at all times
Comply with all other laws and regulations including, but not limited to, fair housing and civil rights statutes.

When an agent represents both the buyer and the seller, it is called "dual agency." The relations must be disclosed and written consent received from both sides. Because it is impossible to serve two masters, I do not practice dual agency.

Undisclosed Dual Agency

Section VI describes undisclosed dual agency as a breach of an agent's duty of loyalty.

"An agent's duly of loyalty compels him to refuse to accept any employment that would require him to act contrary to, or in competition with, the interests of his principal. Buyers and sellers of real estate are deemed by law to "compete" with one another and to have "adverse" interests. Accordingly, a real estate broker who acts as an agent for both a buyer and a seller in the same real estate transaction is a dual agent. A real estate broker who acts for both the buyer and the seller and does not clearly disclose his status to both parties and receive their informed consent to the arrangement is an undisclosed dual agent. Undisclosed dual agency is universally considered to be a breach of an agent's duty of loyalty to his principal. It is also considered to be an act of fraud and is a violation of the real estate license law of many states."

"Although disclosed dual agency relationships are technically lawful, there are compelling reasons real estate brokers should avoid creating them (and buyers and sellers should avoid consenting to them). Courts are very strict concerning the degree of disclosure necessary to make a real estate broker's dual agency lawful. For example, a lawful dual agent must explain carefully to both the buyer and the seller that he is also acting as a fiduciary for the other party and owes both of them the full range of fiduciary duties (with the exception of loyalty and full disclosure). The real estate broker must also ensure that both the buyer and the seller understand that by consenting to the dual agency arrangement, they each are forfeiting their right to receive their agent's undivided loyalty."

"Without this comprehensive disclosure and each principal's informed, and preferably written, consent, the dual agency will still be deemed undisclosed and therefore unlawful. Dual agency is a totally inappropriate agency relationship for real estate brokers to create as a matter of general business practice. Undisclosed dual agency is a clear breach of a broker's fiduciary duty to each of his principals and is generally viewed to be an act of fraud. The disclosures and consents necessary to make a dual agency lawful are so comprehensive and specific that a typical real estate broker cannot undertake them as a matter of routine."

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