| “ | A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. [1] | ” |
-Wikipedia
Buyer’s/Seller’s Agent or Transaction Broker?
To help you navigate the complicated path of buying or selling a home, you need an experienced and educated agent. With the numerous laws protecting buyers and threatening sellers, now more than ever you should have an advocate on your side.
In Colorado, you can have a “transaction broker” or an “agent”. In almost every real estate transaction, I recommend that you use a buyer’s agent (if you’re the buyer) or a seller’s agent (if you’re the seller). The difference between a transaction broker and an agent can best be explained with a sports analogy.
- A transaction broker is similar to a referee. The duties of a referee are to ensure the game is played fair and NOT advocate for any particular team or party.
- An agent is similar to a coach or manager. An agent is looking out for your best interests and works in your favor to your advantage; your agent’s goal is to win the game while playing within the rules in an honest manner.
A transaction broker helping you to buy a house should treat all parties (buyer AND seller) fairly, honestly and disclose all known relevant information to all parties of the real estate transaction. This can hurt or help you depending on which side of the transaction you are sitting (buyer or seller). The transaction broker does NOT have a FIDUCIARY duty to you (i.e. will not advocate for you …. will not seek a better price or better terms).
A buyer’s (or seller’s) agent helping you to buy (or sell) a house should treat all parties fairly, honestly and disclose ONLY permitted information to the other party (the seller or the seller’s agent or the transaction broker). Your agent should do what you ask (within the Law) and guide you through the entire process while always looking out for your best interests. Your agent HAS a FIDUCIARY duty (dictated by Colorado Law) to you DURING AND AFTER the transaction is complete. If your agent KNOWS that the seller may be open to accepting a lower offer, then your agent should inform you and make appropriate recommendations that favor you.
For these reason, I encourage and recommend that you hire a Realtor that CAN and WILL operate as your BUYER’S AGENT to help you in your home purchase (and as a SELLER’s AGENT when selling). Whenever possible, I will operate as YOUR BUYER’s (or SELLER’s) AGENT!
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A fiduciary duty[1]is the highest standard of care at either equity or law. A fiduciary (abbreviation fid ) is expected to be extremely loyal to the person to whom he owes the duty (the “principal “): he must not put his personal interests before the duty, and must not profit from his position as a fiduciary, unless the principal consents. The word itself comes originally from the Latin fides , meaning faith, and fiducia , trust.
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[1] Breach of Fiduciary Duty Law & Legal Definition. Legal Definitions Legal Terms Dictionary. (http://definitions.uslegal.com/b/breach-of-fiduciary-duty)