I take my role as a Realtor very seriously and I work to look after my clients’ money as if it was my own and I was the one purchasing or selling a property. As such, I wanted to share with you a recent experience that highlights what “Fiduciary Duty” really means in practice.
From the National Association of Realtors site, the following spells out the major aspects of a Realtor’s Fiduciary Duty to clients.
- “Loyalty: To act at all times in the best interest of the principal and to put those interests above all others, including yourself.
- Obedience: To obey promptly all lawful instructions of the principal.
- Disclosure: To disclose all known, relevant facts to the principal.
- Confidentiality: To safeguard the principal’s secrets, unless keeping the confidence would violate disclosure requirements about the property’s condition.
- Reasonable care and diligence: To diligently use real estate skills and knowledge when pursing the principal’s affairs.
- Accounting: To account for all funds and property entrusted by the principal”
Appreciating that I have a higher level of commitment than just a customer relationship with the people I work for, here is the example I mentioned.
When Larger Economic Issues Have an Impact Locally
My buyers decided on a home in Chandler recently. The inspections were performed and we had just moved successfully past the 10-day inspection period when I got a call from the listing Realtor.
Unfortunately, the message was not good. The sellers in this case were moving to Colorado as a result of a job relocation. However, the seller worked for General Motors and had just found out that GM was closing the Colorado facility and he no longer had a job to go to there or here for that matter. This was the week that GM officially filed for Chapter 11 Bankruptcy protection.
Between the listing Realtor and myself, we had never seen a transaction go south like this. It’s one of those rare instances where no one is happy with the circumstances - not the sellers, not the buyers, not the lender, not the title people, and not the Realtors.
Buyer Out $663?
Once notice of cancellation was received by title from the sellers, title issued a letter of cancellation for all parties to sign. Now, in this circumstance, there is not really much recourse in the way of getting reimbursement for the buyer’s expenses. This is an open hole in the Residential Purchase Contract. There are protections for the buyer and their earnest monies but not for their expenses if the seller does not conclude the transaction or cancels - at least not without painful, legal procedures. Of course, this doesn’t happen often at all. Usually, the seller is more at risk from the buyer failing to perform.
So, my buyer was facing a loss of $663.00 here.
- $280 - Home Inspection
- $38 - Termite inspection
- $345 - Appraisal
Fiduciary Duty Means Fighting for the Clients’ Hard-Earned Money
Fiduciary duty means that you fight to preserve the clients’ money as much as possible why working to get them the best value possible. In this case, my concern was that they would lose $663 here. So, I inquired as to a reiumbursement by the relocation company with the other Realtor. Truth be told, I didn’t believe the sellers would contribute here given their unfortunate circumstances. My hope was that the relocation company would assist here.
So, I worked to get the relocation company to reimburse my clients. As such, we didn’t provide the cancellation letter signed by my clients until we had some level of written agreement that they would do this.
Agreement on Reimbursement
We got it. The relocation company was cordial enough to agree to reimburse my clients for their expenses. My clients are pleased with this outcome. In truth, this could have been money that they could have lost altogether and chalked up to an unfortunate circumstance that affected everyone. In the end, the best possible outcome for my clients in this situation is that at least they don’t lose money.
Losing Money is Never Easy, Especially Now
Losing money is never easy but in today’s climate where every dollar counts, it is all the more important. Having said that, I was pleased with the outcome here. Though I can’t help with the time and emotional toll of not getting the home my clients wanted, I was at least able to get them the money back they spent on services in the process of buying this property.
As for the sellers, my best wishes for finding a new job and getting through this difficult period.
Email this Post
