When people and companies want to purchase commercial or residential property, they typically will have a real estate broker handle the sale process. This is often true for both the buyers and sellers. People hire these brokers for their expertise in the real estate industry and to help ensure that people are getting the best property for their needs and the best deal for that property.
Real estate brokers do have a lot of authority to inquire about properties and also to negotiate the purchase prices of the various properties. However, ultimately, real estate brokers work for the buyers and sellers who are the ones who will be completing the transaction. Therefore, real estate brokers need to be acting in good faith and looking out for the best interests of their clients.
Real estate brokers’ fiduciary duty to clients
To ensure that this happens, under California law, brokers have a fiduciary duty to their clients. These duties include, but are not limited to:
- Loyalty to the client
- Full disclosure to the client
- Full and accurate accounting of all money that the broker holds on behalf of the client
- Use their unique skills and knowledge to exercise reasonable care when dealing with the client
- Keep client’s confidential information confidential
- Be completely honest with the client and only be concerned about what is in the client’s best interest over all other people’s best interests, including their own interests in the sale
- Follow the wishes and instructions of the client unless the request is illegal
People in the Sacramento area need to be able to trust their real estate brokers. They are considered experts in the field and people rely on that expertise when making decisions regarding the sale or purchase of real property. If brokers breach their fiduciary duty to their clients, the clients can suffer significant damages. If this occurs, the clients may be able to seek compensation for the damages they suffer. These are complicated matters and consulting with experienced attorneys could be beneficial.