Home Selling - What the Law Requires of Real Estate Agents When You List Your Home For Sale

What the law requires of real estate agents when you list your home for sale is pretty clear. The contract you signed means the Realtor is your agent, and there is a long history of legal cases defining what that means.

The law on agency sets out the duties of the agent as follows:

Obedience
Loyalty
Confidentiality
Disclosure
Accounting
Reasonable Care

Obedience

Agents must do what their clients tell them to do unless it would be illegal, or unless it is not within the scope of their agency duties as outlined in the agency contract (listing contract).

Loyalty

All of your actions must be for the best interests of your client, and you must do nothing to harm your client's interests. For example, if you are willing to accept a lower price than was offered and your agent told that to the buyer, that would be a violation of this duty as well as confidentiality.

Disclosure

You can expect your agent to disclose to you everything he or she knows that could impact your situation. If your agent is aware that there will be a zoning change on adjacent property, you must be given this information. Any knowledge that the agent has that could benefit the client in any way must also be disclosed immediately.

Confidentiality

During the course of listing a house for sale and marketing it your agent will learn many things about your personal and financial situations, as well as your attitudes and opinions. Anything you say to your agent must be kept strictly confidential.

Accounting

Often agents are given money or other things of value, and these must always be accounted for very carefully.

Reasonable Care

The duty of reasonable care is open to interpretation and thus has been the subject of many lawsuits. Ultimately it means the agent must protect the client from harm in the course of the transaction.

The agent's ignorance of something that is detrimental to the client is no defense if it is found in court that the real estate agent should have known it or should have told the client where to get this crucial information.

The real estate agency contract requires your agent to advise you on things such as inspections, repairs, negotiations and price.

Sometimes the agent is asked about topics not covered by the agency agreement, such as real estate law. In this case the agent is under a duty to make sure the client sees a lawyer to get information about applicable laws.

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Leo J. Vidal, JD, MA, CPA is a real estate marketing expert, and a Realtor who helps property owners use special marketing methods to sell their homes fast.