How Real Estate Brokers Support Their Clients

The relationship between a real estate broker and their client is based on the trust that the broker will best advocate for and represent their client through the real estate transaction. In addition to legal responsibilities and obligations, brokers follow specific moral duties. Brokers are bound to these duties, both legally and ethically, and are held accountable to them by fellow brokers, their supervising Broker In Charge, their local Real Estate Board, their state Real Estate Commission, their state Attorney General, and more.

While there are some individual brokers who won't practice all of these responsibilities and duties, the majority take their role and their client's trust very seriously, and try to uphold these standards at all times.

Obedience

Obedience simply means that the broker is obligated to obey their client's instructions to the best of their ability, within the limitations of the established real estate relationship and not including any act that is unlawful or unethical. When an individual signs a contract to be represented by a broker, they expect and deserve to have their best interests supported in the manner they desire and in the direction they choose.

What this looks like...

• A broker WILL show active listings that fall within their client's budget, size, and desired features.

• A broker WILL accurately represent their client's intentions to other brokers and potential customers.

• What this does not look like...

• A broker WILL NOT show active listings above their client's budget to increase their potential commission.

• A broker WILL NOT refuse to show their client's property to a minority group or any other community that the client has instructed their broker to avoid.

Loyalty

A broker is loyal to their client, even above themselves and their own self interest. This means that brokers will place their client's desires above all others and advocate for what is in the best interest of their client. Since the broker is compensated via commission in the real estate transaction, this takes time and intentionality for brokers to willingly and knowingly negotiate the best position for their client, even when it may mean they will earn less commission in the end.

What this looks like...

• A broker WILL negotiate a lower buying price for their client to protect their client's financial best interests.

• A broker WILL protect private, confidential information that may give an upper-hand in the negotiations to another party.

What this does not look like...

• A broker WILL NOT negotiate on behalf of their client so that the broker receives as large of a commission as they can make happen.

• A broker WILL NOT provide private, confidential information to another party to close the deal quickly or as leverage in the negotiation.

Disclosure of Information

Along with Loyalty, brokers have a duty to disclose all information that could be beneficial to their client within the real estate negotiation and transaction. If the broker learns of key information, either about the property or the other party, that can be used to better position their interest, it is the brokers responsibility to discretely disclose that information. If the information could impact their client's decision within the transaction, it should be disclosed.

What this looks like...

• A broker WILL disclose all information they obtain about the status and quality of the property, the other party's financial motivations, and potential future costs.

• A broker WILL disclose important information that likely will lead to the termination of the pursuit to contract, knowing that it will mean termination of the broker's commission as well.

What this does not look like...

• A broker WILL NOT receive additional compensation from any source within or adjacent to the transaction without disclosing the source and amount of compensation to their client.

• A broker WILL NOT hide a deficiency in the property or fact that will reduce the value to make the property appear more desirable.

Confidentiality

Converse to Disclosure of Information, Confidentiality is the duty to withhold information that could be used against a broker's client in the negotiation of real estate. Brokers are experts in their craft and are a huge resource for their clients. In order for buyers and sellers to fully confide in their broker and utilize their broker's experience and skills, it is imperative for Confidentiality and trust to be firmly rooted in the relationship. It is important to note, however, that a broker cannot withhold disclosing material facts. If a broker has any knowledge of a serious defect, issue, or any other information that may impact the decision to further engage in the real estate transaction.

What this looks like...

• A broker WILL keep their client's reason for selling their home private, such as job loss, divorce, to prevent bankruptcy, etc.

• A broker WILL keep their client's highest offer amount that they are willing to consider, if needed.

What this does not look like...

• A broker WILL NOT lie about any known defect, issue, damage, or other information that may deter a potential buyer.

• A broker WILL NOT share their client's private information and facts to create a more desirable outcome for themselves.

Accounting

Brokers must be responsible for any and all funds received from, or on behalf of, their client. There are multiple safeguards and options for brokers to ensure this duty is fulfilled, such as maintaining a separate trust bank account exclusively for the temporary holding of client funds or by not holding client funds at all, and allowing the closing attorney's trust bank account to temporarily hold the funds.

What this looks like...

• A broker WILL maintain clear documentation and communication regarding the movement of all funds that they are involved with.

• A broker WILL limit the actual time that a physical check, cash, or money order is in their possession before depositing it in the appropriate trust bank account.

What this does not look like...

• A broker WILL NOT use client money to fund other money making strategies to benefit the broker or the firm.

• A broker WILL NOT mix personal or firm funds with client funds, this is called co-mingling.

Reasonable Skill and Care

One of the primary reasons a buyer or seller may decide to partner with a broker, brokers are expected to provide expert, professional service to their clients. Many people will only engage in a real estate transaction once or twice in their lifetime, and cannot be expected to understand the working of the business, laws and rules that apply, or a detailed breakdown of the process and how to maneuver through it. Brokers are the guides and advocates to help their clients and provide knowledge, skills, and care beyond what they would have access to on their own.

What this looks like...

• A broker WILL maintain a calm, confident energy to guide their client through the ups and downs of real estate.

• A broker WILL share their personal knowledge and guidance to ensure that the client's best interests are protected.

What this does not look like...

• A broker WILL NOT abandon their client during their contract.

• A broker WILL NOT provide minimal information and guidance to assist their client, expecting their client to figure it out on their own.

After years in advertising and marketing, living and working for companies in Georgia, North Carolina, and China, I decided to acquire my real estate license so I can use my established marketing and communications skills to help others and work for myself.

For many people, buying and/or selling their home is one of the most important and most stressful times of their lives. Having an advocate and an agent who has experienced years of corporate marketing, managing teams through challenging projects with tight deadlines, and negotiating complex deals - will aid in the home buying or selling process.

If you or anyone you know is interested in real estate investment, a personal real estate search, or property management, please reach out to me directly - I would love to provide my services to help find your goal property as soon as possible.

Bo Hardegree, NC REALTOR®
Espin Realty
[email protected]
704-748-095