Real Estate Term of the Day: Fiduciary

Real Estate Term of the Day: Fiduciary

FIDUCIARY – one who acts, in a legal role, in the best interests of others (Barron’s Dictionary of Real Estate Terms)

When you hire a BROKER to help you purchase or sell a home, the exclusive agreement between the you and the agent, will illustrate the duties of the agent and establish the agents rights to act as a fiduciary.

Fiduciary duties of a broker when working with a buyer according to the State of Colorado Exclusive Right-to-Buy Listing Contract are:

  • Broker shall exercise reasonable skill and care for Buyer, including but not limited to the following:
    • Performing the terms of any written or oral agreement with Buyer
    • Presenting all offers to and from Buyer in a timely manner regardless of whether Buyer is already a party to a contract to Purchase the Property;
    • Disclosing to Buyer adverse material facts actually known by Broker;
    • Advising Buyer regarding the transaction and advising Buyer to obtain expert advice as to material matters about which Broker knows but the specifics of which are beyond the expertise of Broker
    • Accounting in a timely manner for all money and property received; and
    • Keeping Buyer fully informed regarding the transaction
  • Broker shall not disclose the following information without the informed consent of Buyer
    • That Buyer is willing to pay more than the purchase price offered for the Property
    • What Buyer’s motivating factors are
    • That Buyer will agree to financing terms other than those offered;
    • Any material information about Buyer unless disclosure is required by law or failure to disclose such information would constitute fraud or dishonest dealing; or
    • Any facts or suspicions regarding circumstances that could psychologically impact or stigmatize the Property
    • Any material information about Buyer unless disclosure is required by law or failure to disclose such information would constitute fraud or dishonest dealing; or

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Fiduciary duties of a broker when working with a seller according to the State of Colorado Exclusive Right-to-Buy Listing Contract are:

  • Broker shall exercise reasonable skill and care for Seller, including, but not limited to the following:
    • Performing the terms of any written or oral agreement with Seller;
    • Presenting all offers to and from Seller in a timely manner regardless of whether the Property is subject to a contract for Sale;
    • Disclosing to Seller adverse material facts actually known by Broker;
    • Advising Seller regarding the transaction and advising Seller to obtain expert advice as to material matters about which Broker knows but the specifics of which are beyond the expertise of Broker;
    • Accounting in a timely manner for all money and property received; and
    • Keeping Seller fully informed regarding the transaction.
  • Broker shall not disclose the following information without the informed consent of Seller:
    • That Seller is willing to accept less than the asking price for the Property
    • What the motivating factors are for Seller to sell the Property;
    • That Seller will agree to financing terms other than those offered;
    • Any material information about Seller unless disclosure is required by law or failure to disclose such information would constitute fraud or dishonest dealing; or
    • Any facts or suspicions regarding circumstances that could psychologically impact or stigmatize the Property.

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