Fiduciary Duties In Real Estate

Definition of "Fiduciary Duties in Real Estate"

Vicki Foster real estate agent

Written by

Vicki Fosterelite badge icon

Southeastern Real Estate

A real estate professional’s job is to represent their seller’s or buyer’s best interest in a real estate transaction through an agency relationship. This means that the client’s interest is the main focus of a real estate professional. This agency relationship is legally mandated to follow, something known in the real estate industry as fiduciary duties by acting in the client’s best interest.

The fiduciary definition in real estate explains the type of relationship between an agent and a client. The word fiduciary means a faithful servant, and we all know the saying, “The customer is always right”. The real estate agent, broker, or salesperson is a fiduciary of their client through the fiduciary duties.

Do Real Estate Agents have Fiduciary Duties?

As we already mentioned, a true agency relationship requires to respect the fiduciary duties. In case they are violated, or if they aren’t performed as requirement requests, the agent can be held responsible in court.

These fiduciary duties can differ from one state to another, so they should be reviewed by any real estate professional entering an agency relationship. The one fiduciary responsibility required in every state is confidentiality when it comes to the client’s information as the trust shared between an agent and their client is vital for a good collaboration. We’ll get into details for all of them below.

What are Fiduciary Duties in Real Estate?

An agency agreement underlines additional responsibilities and duties that the agent is legally obligated to respect through a written agency agreement. For agents all across the country interested in agency relationships, the acronym OLDCAR was created for an easier way to retain these fiduciary duties. As the acronym already points out, there are six fiduciary duties in total, and we’ll give a little information about each of them.


Aside from illegal actions that might overstretch the term, an agent is required to respect and obey their client’s instructions. 

If there are two buyer’s offers on the table for the same price and the client instructs the agent to ignore one of them without informing them because they don’t like the buyer’s purple hair, the agent is required to obey that instruction.


Any other party comes in second to the client’s interest, including the agent’s. The agent’s increased commission from a competing offer does not give the agents the right to push that offer on the client.

The buyer agent knows that they would get a bonus from property A and no bonus from property B. In this case, the agent can show property A to the client if it fits the client’s liking. However, the agent is ethically obligated to inform their client about the bonus before forwarding a purchase offer from them.


In many states, real estate agents must inform their clients about material facts that might affect the client’s decision to purchase or sell a property. There are, however, things a real estate agent can’t tell their clients.

If, through their activity as a real estate professional, an agent becomes aware that the seller of their client’s dream home is struggling financially, they are obligated to disclose the information as it might help their client during negotiations.


As mentioned above, confidentiality is a requirement across the country. An agent can not share the information learned from their client, their motivation, or personal affairs. Even after the transaction is over and the agency agreement is terminated, the agent can only be relieved of this duty through a court of law.


The accounting fiduciary duty obligates the agent to keep all the accounting related to the real estate transaction and be aware at all times of the status of the payments through accurate reporting.

Reasonable Care

The fiduciary duty of reasonable care covers the agents’ responsibility for how they guide and advise their clients. An agent’s level of knowledge can be tested at times, but an agent should either know the information, find it, or inform the client where they can find the information. A judge or jury can properly define reasonable care, but that happens only after the deed was done.

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