Introduction

Real estate agents are professionals who play a vital role in the real estate market. They are intermediaries who represent the interests of buyers and sellers of property, and in that role, they have fundamental fiduciary duties that they must fulfill. In this article, we will explore these duties in detail, using the acronym COALD, which represents the key concepts of “Care,” “Obedience,” “Accounting,” “Loyalty,” and “Disclosure.” These terms, although in English, are fundamental to understanding the responsibilities of a real estate agent in the Spanish-speaking real estate market.

C – Care

One of the first fiduciary duties of a real estate agent is the duty of care. This means that they must exercise reasonable care and skill when providing services to their clients. Agents must be knowledgeable about the market and properties, conduct extensive research, and provide professional guidance. The duty of care ensures that clients receive advice based on accurate and up-to-date information.

An example of this duty is when an agent conducts a thorough inspection of a property on behalf of a buyer. Identifying and communicating any structural or maintenance issues is crucial for the client to make informed decisions.

O – Obedience

Obedience refers to the obligation of agents to follow the legal and ethical instructions of their clients. This means they must comply with reasonable customer requests as long as they are within legal limits. However, officers are not required to obey illegal instructions.

Let's imagine a scenario where a seller asks their agent not to reveal certain information about the property. The agent has a duty to comply with this request, unless prohibited by law, such as in the case of disclosure of serious structural problems.

A – Accounting

Accounting duty means that agents must accurately handle their clients' funds. They must keep clear and detailed records of all financial transactions related to the property. This includes handling deposits, payments and commissions.

The importance of accounting is evident when an agent handles a client's funds for transactions such as escrow. Accurate records ensure that there is no confusion over funds and that financial disputes can be resolved efficiently.

L – Loyalty

Loyalty is one of the most critical fiduciary duties. Agents must put their clients' interests above all other interests, including their own. This means they must act ethically and avoid any conflict of interest.

An example of loyalty is when an agent represents both the buyer and the seller in a transaction (dual agency). In this case, the agent must ensure that both parties receive fair and equitable treatment, without favoring one over the other.

D – Disclosure

The duty of disclosure implies that agents must communicate relevant and material information to their clients. This includes any details about the property that may influence the buying or selling decision. Agents must reveal both the positive and the negative.

For example, if an agent knows that a property has hidden plumbing problems, he or she is required to disclose this information to the potential buyer, even if the seller would prefer to keep it secret.

Conclusion

The fiduciary duties and responsibilities of a real estate agent are essential to protect the interests of clients and maintain the integrity of the real estate market. The concepts of COALD – Care, Obedience, Accountability, Loyalty and Disclosure – are pillars on which the real estate agent profession is based. By understanding and fulfilling these duties, agents can provide exceptional service to their clients and contribute to the efficient and ethical functioning of the real estate market.