Yesterday I posted a blog about the actions of a few agents in our business who seem to take things a bit far in terms of negotiating on behalf of their clients. In some cases it seems they are negotiating for themselves and the client is an afterthought. That brought to mind the question of our fiduciary responsibilities. I suspect that some of those agents believe it is a part of that responsibility to protect their clients from themselves, so they say things like "I won't even present your offer to my client" or "I won't let my client do that."
I've had clients get mad at low ball offers and, since I was standing there at the time, get mad at me for bringing the offer to them. That sort of comes wit the territory, I guess. Once they calm down they usually apologize for getting mad at me. I tell them that it is part of my job to pass on all offers and then to counsel and advise as needed about the offer. I've also had more than one client accuse me of "working for the other side", if I advised them that the supposedly low ball offer was actually close to what I had already advised them was the market price (shame on me for taking that over-priced listing in the first place). Reality is sometimes a tough pill to swallow.
So, anyway, what is the fiduciary duty of the agent? Is it to interpose him/herself between the client and the market like a gatekeeper and make decisions about what gets through or is it to render advice and counsel on all offers, but to pass them all on? Is it to "negotiate" on behalf of the client by telling other agents what your client will or will not accept, even if you haven't asked your client? Even if I'm very familiar with my client and their tastes and opinion, I try not to think for them. Too many clients have ended up buying the house that "they would never consider" or taking the offer that they might have told me initially, "don't even bring me an offer below this price."
Real estate has proven over and over to be a business environment full of the unexpected, so I long ago stopped trying to think for my clients. I see my fiduciary role as one of having a level of understanding of the real estate process that they don't have and having access to some systems and forms and people and marketing resources that they don't have and applying that knowledge and those resources on their behalf to help them with the buying or selling of a home. It is not to wrap them in the protective armor of my own ego and not let this or that happen to them or not let them do something. I might tell them that"if it were me, I wouldn't do that and here's why," but not "I won't let you do that."
I do find myself spending lots of extra time explaining the real estate process to first time buyers, so that they understand what is "normal" and what decisions they have to make. It's especially important to communicate a lot and explain what is going on if they are trying to buy a foreclosed or short sale house. I usually have to also explain that there is no "normal" in those types of sales. In these cases I suppose that I'm at least saying, "you can do what you want, but I won't let you do it out of ignorance." I see that as my duty and responsibility, whether that qualifies as a fiduciary duty or not.
I remember the Kurt Vonnegut ads where he talked about not worrying about his retirement investments because he had a "fiduciary for that." He always had a little smile on his face when he said that word, I suspect because he found it funny to pronounce and at the same time, like most of us, had no real idea what it meant. What does it mean to you in your real estate business?
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