What Are the Fiduciary Duties of a Real Estate Agent?

Bettina Siochi
Jul 19, 2021
6 min

You have to build strong relationships with your clients to have a long, lucrative career in real estate.

The top producing agents earned their fame and fortune because of the people they know.

So, how do you build a strong, reliable, trusted relationship with people?

The answer: provide good customer service.

When your clients like working with you, they will recommend your services to other people they know. That’s how successful real estate agents create their careers.

Their network starts finding work for them.

Now the question becomes, “how do you provide great customer service to your clients.” To do this, you have to build trust with your client.

The National Association of REALTORS® created a method to build trust that has helped millions of agents generate satisfying customer service.

This method is a set of ethical rules that agents follow to foster a trustworthy relationship with clients.

It’s called fiduciary duties. So, let’s learn about the fiduciary duties of a real estate agent so you can foster trust.

What does fiduciary mean?

What does fiduciary mean?

In its simplest form, fiduciary refers to a trust.

Once a client signs a contract with you, a fiduciary relationship forms.

This relationship means that the client now places their trust in your hands. In return, you perform your work with your clients’ best interests in mind.

The fiduciary duties of a real estate agent are:

  • Loyalty
  • Obedience
  • Confidentiality
  • Disclosure
  • Accounting
  • Reasonable Care

Now that we know the fiduciary duties of a real estate agent, let’s explore what they mean.

What are the fiduciary duties of a real estate agent?

Real estate agents must fulfill their fiduciary duties. By doing so, they uphold the credibility of not only themselves but agents across the country.

So, let’s see how you can apply the fiduciary duties of a real estate agent to your career.


Loyalty refers to an agent’s responsibility to be loyal to their principal (client.) Regardless of the situation, you must always put the interests of your client ahead of your own.

For example, you represent a buyer who wants to buy a 5-bedroom property with a maximum budget of $1,000,000. If you find a listing that meets your clients’ requirements for $700,000, you have to tell them.

Monetarily speaking, you earn a bigger commission check if your client buys a $1,000,000 listing. But, because the $700,000 is a better deal for your client, you must tell them about it.

On the other hand, if you represent a seller, then you must do everything in your power to sell the property. You must market the listing and close it while getting the best deal for them.


One fiduciary duty of a real estate agent is to adhere to the lawful requests of their clients.

If your client asked you to take a break from marketing their home for a week, then you are legally obligated to follow their instructions. Also, if your client asks you to stop showings while they aren’t around, you have to stop showings.

But, you may encounter a client who asks you not to entertain offers or showings for people of a specific religion or race. In this situation, you should not follow the order because doing so is discrimination, an unlawful act.

A client may also request that you do not disclose a property defect. Withholding this information may help you sell the property fast and earn more money, but it’s illegal. So, you are obligated to disclose all information about a house – even if it goes against your client’s wishes.


This fiduciary duty instills the client’s confidence in you as their representative.

Confidentiality of information means not sharing information that your client gives you. This information is vital if the disclosed information damages the reputation of your client and affects ongoing negotiations.

Here’s an example: if you represent the buyer and discover they are comfortable paying more, you shouldn’t disclose this information to the listing’s agent.

On the other hand, if you’re the seller’s agent, you cannot inform buyers that your client is willing to accept low offers.

Always ensure you’re getting the best deal for your clients.


If you have information that can benefit your client in the negotiations, you must disclose it.

For example, you must share information about the property’s well-being with your client. This information will position your client better for negotiating a lower price if there is a property defect. Also, if you represent a seller and find out that the buyer urgently wants to sell, you can tell your client.

Another piece of information you must always disclose to your client are offers. Regardless of how bad an offer is, you should share it with your client. Also, You must inform your client should a potential buyer or seller be someone with whom you have a relationship.


Another fiduciary duty of a real estate agent is to take good care of the client’s funds. The first part of this duty is understanding the elements of financial transactions and how you should handle them.

You have to let your client know where their money is going.

Whether you’re a buyer’s agent or a seller’s agent, you have to keep track of the money.

You can’t accept your client’s funds. For example, if your buyer hands you their deposit for the property, you must send it to escrow. Do not deposit it to your account, even if you intend to send it to escrow.

Reasonable Care

The last fiduciary duty is to apply reasonable care.

As a real estate agent, people expect you to act as a capable professional.

You must apply and exercise your skillset and knowledge with diligence. By doing so, you create a strong, trustworthy relationship with your client.

Do you have a fiduciary relationship with the third party?

Do fiduciary duties of a real estate agent apply to third parties? To put it simply, no.

But, just because you don’t have a fiduciary relationship with them does not mean that you are allowed to break the rules. You’re a licensed professional, so you should uphold your professionalism with everyone you work with.

Final Thoughts on the Fiduciary Duties of a Real Estate Agent

The fiduciary duties of a real estate agent demonstrate how to uphold integrity. When you practice these duties in every relationship, you will build trustworthy relationships.

These relationships will provide long-term benefits to your career because you provide exceptional customer service. That’s how real estate agents become successful. In short, don’t try cutting corners or sneaking your way to money because the best way to earn success is with integrity.

Every week, we release in-depth videos to help viewers become successful real estate agents on our CA Realty Training YouTube Channel. Also, if you enjoyed reading this article, we would love it if you could share it with a friend who you think would get something out of it.

Bettina Siochi
Jul 19, 2021
How To
6 min