subject: Real Estate Agents Serving As A Fiduciary Representative [print this page] Real estate agents represent the interests of their clients. As an agent, you're bound by honor, ethics, and duty to work on your client's behalf to achieve the defined and desired results. Real estate agents are fiduciary representatives and financial advisors - not people paid to unlock front doors of houses for prospective buyers. A fiduciary is someone who is hired to represent the interests of another and involves the following functions:
Defining the client's objective
To serve as a good fiduciary representative, you need to start with a clear understanding of the objectives your client is aiming to achieve through the sale or purchase of property. Too many agents get into trouble by starting out with uncertainty about the interests of the people they're representing. To avoid this pitfall, you can prepare a questionnaire which you can use when interviewing and qualifying prospects.
Delivering counsel
In the same way that attorneys counsel clients on the most cost-effective way to proceed legally, it's your job to offer similarly frank counsel so that your clients reach the real estate outcomes they seek.
An attorney may encourage a client to proceed with a lawsuit when the client has a high probability of winning, or she may recommend an out-of-court settlement when odds point toward a court loss that could leave the client with nothing but legal bills to pay. Likewise, you need to be able to steer your clients toward good decisions reagarding the value of their homes, the pricing strategies they adopt, the marketing approaches they follow, and the way their contract is negotiated in order to maximize their financial advantage.
Diagnosing problems and offering solutions
A good agent, like a good doctor, spends a great deal of time examining situations, determining problems, and prescribing solutions. In an agent's case, the focus is on the condition and health of the home a client is trying to buy or sell. The examination involves an analysis of the property's condition, location, neighborhood, school district, street appeal, landscaping, market competitiveness, market demand, availability for showing and value versus price. The diagnosis involves an unvarnished analysis of what a home is worth and what changes or corrections are necessary.
Some say that agents should present all of the options available to their clients and then should recommend the course of action that they feel is best. By doing this, agents allow their clients to make the final decision. While many experts praise the virtues of this approach, I prefer the diagnostic and prescriptive approach because it positions you better as the expert. When clients make poor choices such as setting the wrong price on their home or making an initial offer that is too low, you may still receive some or all of the blame even though you were merely giving them options and they chose the wrong one.
Many agents get into trouble because they lack the conviction to tell clients the truths they don't want to hear. If a home is overpriced or not ready for showing, or if an offer is too low for seller consideration, it's the agent's job to speak up with sound advice. In these situations, you could get blamed for a poor outcome. You may also run the risk of doing all this work and not getting compensated for the time you invested.
Tourbleshooting
Unavoidably, many times as an agent, you have to be the bearer of bad news. Market conditions may shift and the price on a seller's home may need to come down. A buyer may need to sweeten initial offers to gain seller attention. A loan request may be rejected, or, you may need to contront sellers because the animal smells in their home may be turning buyers away. Or, a home that buyers really wanted may end up selling to someone else. At times like these, your calm attitude, solution oriented approach and strong agent-client relationship will win the day.
