Buyer's Agent

Standing in a fiduciary relationship with their principals, real estate brokers are subject to the same highest duty of good faith and fair dealing that is imposed on trustees acting on behalf of their beneficiaries.

A real estate broker has a fiduciary duty to disclose to his or her principal(s) (including both buyer and seller in a 'dual agency' situation) all 'material facts—that is, all facts which might affect the principal's willingness to enter into or complete a transaction.'

When transmitting material information from the seller (or others) to the buyer, the buyer's broker must either verify the accuracy of the information or disclose to the buyer that the information has not been verified.

A buyer's broker who accepts material information from others as being true and transmits it to the buyer without verification or disclosing to the buyer that it has not been verified breaches his or her fiduciary duty and may be liable to the buyer for negligent misrepresentation or 'constructive fraud.'

Seller's Agent

A broker engaged by a property owner to market and sell the owner's property likewise has a fiduciary duty to the seller (the broker's principal) to disclose all 'material facts'(again, meaning those facts that might affect the seller's decision to proceed with the transaction).

A broker is obligated to exercise reasonable skill and care in the performance of his or her duties. Holding themselves out as professionals with superior knowledge in real estate transactions, brokers are subject to the standard of care that would be exercised by a reasonably prudent real estate broker or salesperson acting in a similar capacity.

The broker's fiduciary duty remains the same even if the broker (or his or her relative or associate) may also be a principal in the real estate transaction. 'In other words, once an agency relationship has been created between the agent and the seller, the agent is not absolved of fiduciary duties merely because he or she is also buying or selling as a principal.'

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