Agency Relationships and Fiduciary Duties
Client, customer, and the shape of the relationship
Agency is a fiduciary relationship created when a broker acts on behalf of a client with that client's consent and control. Clients receive fiduciary duties; customers (unrepresented parties in the transaction) receive honesty, fairness, and accurate information - never loyalty or confidentiality. Know how agency is created (express agreement, implication, ratification, estoppel) and the agent's scope: general, special (the ordinary brokerage relationship), or universal.
The duties
Memorize OLD CAR: Obedience (to lawful instructions), Loyalty, Disclosure (of material facts), Confidentiality (which survives termination), Accounting (for money and documents), and reasonable Care and skill. Disclosure and confidentiality collide in dual agency, which is why dual or designated agency requires informed written consent from all parties and forbids advocacy for either side.
Traps
- Giving advice to an unrepresented buyer can create implied agency; showing a listing never makes that buyer the listing agent's client.
- Confidentiality outlives the agreement; loyalty never requires concealing material defects.
- Commission is negotiable - never imply it is set by law or by a board.
- A customer is owed truthful answers, not silence about the seller's motivation.
Rule of thumb
At every substantive contact ask: who am I representing, and have I said so in writing? If either answer is unclear, stop and disclose.
Worked example
A listing agent hosts an open house; a visitor asks, 'How low will the seller go, and should I offer less?' The agent represents the seller. Answering 'they would take $20,000 less' breaches loyalty and confidentiality; suggesting an offer price risks creating implied agency with the buyer. The correct response is to explain the agency relationship, offer a referral to a buyer's agent, and give only factual property information.