What “fiduciary” means and how it applies to your real estate transaction
05/13/2016 | Author: Marty Kramer
I read the most incredible thing this morning: Some financial advisers can put their own interests above yours.
That’s right … as long as that financial professional recommends an investment that is “suitable,” he or she can suggest a fund with higher costs to you (and higher commissions for the adviser) than a cheaper fund that may be a better option for you.
Though that is shocking to me, I am encouraged by the following:
- Many financial advisers adhere to a higher standard that puts the interests of the client above those of the adviser.
- New rules are in the works to require this higher standard for advisers and brokers who work with retirement accounts.
More good news for anyone buying, selling, or leasing real estate: When you receive agency services from a licensed real estate agent or broker in Texas, that professional is required by law to put your interests above his or her own. It’s called a “fiduciary” relationship.
Even better news when you hire a real estate agent or broker who is also a Texas REALTOR®: All REALTORS® pledge to abide by a Code of Ethics that holds REALTORS® to an even higher standard than what’s required by law.
To make sure you’re getting the highest level of professionalism, make sure your agent or broker is also a Texas REALTOR®.
If you’re doing intermediary, forget fiduciary. It does not apply. You cannot be a fiduciary to opposing parties. As one TAR attorney once said, “Intermediary is a legal fiction.” I know TAR will pull this post. Have you ever seen the prosecutor defend the defendant?
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