Loyalty; A Fiduciary Responsibility

Real estate agents from across the country prompted me to write this article. If we step back in time 50-60 years, people

were loyal to each other. They were loyal to the people they did business with. The giving and receiving of loyalty was expected. It was almost like an unwritten law of conduct. In many cases, deals were made with a handshake. No written contract was required. What happened to it?

Then came prosperity

Fast forward to the time when people in this country began to prosper. People began thinking of their own wellbeing; what benefits them most and less importance in keeping their word to someone else. It seems that in more recent years, more and more people have the attitude of, “I’ll stick it to you before you can stick it to me.” What a shame! At one time the “Golden Rule,” do unto others as you would have them do unto you, was deeply embedded into the way we lived and the decisions we made.

Complaints from real estate agents

One of the main reasons I’m writing this article is because of the number of agents contacting me wanting to know why their prospective clients are buying from another agent. They want to know what they can do that will cause their customers to call them back; to be loyal to them. I always heard that when you point your finger at someone else, you have three fingers pointed back to you. So let’s address this situation.

Exactly what is loyalty?

To answer this question in its simplest for, loyalty is being true to someone or something. To a real estate agent, a duty of loyalty is one of the most fundamental fiduciary duties owed by an agent to his principal. This duty obligates a real estate broker/agent to act at all times solely in the best interests of his principal to the exclusion of all other interests, including the broker/agent’s own self-interest.

The three-finger concept

If we accept this concept, we acknowledge that the problem begins with us. We may in fact be the problem. For example let’s say that you are working with a prospective buyer. You have shown your customer four houses and suddenly you can’t get them to call you back. They won’t answer your emails. Who is at fault; you or the consumer?

Self-examination

• First we should ask ourselves how much time did we spend explaining the process for finding them the best suitable property.
• Did we mutually agree on the best method of communicating with each other?
• Did we begin our involvement with the prospective buyer by having a quality consultation to allow time for us to get to know each other and determine the expectations from both parties?
• Did we explain to them the need to be loyal to each other in order to find them the best investment opportunity?
• Did we truly put their best financial interest above our own?

Loyalty demonstrated

If we are totally honest with our customers, show a sincere interest in their best financial interest, explain what we expect from them and make a promise of what we can and will do for them and then mutually enter into a contractual agreement, loyalty between the parties will be demonstrated.

Loyalty to ourselves

I truly believe that loyalty begins with us. We have to be loyal to our own standards. How honest are we when we charge one person 5% commission to list a property; charge another person 6% and yet another 7%. I’m sure this statement will upset some of you because you think you have to negotiate commissions to get a listing but are you being fair to everyone else. If we show partiality on one, we are being unfair to another. I’m only using commissions as an example of how we need to set our own standards to live by and then be loyal to those standards.

Should you have specific questions concerning various issues, please let me know and I’ll research the answer for you. I also want to encourage you to subscribe to our “News & Updates” weekly report so you can stay abreast of issues that might affect you when buying or selling real estate. If you haven’t visited my website, please go to www.AlabamaRealEstateInstitute.com and view previous articles.

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