In real estate, the difference between what an agent does for a client versus a customer comes down to the legal relationship and level of responsibility. A real estate agent has fiduciary duties to a client, which do not apply to a customer. These duties dictate how the agent must act on behalf of the client and include a higher level of care, loyalty, and advocacy.
Here’s a breakdown of what an agent does for a client that they don’t do for a customer:
1. Fiduciary Duties to Clients
For a client, the agent acts as a fiduciary, which includes:
- Loyalty: The agent must act in the client’s best interests, even if it conflicts with their own interests.
- Confidentiality: The agent is required to keep the client’s information confidential, such as financial details or motivation for buying or selling.
- Obedience: The agent must follow all lawful instructions from the client.
- Full Disclosure: The agent must inform the client of all material facts that could affect their decision-making, such as issues with a property or changes in market conditions.
- Accounting: The agent must account for all funds related to the client’s transaction.
- Reasonable Care and Diligence: The agent must use their professional skills and expertise to protect the client’s interests and help them make informed decisions.
2. Negotiation
For clients, a real estate agent will engage in active negotiation to get the best terms and conditions in the contract, whether it’s for a purchase, sale, or lease. With a customer, the agent may simply facilitate the transaction without advocating for them.
3. Personalized Advice
Agents provide tailored advice and guidance to clients, offering professional opinions on pricing strategies, property conditions, and how to maximize value. For customers, agents typically offer general information without offering personalized advice that could influence the customer’s decisions.
4. Full Representation
An agent represents the client throughout the entire transaction, from listing or finding a property to closing the deal, handling all communication, documentation, and negotiations on behalf of the client. In contrast, a customer may only receive limited assistance, such as showing properties or preparing paperwork, without deeper guidance or advocacy.
5. Handling Confidential Information
An agent must safeguard a client’s confidential information, such as financial details or their reasons for selling or buying. For a customer, the agent is not obligated to keep information confidential, especially if it could benefit the agent’s client.
6. Compliance with Legal Obligations
For clients, agents have a legal duty to protect their interests and ensure the transaction complies with all relevant laws and regulations. For customers, the agent may not have the same obligation to provide comprehensive guidance or ensure legal compliance on every detail.
In summary, real estate agents provide a higher level of service to clients because they owe them fiduciary duties, including loyalty, confidentiality, and full representation, whereas customers receive a more limited, transaction-focused service.
