Performance of Your Real Estate Broker

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If you're going to hire a real estate broker or agent to sell your property, you'll probably be signing a real estate brokerage contract or listing agreement. This contract sets out specific terms of sale as well as the specific actions your broker will take in selling your property. You can expect your broker to perform the actions set out in the agreement. You can also expect your broker to fulfill the duties of a real estate broker, which are set by the laws of your state.

Brokerage or Listing Agreement

A real estate brokerage contract or a listing agreement creates an agency relationship between a real estate broker and another person, called the principal, which covers the broker's efforts to sell, buy, lease or exchange real estate for the principal. The principal can be a seller, buyer, lessor or lessee.

If you're selling your real estate, you can hire a real estate broker by signing a brokerage contract or listing agreement with the broker. The listing agreement will contain such things as price, terms of sale and length of the listing time. It will also set out the specific responsibilities of the broker, such as:

• Showing the house
• Conducting open houses
• Marketing the house
• Negotiating with the buyer
• Preparing the contract of sale
• Representing you at the closing

You can expect your broker to fulfill all of the promises she made in the agreement. You can also expect your broker to fulfill the duties of a real estate broker, which are usually set by state law or regulations.

Fiduciary Duties

Brokers, as agents, owe certain fiduciary duties to the clients they represent. Fiduciary duties are obligations to act in the client's best interests. Those duties include:

• Exercising reasonable skill and care in representing the client and carrying out the responsibilities of the agency relationship. Examples might include advising the seller as to a reasonable and adequate listing price (when representing the seller), recommending other advisors when appropriate, meeting deadlines, making reasonable efforts to market the property (when representing the seller) and making reasonable efforts to locate suitable property (when representing the buyer).
• Following any lawful instructions of the client.
• Using her best efforts in performing duties, loyal to the client's interest.
• Disclosing all material or important facts to the client. For example, a broker should disclose to her client her relationships with other parties, the existence of other offers, the financial condition of the other party, the property's true worth, commission arrangements, and the legal effect of important contract provisions.
• Accounting for the client's money and property.
• Keeping information confidential as required by state law or regulations.

Legal Duties

All states have laws or regulations that apply to real estate brokers. These laws establish additional duties owed to the seller, and they require a seller's broker to:

• Seek a purchase offer at a price and with terms acceptable to the seller
• Present any purchase offer to the seller in a timely manner
• Provide the seller with a copy of any agency disclosure form signed by the buyer before presenting the seller an offer to buy

The laws also prohibit all of the brokers involved in a transaction, whether they represent the seller or the buyer, from knowingly giving false information.

Things to Be Wary of

Your real estate broker has a fiduciary duty to you. That means that your broker has to act in your best interest in selling your house. Before you hire a broker, you should do some checking. Ask for references from the broker, and check with local and state real estate boards to see if any complaints have been filed against the broker. Also, ask the broker about any possible conflicts of interest.

After you've hired the broker, keep track of the broker's activities. Ask for updates on possible buyers. You should be wary of a lack of communication from your broker. That may be an indication that your broker isn't making his or her best effort to sell your house. Make sure that the broker is living up to the requirements of the listing agreement.

Getting Out of a Listing Agreement

When you want to get out of a listing agreement, for whatever reason, you should consider:

• Looking at the agreement itself to see if there is language that covers your situation
• Looking at the language of the agreement to see if there are duties the broker hasn't performed
• The time remaining on the agreement before it expires

You may find it best to simply let the listing agreement expire, and plan to relist your property with another real estate broker at that time

If you feel your broker has done something unethical, report it to your local or state real estate board.

Finally, remember that your real estate attorney can be consulted to help you review your listing agreement, and help you review your options in dealing with your broker if efforts to sell your home are not satisfactory to you.

Questions for Your Attorney

• What should I do if I want a real estate broker to perform certain duties in selling my house and he isn't cooperating?
• Can my real estate broker act contrary to my interest in selling my house? Am I responsible for his actions?
• Can my real estate broker misinform potential buyers about certain defects in my house? Can I tell my broker what information to reveal and withhold from potential buyers?

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