Question

In the practice of real estate, agents and brokers seem to struggle with a legal concept known as "agency" and, in particular, a clear understanding of the difference between customers and clients. Fiduciary responsibilities are critical part of which relationship---customer or client? Why? Define a client and define a customer in terms of duties of the real estate agent? Lastly, “dual agency” is allowed in some states under very specific set of rules. What is “dual agency”? Is dual agency allowed in your home state? What are some of the rules that apply for dual agency? The state is texas

Answer 1

Fiduciary duty in real estate is the rapport and trust between a fiduciary and a client or a customer. The agent or the fiduciary is expected to treat the client as well as the customer with equal regards, however, the fiduciary responsibilities are more critical for maintaining the relationship of the agent with his client. This is so because the association between a client and the agent is long term and legally bound. The agent can represent the client in any legal setting, which is not the case with the customers. So the interests of the client must get the best interests of the agent. For example: The fiduciary responsibility of an agent is to maintain confidentiality of the client’s data, respecting his data privacy rights.

In terms of real estate, the primary differences between a client and a customer are as follows:

• Customer is an individual who needs to make a buying decision with the aid of the fiduciary, but is not represented by the agent. Client, on the other hand, is legally represented by the fiduciary, who can be referred to as his or her agent.
• An agency relationship exists between a client and the fiduciary. There is no agency relationship between an agent and a customer

A dual agency relationship happens when in a real estate transaction, both the buyer and the seller are being represented by the same fiduciary or broker. I live in California. Dual agency relationship is considered legal in California when both the buyer and the seller have given their consent to have the same broker, represent both the parties.

Some of the rules that apply to dual agency are:

• Both the involved buyer and seller must have information about the broker representing both of them in a legal transaction
• Both buyer and seller must give their consent for such a representation
• Fair representation of both the seller and the buyer must be done
• The agent will hold fiduciary duty for both the buyer and the seller