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Real Estate Vocabulary Words (170 of 300) | Real Estate Estate Exam Prep Videos - YouTube
Channel: The Real Estate Classroom
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in today's real estate exam prep video
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we're going to continue our important
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key real estate vocabulary word series
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today we're going to do 170 of 300
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fiduciary duties so let's get rolling
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[Music]
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hey everyone my name is paul vachesky
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and welcome to the real estate classroom
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youtube channel where my mission is
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simple and that's to help you pass your
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real estate exam the first time hey real
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quick do me a favor subscribe to the
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channel i would love that um today we're
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going to cover
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fiduciary duties
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number 170 of 300 fiduciary duties it's
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important key concept that you have to
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know not only for your real estate exam
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but also when you get into the real real
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estate world uh representing buyers and
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sellers so what is a fiduciary duty
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um fiduciary duty you probably
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learned this term uh when you were in
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your principles and practices class when
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you were talking about agency and agency
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relationship they kind of go hand in
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foot but a fiduciary duty
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is someone
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who owes a fiduciary duty to someone
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else now the person that owes the
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fiduciary duty is known as the fiduciary
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or the agent
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and they must act on behalf of or in the
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best interest of someone else and that
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someone else is called the client or
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principal
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now in the context of a
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real estate relationship
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the licensee
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or agent remember
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that the licensee and agent are one in
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the same
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they owe
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the fiduciary duties to
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the client or principal and remember
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client principle mean the same thing
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they're one in the same person
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so let's talk about specifically what
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those fiduciary duties are that you have
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to know
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now the first one i want to talk about
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is loyalty one of the the first
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fiduciary duty that an agent owes their
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client is loyalty and this is where the
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agent puts the interest of the client
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before their own so let me give you an
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example maybe you're working with
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as an agent you're working with an
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investor the investor calls you and says
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hey i found this pretty good deal on 123
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main street i'd like to put in an offer
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so instead of writing up the offer for
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your client you go ahead and contact the
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listing agent or the seller directly to
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put your own offer in because you do
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recognize it is a great deal that would
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be a violation of the fiduciary duty of
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loyalty
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the next one i want to talk about is
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obedience this is where the agent must
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obey all the lawful instructions of the
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client as it relates to a real estate
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transaction so for example
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maybe there is an uh maybe there's a
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listing a 500 000 listing that your
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client wants to put an offer in and you
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sit down with that client and the client
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says i want to offer fifty thousand
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dollars
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and you say fifty thousand dollars on a
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five hundred thousand dollar
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listing
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you have to do it why because the
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fiduciary duty of obedience requires
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that you
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obey all the lawful instructions and
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that is a lawful instruction even if you
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know
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that that seller there's no hope in
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hades that that seller's ever gonna ever
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accept that lowball offer
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the next one is disclosure disclosure
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falls into two categories the first one
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is the agent must disclose at the
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beginning of the relationship who they
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represent
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and then number two is as that
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relationship progresses
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the the agent must disclose to their
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client any information that they receive
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that would benefit the client's position
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or their negotiation position
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the next one is what we call skill and
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care
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this is where the agent must use their
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professional skills remember once you
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obtain a license you have a certain
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professional skill set and you have to
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use that on behalf of and for the
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benefit of your client
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the next one is confidentiality and
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again as i said previously each state
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has different rules
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on the scope of confidentiality
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how they define confidential information
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so you have to know that for your
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licensing exam for the state side but in
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general confidentiality
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is a case where the agent can't disclose
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anything that's that's confidential
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because typically confidential
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information falls into one of two
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categories either number one it's not
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relevant at all to the transaction or
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number two
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it can harm your clients position
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so give you an example let's say that
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the reason your seller is selling the
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property is a divorce situation
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well if you were to disclose that
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then obviously that's that could impact
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and probably would impact any
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any offer
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that a potential buyer may submit the
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buyer may view this as a you know a
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desperate situation and throw in a
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lowball offer that they normally
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wouldn't have because they you know
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they're banking on the fact that this is
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a must sell type situation
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again you can disclose confidential
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position available adverse material fact
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is one of those conditions so let's say
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you're the listing agent and you know
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that the foundation is completely shot
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the seller knows it too but the seller
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does not want that information disclosed
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or the seller is telling you not to
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disclose it well that is a case where
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you're going to have to disclose it
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because it's an adverse material fact
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same way with
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title issues
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qualifications or or
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you know the buyer's financing issues
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stuff like that accounting
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this particular fiduciary duty requires
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that the agent account for all funds or
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things of value that come into the
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possession of the licensee now most of
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the time it's
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money in the form of cash a check a
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money order you know earnest money rents
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security deposits those type of things
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so the agent is most of the time going
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to be required to put it into the
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broker's trust account that is a form of
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accounting for
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that that asset but it doesn't have to
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be
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money
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it can be so for example maybe a buyer
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wants to put a prom a promissory note or
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a diamond ring as a deposit for earnest
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for the earnest deposit
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that is legal and it it is it can happen
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so we have to account for that diamond
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ring or that promissory note so that's
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what i'm talking about when we're
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discussing accounting now if you're
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going to continue studying for a real
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estate exam check out this video right
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here if you have not subscribed please
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do so click the little circle to my left
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comments and questions down below would
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love that see y'all in the next video
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