Fiduciary

A fiduciary duty is the highest standard of care recognized by law. In Texas real estate, this duty requires agents to act with complete fidelity and loyalty to their principal in all aspects of representation.

Texas-Specific Nuance & Citation

According to TREC Rules §531.1 (Fidelity), a real estate license holder, while acting as an agent for another, is a fiduciary. The rule dictates that the agent must represent the client’s interests with absolute loyalty, and must never place their personal interest above the client’s interest.

The Trap

Many candidates believe fiduciary duties only apply to listing agents. In Texas, a buyer’s agent is also a fiduciary who owes the exact same duties of obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care to their buyer-client.

Worked Example

An agent in Lubbock knows that a seller is in a rush to sell their property due to financial distress. The agent represents the seller as a fiduciary. When an investor buyer asks, “What’s the lowest price they will take?”, the agent’s fiduciary duty of confidentiality prevents them from revealing the seller’s financial pressure.