Real estate agent - breach of fiduciary duty

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pivoprussia
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Real estate agent - breach of fiduciary duty

Post by pivoprussia »

We believe our real estate agent has breached their fiduciary duty multiple times:

1- include our personal names in an email to the other party's agent without permission

2- gave the buyer my personal email address without permission (he went on to email me directly over 100x)

3- told the buyer directly about a non-material defect that wouldn't require disclosure - without permission

4- told the buyer's agent results of an engineer's report that we paid for and specifically asked the he/she not share
(to be clear we hired our own engineer after the buyer's engineer claimed structural issues that we suspected were not legit. Our engineer showed us why their engineer was wrong - so we weren't asking the agent to cover up a latent defect). When confronted about the issue, he/she became verbally abusive and went on to say they worked in the area and their reputation was on the line as to why they revealed the info to the other agent- - clearly putting their own interest ahead of ours.

In addition to the above this agent has been verbally abusive and unprofessional multiple times and has even sent emails and flowers as an apology for their behavior. Yet, it continues to happened.

We are now past the due-diligence period and set to close in a few weeks.

How would you handle the situation?
Thanks for your thoughts
Mr. Rumples
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Re: Real estate agent - breach of fiduciary duty

Post by Mr. Rumples »

Do you want the property? Have you suffered any monetary loss? I'd consider these first. Your options then will range from asking to be released from the contract and/or asking for reimbursement for your costs. They will most likely say no and then its off to an attorney. You can file a complaint with your state's licensing authority and the entity which regulates their industry. You can file a complain with the BBB. You can ask the real estate company for another agent.

Hold on to all the emails and even the dried dead flowers, they are an admission. As George said on Seinfeld "You can stuff your sorrys in a sack."
Last edited by Mr. Rumples on Fri Aug 14, 2020 5:42 am, edited 1 time in total.
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yatesd
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Re: Real estate agent - breach of fiduciary duty

Post by yatesd »

Not 100% sure, but my initial thoughts:

- Ask agent's broker to reassign someone else
- Send formal complaint to broker (if not successful, part of larger agency?, escalate)
- If necessary, send formal complaint to any relevant government oversight
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Watty
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Re: Real estate agent - breach of fiduciary duty

Post by Watty »

pivoprussia wrote: Fri Aug 14, 2020 5:28 am How would you handle the situation?
It partly depends on how the real estate agents office is set up and that can vary a lot and that can vary by state.

Often there will be an office(that may part of a large chain) where the lead person is the Broker and they may have a dozen real estate agents working for them.

https://www.zillow.com/agent-resources/ ... -vs-agent/

Basically the broker is the real estate agents boss and may have legal responsibilities for what the real estate agent does.

If that is the way that your real estate agents office is set up then the first thing I would do would be to have a face to face meeting with the broker to discuss the problems. The broker may step in and handle the rest of the sale themselves, possibly at a reduced commission.

If the real estate agent is the broker and they are part of a large chain then you may be able to get some sort of higher level person in that chain involved.

One thing to keep in mind is that even though you are having problems with your real estate agent you still are in a valid contract with the buyer and that is not their problem.
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JoeRetire
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Re: Real estate agent - breach of fiduciary duty

Post by JoeRetire »

pivoprussia wrote: Fri Aug 14, 2020 5:28 am We are now past the due-diligence period and set to close in a few weeks.

How would you handle the situation?
Since for some reason you decided to put up with it so far, I'd close on the house and put it behind you.
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jfn111
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Re: Real estate agent - breach of fiduciary duty

Post by jfn111 »

pivoprussia wrote: Fri Aug 14, 2020 5:28 am We believe our real estate agent has breached their fiduciary duty multiple times:

1- include our personal names in an email to the other party's agent without permission-Your names are on all contracts you signed for the sale?

2- gave the buyer my personal email address without permission (he went on to email me directly over 100x)-That should never be done. All communications should be through the agent.You can report them to the Broker and to your regulatory board, probably state Commerce Dept.

3- told the buyer directly about a non-material defect that wouldn't require disclosure - without permission-It's drummed into our heads to disclose, disclose, disclose. I have no idea what a non-material defect would be?

4- told the buyer's agent results of an engineer's report that we paid for and specifically asked the he/she not share
(to be clear we hired our own engineer after the buyer's engineer claimed structural issues that we suspected were not legit. Our engineer showed us why their engineer was wrong - so we weren't asking the agent to cover up a latent defect). When confronted about the issue, he/she became verbally abusive and went on to say they worked in the area and their reputation was on the line as to why they revealed the info to the other agent- - clearly putting their own interest ahead of ours.- I'm trying to imagine the scenario where you hire an engineer and don't want the agent to use that information to counter a buyer request?

In addition to the above this agent has been verbally abusive and unprofessional multiple times and has even sent emails and flowers as an apology for their behavior. Yet, it continues to happened.-Again you can report this to Broker and regulatory body

We are now past the due-diligence period and set to close in a few weeks.

How would you handle the situation?
Thanks for your thoughts
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Watty
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Re: Real estate agent - breach of fiduciary duty

Post by Watty »

pivoprussia wrote: Fri Aug 14, 2020 5:28 am 2- gave the buyer my personal email address without permission (he went on to email me directly over 100x)
I thought about this some more and this seems odd.

The first time I got an email from a buyer I would have just told them to contact my real estate agent and ask them to not contact me directly again.

There are all sorts pitfalls with you having a lot of direct contact with the buyer since something you said could be construed as being a promise, representation, or to involve discrimination.
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pivoprussia
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Re: Real estate agent - breach of fiduciary duty

Post by pivoprussia »

Watty wrote: Fri Aug 14, 2020 7:12 am
pivoprussia wrote: Fri Aug 14, 2020 5:28 am 2- gave the buyer my personal email address without permission (he went on to email me directly over 100x)
I thought about this some more and this seems odd.

The first time I got an email from a buyer I would have just told them to contact my real estate agent and ask them to not contact me directly again.

There are all sorts pitfalls with you having a lot of direct contact with the buyer since something you said could be construed as being a promise, representation, or to involve discrimination.
You are 100% correct. Apparently having the buyer and seller communicate directly is a big no-no and even has potential legal pitfalls.
She should have known better. He was contacting me about buying furniture but that should have been handled through the agents.
Jack FFR1846
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Re: Real estate agent - breach of fiduciary duty

Post by Jack FFR1846 »

What outcome are you looking for?

If it is to sell your house at $xxxx price, then hold to your price, regardless of offers or demands to fix things. If the buyer doesn't want to pay your price or your agent continues to work against you, then the buyer doesn't get the house and your agent doesn't make a dime.

Things you could do include pulling the house off the market and fire the agent, letting their brokerage know why. Wait until the contracted period ends or ask the brokerage to let you out of the contract in writing and then find another agency. You could ask for a different agent but you still need to deal with this buyer.

You can block the email address of the buyer. Why haven't you just done this?

In the end, you're in charge of everything. You don't have to accept anything you don't want to. Buyer's engineer says there's major structural problems? Buyer wants $50k concession to fix it? Easy answer to the buyer: "Pound sand". Reject their offer completely and move on.
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stan1
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Re: Real estate agent - breach of fiduciary duty

Post by stan1 »

What do you want? Are you trying to set up a case not pay commission or file a complaint? It sounds like the sale is set to close. Do you want to back out of the sale?

Laws vary by state but realtors do get sued (and sometimes lose or settle out of court) when they know about a defect that is not disclosed to the buyer.

How did you decide to hire this realtor? How many sales per year does the realtor close on and does the realtor work full time or have side jobs? Seems like there is some level of inexperience.

For your next property you might want to try FSBO.
HornedToad
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Re: Real estate agent - breach of fiduciary duty

Post by HornedToad »

1. Non issue. Your name is a matter of public record on the property and needed for the contract.
2. Medium issue. You should have just told buyer to communicate thru the agent and had it be done
3. Non-issue. You can’t tell your agent not to disclose a defect that they know about and legally agent needs to be able to disclose
4. This doesn’t make sense why you wouldn’t want to use your own engineer report to counter? This and the previous makes it look like you are seeking trouble. You hired your engineer to prove theirs wrong, you did so and didn’t want to use the info? It also falls slightly under #3 about legally representing their best understanding of the property.

What do you actually want? I would finish sale, be done with it and not use the agent/broker in the future.

Next time do FSBO if you don’t want your agent to disclose information about the house.
CPA without a cause
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Re: Real estate agent - breach of fiduciary duty

Post by CPA without a cause »

Surprised no one mentioned this, but real estate agents ARE NOT fiduciaries. CPAs and lawyers are, real estate agents and most investment advisors (as is commonly discussed on this forum) are not.

no doubt they are a lousy agent, but that isn't unique to a field where the only barrier to entry is having a pulse.
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Re: Real estate agent - breach of fiduciary duty

Post by smackboy1 »

CPA without a cause wrote: Fri Aug 14, 2020 9:41 amSurprised no one mentioned this, but real estate agents ARE NOT fiduciaries. CPAs and lawyers are, real estate agents and most investment advisors (as is commonly discussed on this forum) are not.
In theory, realtors are suppposed to have a fiduciary standard of care.

https://www.nar.realtor/about-nar/gover ... f-practice

In reality, real estate agents and brokers may not be operating in the client's best interests all the time. In OP's case it sounds like the agent may have been just acting unethically.

It's not surprising that the public perception is that realtors never act as if they have a fiduciary duty - because in many cases they legally don't. It doesn't seem to be OP's situation, but real estate agents use the ruse of "dual agency" to contractually nullify their fiduciary obligations to their clients. By signing a dual agency agreement clients are basically signing away their rights and allow the realtor to represent both sides of the adversarial transaction - financially good for the realtor, but not so good for the clients. It would be like the same law firm representing both the plaintiff and the defendant in the same lawsuit - an untenable ethical situation.
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Nate79
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Re: Real estate agent - breach of fiduciary duty

Post by Nate79 »

You seem itching for a fight for extremely minor and non issues. Either do the deal or don't and move on.
petulant
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Re: Real estate agent - breach of fiduciary duty

Post by petulant »

CPA without a cause wrote: Fri Aug 14, 2020 9:41 am Surprised no one mentioned this, but real estate agents ARE NOT fiduciaries. CPAs and lawyers are, real estate agents and most investment advisors (as is commonly discussed on this forum) are not.

no doubt they are a lousy agent, but that isn't unique to a field where the only barrier to entry is having a pulse.
To be clear about the investment advisors, a Registered Investment Advisor, which is the only kind of professional that can be called an investment advisor, DOES have a fiduciary duty. Most people giving "financial advice" are actually not investment advisors, they are legally categorized as broker-dealers (and "agents" of BDs) or insurance agents or both. I believe in one of the Rick Ferri interviews on the BH podcast, some statistics were mentioned that made it seem like true fiduciary RIAs are a tiny minority of the overall picture, though.
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Re: Real estate agent - breach of fiduciary duty

Post by DarkHelmetII »

pivoprussia wrote: Fri Aug 14, 2020 7:15 am Apparently having the buyer and seller communicate directly is a big no-no and even has potential legal pitfalls.
What is an example of such a pitfall?
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Re: Real estate agent - breach of fiduciary duty

Post by barnaclebob »

DarkHelmetII wrote: Fri Aug 14, 2020 3:02 pm
pivoprussia wrote: Fri Aug 14, 2020 7:15 am Apparently having the buyer and seller communicate directly is a big no-no and even has potential legal pitfalls.
What is an example of such a pitfall?
An email from the seller to the buyer saying "dont worry the basement wont get water in it" or "Dont worry, the roof easily has 10 years left on it." These could be legally considered warranties. One of the first things our realtor told us was promise anything about the house because it could be construed as a warranty. Our realtor was good at his job and educating use, many arent.
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Re: Real estate agent - breach of fiduciary duty

Post by Carefreeap »

pivoprussia wrote: Fri Aug 14, 2020 7:15 am
Watty wrote: Fri Aug 14, 2020 7:12 am
pivoprussia wrote: Fri Aug 14, 2020 5:28 am 2- gave the buyer my personal email address without permission (he went on to email me directly over 100x)
I thought about this some more and this seems odd.

The first time I got an email from a buyer I would have just told them to contact my real estate agent and ask them to not contact me directly again.

There are all sorts pitfalls with you having a lot of direct contact with the buyer since something you said could be construed as being a promise, representation, or to involve discrimination.
You are 100% correct. Apparently having the buyer and seller communicate directly is a big no-no and even has potential legal pitfalls.
She should have known better. He was contacting me about buying furniture but that should have been handled through the agents.
If the furniture wasn't included in the purchase contract then it needs to be handled outside of the contract by the private parties. Not getting your permission is odd but I can see someone doing it out of expediency. I certainly would be concerned about someone e-mailing me 100x. Are you sure that's not an exaggeration?
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Re: Real estate agent - breach of fiduciary duty

Post by Sandtrap »

We are now past the due-diligence period and set to close in a few weeks.
Everything is in escrow?
Close in 14 days?

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Re: Real estate agent - breach of fiduciary duty

Post by rebellovw »

HornedToad wrote: Fri Aug 14, 2020 8:11 am 1. Non issue. Your name is a matter of public record on the property and needed for the contract.
2. Medium issue. You should have just told buyer to communicate thru the agent and had it be done
3. Non-issue. You can’t tell your agent not to disclose a defect that they know about and legally agent needs to be able to disclose
4. This doesn’t make sense why you wouldn’t want to use your own engineer report to counter? This and the previous makes it look like you are seeking trouble. You hired your engineer to prove theirs wrong, you did so and didn’t want to use the info? It also falls slightly under #3 about legally representing their best understanding of the property.

What do you actually want? I would finish sale, be done with it and not use the agent/broker in the future.

Next time do FSBO if you don’t want your agent to disclose information about the house.
Exactly what I was thinking as I was reading the opening post. 100% agree.
interwebopinion
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Re: Real estate agent - breach of fiduciary duty

Post by interwebopinion »

Unless you have a signed contract where the agent specifically signed up to be your fiduciary, then you're basically out of options. And if you have signed paper on the property, there's not many options at this point.
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Re: Real estate agent - breach of fiduciary duty

Post by Normchad »

I don’t see a breach of fiduciary anywhere in here. You do not like what they’ve done, but how have you actually been harmed? In what way did they put their interests ahead of yours?

I think typically they don’t want buyers and sellers communicating directly, for fear of them cutting agents out of the deal. In your shoes, I’d be irked about the emails, but it’s just an irritation.

If you’re super worked up about it, just don’t go to closing.

It sounds like you’re trying to sell something, and the agent found a buyer and you’re going to closing. That was the goal.
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Re: Real estate agent - breach of fiduciary duty

Post by Normchad »

CPA without a cause wrote: Fri Aug 14, 2020 9:41 am Surprised no one mentioned this, but real estate agents ARE NOT fiduciaries. CPAs and lawyers are, real estate agents and most investment advisors (as is commonly discussed on this forum) are not.

no doubt they are a lousy agent, but that isn't unique to a field where the only barrier to entry is having a pulse.
Is that true everywhere? I swear when I last bought a house, there was a signed document by my agent that they were a fiduciary in the transaction. I found the following link, but I don’t know it’s legitimacy.


http://www.realestatebuyersagents.com/v ... duties.htm
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Re: Real estate agent - breach of fiduciary duty

Post by Bobby206 »

CPA without a cause wrote: Fri Aug 14, 2020 9:41 am Surprised no one mentioned this, but real estate agents ARE NOT fiduciaries. CPAs and lawyers are, real estate agents and most investment advisors (as is commonly discussed on this forum) are not.

no doubt they are a lousy agent, but that isn't unique to a field where the only barrier to entry is having a pulse.
Probably state by state. In California Realtors do have a fiduciary relationship. From the DRE website:

https://dre.ca.gov/files/pdf/The%20Real ... uciary.pdf
neverpanic
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Re: Real estate agent - breach of fiduciary duty

Post by neverpanic »

Bobby206 wrote: Fri Aug 14, 2020 5:31 pm
CPA without a cause wrote: Fri Aug 14, 2020 9:41 am Surprised no one mentioned this, but real estate agents ARE NOT fiduciaries. CPAs and lawyers are, real estate agents and most investment advisors (as is commonly discussed on this forum) are not.

no doubt they are a lousy agent, but that isn't unique to a field where the only barrier to entry is having a pulse.
Probably state by state. In California Realtors do have a fiduciary relationship. From the DRE website:

https://dre.ca.gov/files/pdf/The%20Real ... uciary.pdf
It does vary by state, and in California and Nevada, dual agency is also legal. So.....*shrug*

OP - Close the sale, move on with life. If the buyers come back with a repair demand, you can always refuse and tell your agent if they want to capitulate and absorb the cost, they can.
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000
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Re: Real estate agent - breach of fiduciary duty

Post by 000 »

If someone did this to me, I would terminate their authorization to be my agent and consider if I suffered any damages.

Also I would never, ever pay a buyer's agent based on the ultimate sale price of the home.
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LilyFleur
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Re: Real estate agent - breach of fiduciary duty

Post by LilyFleur »

I decided after the initial purchase contract was signed for my condo, that I wanted to buy the seller's washer and dryer. My agent handled it. At no point did I speak or email directly with the seller. Seems like your agent was a bit lazy in that respect.
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Re: Real estate agent - breach of fiduciary duty

Post by stan1 »

Re: buying furniture. If it was a simple sale of household items (items listed and a total dollar amount) it would be common to group it together and realtor would facilitate. But if buyer and seller wanted to haggle over a dozen items separately I can see how the realtor would excuse himself and say work it out among yourselves.
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