Not a post for supporters of a certain orange celebrity with bad hair. This post is about a five syllable word.
The dictionary definition, though I am sure a lawyer (lawyers are fiduciaries) can give a better one, is someone in a position of absolute trust, loyalty and confidence. In addition to lawyers, your accountant, investment adviser and other similar professionals are fiduciaries.
Now, except in certain circumstances, your Realtor is not a fiduciary. Although you may refer to someone as “your” Realtor (and likely not be corrected), or a Realtor may refer to you as their “client” (though except in certain circumstances they are not supposed to do so), this is technically not the case.
I bring this up because we have many out of state (and out of country) buyers and sellers here, real estate law varies state by state in this country, and Florida has its own rules. The old industry model was that the Realtor worked exclusively for the seller of the property. A Realtor who brought someone to view a property who ultimately made an offer on it, may have provided certain services to the buyer, but by law represented the seller. As such the Realtor was, generally, a fiduciary of the seller, and information that the buyer disclosed to the Realtor could then be relayed to the seller (but not vice versa unless the seller gave express permission).
Over time this changed. Some states began to allow what is called “disclosed dual agency.” Under that standard the Realtor could be a fiduciary of both buyer and seller simultaneously. But in Florida, dual agency is expressly forbidden under the real estate law. Here’s the important thing to know, though. Under Florida law (and consumers don’t always know this), the default and assumed position of a Realtor is not as fiduciary but as “transaction broker.”
The difference between the two roles is spelled out in the statute. A transaction broker works to deliver a fair deal to all sides, such that will complete the transaction. While fiduciaries owe absolute loyalty and confidentiality to their clients, the rules are bit different with respect to transaction brokers (who have customers not clients). A lawyer could explain the difference to you better than I ever could, since I am not a lawyer and cannot provide legal advice.
Is this a distinction without a difference? Most people probably don’t care too much. They have a need, they want to buy or sell a property, and the Realtors work to facilitate that. I must say, though, I have had people who wanted to work with me on an exclusive basis – as my client not as my customer. I am happy to do this, but need to disclose to everybody involved that I am not a transaction broker and that I represent the interests of my client exclusively. Usually the other parties in the transaction are fine with this. But not always.by