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Loyalty (real estate)


The obligation of an agent and broker to prioritize the goals of the principal over their own.


A broker and agent work for the principal and as such owe a duty of loyalty and confidentiality to the principal. The broker cannot personally profit from the agency, except for the agreed upon commission or payment structure according to the terms of the employment agreement. Courts have stated that that the broker is bound to act in the highest good faith effort to reach the goals of the principal without violating the law.

It is unlawful for a broker to entertain both the objectives of the principal and his or her own in the same transaction, unless it is disclosed to the principal. Of course, even if it is disclosed to the principal, the principal has the authority to object the broker’s suggestions.

Loyalty in real estate is one of the six major fiduciary duties owed by an agent/broker. In the context of real estate, fiduciary duty is the assumed duty of an agent to act faithfully, loyally, confidentially, and is also an obligation by which the agent must act fairly and honestly. Fiduciary duties also include the promise that agents will act in a manner fitting to the interests and goals of the clients, which means agents owe clients the duty to explain, counsel, and advise their clients in order for them make informed decisions.

Agent Owes the Principal the Following Fiduciary Duties:






Reasonable care and skill