An agent is expected to prioritize a principal’s interests over his or her own, regardless of the type of agency relationship or how it was established.
For example, if an agent discovers that there are lead-based hazards on a subject property that the buyer wishes to purchase, the agent must disclose this to the buyer. Even if the discovery is made days before the transaction closes, an agent is still required to disclose it as it may affect the buyer’s decision to close.
An agent is required to follow the directions of the principal even if they run counter to the agent’s goals and/or beliefs. An agent may inform a principal if he or she believes the principal is making a mistake, but as long as the principal’s directives do not break the law, the agent must comply with them.
The principal also owes the duty to be obedient to the licensee in assisting them with the necessary steps required to buy or sale a house. For example, if a principal is selling their home, the seller is required to assist the licensee in selling the property. This may include the need to allow open houses, hold property showings, and be available to discuss potential buyers. If the instructions of the principal are clear, the licensee is expected to follow those directions. If the instructions of the principal are undefined, the agent should clarify the instructions prior to making decisions on the principal’s behalf.Agents and brokers must be obedient to the wishes of their principals, even if said wishes are not expressly said. Although licensees are expected to lead the transaction, many principals will already have a plan that they wish to execute. If the licensee and principal agree to that plan, it is the duty of the licensee to be obedient to those requirements. Obedience in real estate is the requirement of an agent and broker to obey all the instructions of the principal in order to meet the goals of the principal, unless such obedience requires the agent to break the law or gain an unfair advantage over the opposing party.
Being obedient is one of the six fiduciary duties owed by an agent or broker to their principal whom is the buyer or seller.
Agent Owes the Principal the Following Fiduciary Duties:
· Accounting
· Confidentiality
· Disclosure
· Loyalty
· Obedience
· Reasonable care and skill
