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Real estate glossaryNational exam concept

Fiduciary duty

Fiduciary duty is the heightened obligation of loyalty, obedience within lawful authority, disclosure, confidentiality, accounting, and reasonable care that an agent owes the principal, as shaped by statute and agreement.

Exam area: Agency

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What does “fiduciary duty” mean in real estate?

Fiduciary duty is the heightened obligation of loyalty, obedience within lawful authority, disclosure, confidentiality, accounting, and reasonable care that an agent owes the principal, as shaped by statute and agreement.

How is “fiduciary duty” different from the closest wrong answer?

Fiduciary duties are owed to a client or principal. A customer is still owed honesty and specified disclosures but not the same advocacy and loyalty.

What is the Georgia-specific rule?

Under BRRETA, a Georgia broker is not deemed a fiduciary of any party. The statute replaces common-law fiduciary duties with the duties it lists for each type of engagement, and it protects specified confidential information even after the engagement ends.

Worked exam example

Scenario

A buyer's agent keeps the buyer's maximum price confidential while diligently presenting the buyer's authorized offer.

What is the most common exam trap?

Trap correction

Obedience never requires following an illegal instruction, and disclosure to a client does not authorize revealing another client's confidence.

Original exam check

Apply the definition

A buyer tells the buyer's agent that the buyer would pay up to $425,000 but wants to offer $400,000. The listing agent calls and asks what the buyer's top price is. What should the buyer's agent do?

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