Last week, experts released the results of the S&P / Case-Shiller home price index. According to the index, Chicago-area home prices rose 10.9 percent in October from October a year ago, and Chicago-area condominium prices rose 14.2 percent over the same time span. As noted in a recent story by the Chicago Tribune, this growth in the housing market is the best for the local market since 1988. Although 2014 may not see the same double digit growth in housing prices experienced this year, forecasts predict that Chicago housing prices will continue to rise. Such growth in the housing market will lead many Chicago residents to buy or sell property this year.
Nearly all who buy or sell a home employ a real estate broker. According to the Illinois Licensing Act of 2000, a real estate broker, as a fiduciary, will owe certain duties to a buyer/seller. For those employing a real estate broker, a review of these duties may be beneficial. These duties include:
Reasonable Skill and Care – For a real estate broker that represents a seller, this duty includes helping the seller determine a listing price, market the property, and help the seller assess offers. It also includes helping the seller receive the highest possible price for the property (or best overall deal in light of the seller’s needs). For a real estate broker that represents a buyer, this duty includes helping the buyer locate property, analyze the market, and suggest quality lenders, home inspectors, and other professionals. It also includes helping the buyer achieve the lowest possible price for the property (or best overall deal in light of the buyer’s needs).
Loyalty – The duty of loyalty requires that the real estate broker place the interests of the principal (e.g., the buyer or seller employing the real estate broker) above all other interests. This duty requires that the real estate broker keep certain information about the principal confidential. For a seller, the real estate broker may not reveal that the seller is willing to accept less than the listing price, and for a buyer, the real estate broker may not reveal that the buyer is willing to pay more than the listing price. Further, the duty of loyalty prohibits a real estate broker from acting in his or her own self-interest. This means that the real estate broker must negotiate for the benefit of the principal and not for the purpose of receiving a potential commission from the transaction.
Accounting – The duty of accounting requires a real estate agent to account for all money and/or property, entrusted to the real estate broker, which belongs to the buyer/seller. For example, Illinois law requires that all fund entrusted to a real estate broker be deposited in a separate escrow account.
Obedience – This duty requires that the real estate broker obey the instructions of the buyer/seller, so long as the instructions are not unlawful or unethical.
Disclosure – Under this duty, the real estate broker is obligated to disclose all relevant and material information to the buyer/seller, such as information affecting the value of the property.
If you have questions regarding the rights and obligations owed to you by a real estate broker, contact the experienced real estate attorneys at The Slater Firm, Ltd. today.