This duty of care extends beyond the actual transaction and lasts as long as you’re representing the client—even after the deal is done. If you violate these rules, you could be sued for breach of fiduciary duty.
What Does the Acronym OLD CAR Mean in Real Estate?
Fiduciary duty in real estate is often broken down into six categories, commonly referred to as the “OLD CAR” acronym. It stands for:
Obedience: You must obey your client’s lawful instructions.Loyalty: You must always act in your client’s best interests, even if it means forgoing your own interests. Disclosure: You must disclose any material facts about the transaction, including your relationship to the other party.Confidentiality: You must keep your client’s information confidential unless you have their permission to do otherwise. Accounting: You must keep accurate records of all money and property involved in the transaction.Reasonable Care: You must use reasonable care and skill when handling your client’s business.
Examples of Fiduciary Duty in Real Estate
Here are four examples of when you could violate your fiduciary duty as a real estate agent: If you neglect your fiduciary duty—whether accidentally or on purpose—you could be sued for damages, breach of contract, intentional misrepresentation, and more. In some cases, you may even lose your real estate license.
How long a property has been on the marketWhy it’s priced the way it isAny counter-offers that have been madeIf the seller is willing to accept a lower price
If your client is selling, you must tell them:
If a buyer is willing to pay a higher priceWhat the buyer’s intentions are with the propertyAll offers made on their property
