The fiduciary duty of loyalty is one of the highest legal obligations owed by a real estate agent to a client. Under this duty, the agent must place the client’s interests above the agent’s own interests and above the interests of any other party in the transaction. Loyalty requires the agent to act in good faith, avoid conflicts of interest, and pursue the client’s objectives with honesty and diligence. For example, a real estate agent representing a seller must seek the best possible terms and price for the client, while refraining from actions that could compromise the client’s negotiating position or financial interests. The duty also prohibits an agent from secretly profiting from the transaction or favoring another party for personal gain.
The duty of loyalty extends to maintaining confidentiality and disclosing material information that could affect the client’s decisions. An agent may not reveal confidential facts—such as a seller’s willingness to accept a lower price or a buyer’s maximum budget—without informed consent from the client. In situations involving dual agency, where one agent represents both buyer and seller, the duty of loyalty becomes limited because the agent cannot fully advocate for one party without potentially disadvantaging the other. Violations of the fiduciary duty of loyalty can result in disciplinary action, civil liability, loss of commission, and damage to the agent’s professional reputation.
