By Mary Rupp, REALTOR, Blue Ridge Realty & Investments, LLC
Lately, there’s been a lot of talk about relationships in real estate transactions and who works for whom, so we thought we’d take a few minutes to clarify the relationships that REALTORS have with the public. Breaking it down as simply as possible, let’s talk about three separate types of relationship types: the Consumer, the Customer, and the Client.
The term Consumer is actually an umbrella term that covers both Customer and Client. It can mean Buyer or Seller, Landlord or Tenant, someone looking to buy or sell today or a year from now. In short, the Consumer is a member of the public that has or may have an interest in the real estate market now, or at some time in the future. To be extremely simple, we can say a member of the public who is eligible to purchase real estate is considered a Consumer.
The more complex nature of real estate relationships come when we start discussing the differences between Customer and Client.
A Customer is an individual, individuals or entity who is given service by a REALTOR, but there is no contractual agreement between the parties. The Customer may seek an agent’s assistance with various inquiries and market information and the REALTOR owes the Customer honesty and fairness, but there is no fiduciary relationship between the two. While the REALTOR does have obligations to a Customer, the Customer is not the primary responsibility of the REALTOR. Essentially, a Customer represents themselves.
A Client and a REALTOR have a contractual relationship; this contractual relationship must be reduced to writing. The REALTOR owes the Client loyalty, obedience, disclosure of all known facts, confidentiality, accounting, reasonable care and skill. REALTORS provide Clients with assistance in negotiation along with professional advice. In short, the REALTOR has a fiduciary duty to the Client that is not due to a Customer.
While many Consumers might prefer not to be in a contractual relationship with a REALTOR and remain a Customer, the advantages of a fiduciary relationship of becoming a client often outweigh that trepidation. But, it is for each individual Consumer to decide which relationship is best for them and it is up to the real estate professionals to fulfill their role as prescribed by law and the REALTOR Code of Ethics.
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