A real estate agent who represents you as a client owes you six fiduciary duties: loyalty, confidentiality, disclosure, obedience, accounting, and reasonable care and diligence. These are the highest legal obligations one person can owe another, and they require your agent to put your interests ahead of their own, the other party’s, and everyone else’s involved in the deal. The fiduciary duties of real estate agents come from common law agency principles and are reinforced by state licensing statutes, industry ethics codes, and federal laws like RESPA and the Fair Housing Act. Since August 2024, changes tied to the National Association of Realtors settlement have also reshaped how the relationship starts, particularly for buyers.
How the Fiduciary Relationship Begins
The duties usually attach through a written agreement. For sellers, that’s the listing agreement. For buyers, the 2024 NAR settlement made written buyer agreements mandatory before an agent can even tour a home with you. The agreement must state the agent’s compensation in specific, measurable terms and include a conspicuous statement that commissions are negotiable and not set by law.1National Association of REALTORS®. Summary of 2024 MLS Changes
Duties can also arise without paperwork. If an agent starts acting like your representative by advising on pricing, coaching you through negotiations, or researching properties for your specific needs, a court may find an implied agency was created by that conduct. Agents who treat someone like a client take on fiduciary responsibilities whether or not a contract exists. Most states now require written agreements to be enforceable, but the duties themselves can attach through behavior.
Loyalty
Loyalty is the cornerstone. Your agent must put your interests above everyone else’s, including their own. No self-dealing. A broker cannot secretly buy a property you’ve listed, steer you toward a deal because it pays them a higher commission, or favor a friend’s offer over a better one from a stranger. If the agent stands to gain anything beyond their agreed-upon compensation, you have to be told.
The ban on hidden compensation has federal teeth. Under RESPA, anyone in a real estate settlement service who pays or receives a kickback or referral fee for steering business faces a fine of up to $10,000, up to one year in prison, or both. The person charged for the tainted service can also recover three times the amount of the fee in a civil suit.2Office of the Law Revision Counsel. 12 USC 2607 – Prohibition Against Kickbacks and Unearned Fees An undisclosed referral fee from a lender, inspector, or title company reaches well past a licensing problem.
Confidentiality
Your agent must protect the sensitive information you share, and the obligation does not expire when the deal closes or the agreement ends. The 2026 NAR Code of Ethics states that agents must not reveal confidential client information, use it to the client’s disadvantage, or leverage it for their own benefit or a third party’s, either during or after the professional relationship ends.3National Association of REALTORS®. 2026 Code of Ethics and Standards of Practice The only exceptions are client consent, a court order, or the need to prevent a crime.
Confidential information includes your financial position, the lowest price you’d take, your urgency to sell or buy, and your personal reasons for the transaction. If your listing agent tells a buyer’s agent that you’re going through a divorce and need to sell fast, that leak directly undermines your negotiating position and could cost tens of thousands of dollars. State boards can fine, suspend, or revoke a license for that kind of breach, and a private lawsuit for damages is also on the table if the leak caused a financial loss.
One boundary matters here: information about latent physical defects in the property is not confidential.3National Association of REALTORS®. 2026 Code of Ethics and Standards of Practice Your agent cannot hide a known foundation crack from a buyer by labeling it confidential client information. That falls under the separate duty of disclosure.
Disclosure
Your agent has an affirmative obligation to tell you anything that could affect your decision or the value of the property. That goes beyond obvious defects like mold or structural problems. It includes the other party’s financial reliability, pending zoning changes, environmental hazards, and any personal or business relationship your agent has with someone on the other side.
Agents also owe narrower disclosure duties to third parties. A listing agent who knows about a serious hidden defect typically cannot conceal it from prospective buyers, even though the listing agent’s primary loyalty runs to the seller. Disclosure of physical property conditions flows in both directions, while strategic or personal information about the client stays protected.
Stigmatized properties, where a death, crime, or other unsettling event occurred but left no physical damage, sit in a gray area. Most states do not require agents to disclose these events, and many expressly classify murders, suicides, and felonies on the property as non-material facts. Only a handful of states require disclosure, and those often limit the obligation to events within the past one to three years. Rules vary sharply by state.
Obedience
Your agent works for you, which means following your lawful instructions even when they disagree with the strategy. If you want to reject an offer the agent thinks is strong, that’s your call. If you want to price your home above what the agent recommends, the agent must execute your plan while noting a professional opinion. The job is to advise, not override.
The qualifier is “lawful.” No agent can follow instructions that violate the law, and the most common flashpoint is fair housing. The Fair Housing Act prohibits discrimination in any aspect of a housing transaction based on race, color, religion, sex, national origin, familial status, or disability.4Office of the Law Revision Counsel. 42 US Code 3604 – Discrimination in the Sale or Rental of Housing A seller who instructs their agent to refuse showings to families with children, or to market only to buyers of a certain background, must be refused. If the client persists, the agent has to withdraw from the representation rather than participate in the violation.
When an instruction is ambiguous rather than illegal, the standard is straightforward: the agent should clarify with you before acting.
Accounting
Money and documents that belong to you have to be tracked meticulously and kept completely separate from the broker’s own funds. Commingling client funds with a broker’s personal or business operating accounts is grounds for immediate license suspension or revocation in virtually every state, and in serious cases it can lead to criminal charges for embezzlement or fraud.
Earnest money deposits, security deposits, and other funds held on behalf of clients go into a designated trust or escrow account. The broker must maintain a clear paper trail showing every dollar received, held, and disbursed. Most states require deposit into the trust account within one to three business days of receipt, though the exact deadline often depends on the purchase contract rather than a fixed statutory number. If a trust account earns interest, written authorization from all parties with a stake in the funds is generally required before anyone can claim it.
Reasonable Care and Diligence
You’re hiring a licensed professional, and the law holds agents to the skill level that license implies. Reasonable care means preparing contracts accurately, monitoring contingency deadlines, verifying information like property boundaries and zoning, and staying current on market conditions. Most malpractice claims start here, because a missed deadline or an unchecked fact can cost real money with no one else to blame.
If an agent’s carelessness causes you a financial loss, they can be held liable for the full amount, and the liability often doesn’t stop there. Under basic agency law, the supervising broker or brokerage firm is vicariously liable for the acts of its affiliated agents when those agents are working within the scope of their duties. The brokerage’s insurance and assets are also on the line, which gives consumers a more meaningful path to recovery than suing an individual agent alone.
Brokers can also face direct liability for negligent supervision if they knew or should have known about an agent’s pattern of misconduct and failed to intervene.
How Dual Agency and Transaction Brokers Change the Duties
Dual agency occurs when one agent or brokerage represents both the buyer and the seller in the same transaction. It creates a built-in tension: the seller wants the highest price, the buyer wants the lowest, and one agent cannot fully advocate for both. Eight states prohibit dual agency outright. The rest allow it only with informed, written consent from both parties before the dual agency situation arises.
Even where it’s legal, dual agency fundamentally limits the fiduciary duties both clients receive. The agent can no longer give either side undivided loyalty or share confidential information from one party with the other. You get a facilitator rather than a fierce advocate.
Some states allow designated agency, where two different agents in the same brokerage each represent one side. Both parties must agree, and the brokerage has to ensure that an agent who received confidential information from one client is never designated to represent the other.
In some states, an agent can also work as a transaction broker, helping both parties complete the deal while owing fiduciary duties to neither. A transaction broker prepares paperwork and facilitates communication, but both sides give up undivided loyalty, confidential strategy advice, and full advocacy. If you’re working with a transaction broker, you’re largely looking out for yourself on negotiation and pricing.
What a Breach Costs the Agent, and What You Can Recover
The consequences of a fiduciary breach range from administrative sanctions to serious financial liability, and in some cases criminal prosecution:
- Commission forfeiture. An agent who breaches fiduciary duty can be required to return every dollar of commission earned on the transaction, even if some of their work was competent.
- Compensatory damages. If the breach caused a measurable financial loss, you can sue for the full amount. An agent who failed to disclose a material defect that cost you $40,000 in repairs is on the hook for $40,000.
- Punitive damages. In cases involving fraud, malice, or intentional misconduct, courts may award additional damages designed to punish the agent rather than just compensate the victim.
- Rescission. In extreme cases, a court can unwind the entire transaction, putting both parties back to their pre-deal positions.
- License discipline. State boards can fine agents, suspend licenses, or revoke them. These proceedings are separate from any civil lawsuit and can proceed even if you don’t sue.
- Criminal charges. Misappropriation of client funds, fraud, and RESPA kickback violations can all result in criminal prosecution with potential jail time.2Office of the Law Revision Counsel. 12 USC 2607 – Prohibition Against Kickbacks and Unearned Fees
Most states also maintain real estate recovery funds that compensate consumers when a licensed agent causes financial harm and can’t pay the judgment. Payouts typically fall between $50,000 and $250,000 per transaction or per licensee, depending on the state. Access usually requires a court judgment against the agent and proof that the judgment is uncollectible through normal means. The agent’s license is then automatically suspended or revoked until the fund is repaid.
When the Duties End
Most fiduciary duties terminate when the transaction closes, the agency agreement expires, or either party ends the relationship through whatever process the agreement requires. After that, your former agent generally owes you nothing further on loyalty, obedience, or active care.
Confidentiality is the exception, and it survives indefinitely.3National Association of REALTORS®. 2026 Code of Ethics and Standards of Practice An agent who represented you five years ago still cannot reveal your financial situation or motivations from that deal. The duty of accounting also extends past closing: the broker must provide a timely final summary of all money and property received on your behalf. Beyond those two, the former agent is free to represent other clients, including people on the other side of your next deal.