Welcome to Rocky Point! If you are, as I was on my first trip to Puerto Peñasco, you will fall in love fast, dream about living here, then purchase property and make Paradise your forever home. The part of the dream about purchasing property is fraught with pitfalls, which you can avoid if you assure that the real estate agent you pick, and you should intentionally pick one, acts as your fiduciary as you choose and purchase your property.
According to the National Association of Realtors in the U.S.A., “A real estate broker who becomes an agent of a seller or buyer, either intentionally through the execution of a written agreement, or unintentionally by a course of conduct, will be deemed to be a fiduciary. Fiduciary duties are the highest duties known to the law.”
What does this mean? It means that the fiduciary acts on behalf of the client, putting the clients’ interests ahead of his/her own, with a duty to preserve good faith and trust. Accordingly, the real estate agent or broker, as a fiduciary, is bound both legally and ethically, to act in the best interests of the client. What does this mean? It means that the fiduciary agent must help you to find the right property for, and help to negotiate its purchase, with the interests of neither his or her commission, nor the interests of the seller, in mind. Loyalty to your needs in the transaction are your agent’s chief concern when s/he is acting as your fiduciary.
If you interview agents as potential employees before looking for property, you can decide which agent will be the best “fit” for you. You may want to sign a buyer-broker agreement that guarantees you will work only with that agent, and that s/he will receive a commission when you purchase a property. You can specify in the agreement that there will be no “dual agency” where the agent represents both buyer and seller. In turn, the agent agrees to act as your fiduciary, working to help you to find and purchase the right property for you. Think about this as you are tempted to call the agent shown on the sign in front of the house you have stumbled upon: the agent on the sign has a contract to sell the property for the owner, which means that his or her fiduciary duty isto the seller, and cannot possibly be to you, the buyer!
Some highly experienced real estate agents are able to do an excellent job of managing dual agency by being absolutely honest with both seller and buyer, without revealing facts that may affect the price paid or accepted for the property. However, most highly experienced agents would prefer to separate fiduciary duties, are in favor of buyer-broker agreements, and will even volunteer to find another agent to represent you if they are the listing agent. Ask as you shop for an agent!
As with any investment, if you do your homework, you will be able to protect your own interests by hiring a real estate agent who will act as your fiduciary as you select and purchase your property in Puerto Peñasco / Rocky Point! Welcome to Paradise!