A fiduciary is a person or entity that has a legal and ethical obligation to act in the best interest of another party — putting the other party's interests ahead of their own. This is the highest standard of care recognized by law and carries significant legal consequences if breached. In real estate, several key participants in a transaction hold fiduciary responsibilities, and understanding who owes you a fiduciary duty helps you know whom to trust during the process.
The fiduciary duties commonly recognized in real estate include: loyalty (putting the client's interests first), confidentiality (protecting the client's private information), disclosure (revealing all material facts that could affect the client's decisions), obedience (following the client's lawful instructions), reasonable care (exercising skill and diligence appropriate to the role), and accounting (properly handling and reporting on all funds and property entrusted to the fiduciary).
Real estate agents owe fiduciary duties to their clients — a listing agent to the seller and a buyer's agent to the buyer. This means your agent should negotiate in your best interest, disclose information that could affect your decisions, protect your confidential information, and never steer you toward a transaction that benefits them at your expense. An escrow agent and settlement agent owe fiduciary duties to all parties, acting as a neutral custodian of funds and documents. Trustees owe fiduciary duties to the beneficiaries of the trust.
A breach of fiduciary duty is a serious legal matter. If your real estate agent fails to disclose a known defect, an escrow agent mishandles your funds, or a trustee uses trust property for personal gain, the injured party can sue for damages. Courts take fiduciary breaches very seriously, and in some cases, punitive damages may be awarded in addition to compensatory damages.
At closing, the title company's settlement agent acts as a fiduciary to all parties in the transaction — ensuring that documents and funds are handled properly, that all obligations are met, and that no party is unfairly disadvantaged. At Beycome Title, our closing coordinators take this responsibility seriously. We maintain strict fund handling procedures, transparent accounting, and impartial service to every participant. Get your free closing estimate from a team you can trust.