How does an agent/broker avoid a breach of fiduciary duty to the seller if the broker already has an exclusive listing agreement with the seller?
The most important point of this answer is understanding the difference in fiduciary duty when a property is upside-down (loans in excess of value) and needs a short sale as opposed to a property with equity. In a short sale, the seller will not be allowed by the bank(s) to receive any proceeds of the sale. This makes the sale price irrelevant to the seller. The relevant outcome to the seller is avoiding a foreclosure on their credit record and having an orderly exit from the property. Therefore, the broker’s duty is to accomplish these results, as opposed to getting the highest price. The broker must evaluate how to accomplish these results.
