Agency relationship is that relationship created when one person or entity, the customer, delegates to another, the agent, the right (and privilege) to act on the customer’s behalf.
An agency relationship gives rise to a fiduciary relationship. This requires the agent, as the fiduciary of the customer, to honour certain duties, obligations and high standards of good faith and loyalty, professionalism and skill, and integrity.
Bottom line as an expert dealing with industry outsiders, you are in a position of trust, and are being trusted.
How you conduct yourself does not only reflect on your reputation. You also carry the flag for the rest of the industry. So observe the Golden Rule, and treat others how you would like to be treated.
Agent and agency relationship dos
- Exercise transparency and err on side of over-disclosure i.e. eliminate grey around fees
- Avoid or communicate conflicts of interest – rule of thumb: serve the person or entity who is paying your fee
- Honour your position of trust and responsibility – transactions are high in value, carrying significant financial consequences for your customer. If you provide bad advice, act negligently, or are incompetent, this can result in significant financial pain for your client. So be extra careful, at all times.
- Commercial property is complicated, and an informed and empowered customer is a more trusting and supportive customer. Do attempt to educate and inform your customer, and eliminate confusion where it may exist.
Agent and agency relationship do nots
- Never “horse-trade“
- Don’t get undisclosed kick backs
- When tasked with data analysis, don’t provide incomplete information to your customer, or perform half jobs
- Don’t be incompetent. In every interaction you are flying the flag for the industry. Aim to be responsive, and turn deliverables around fast
- Do not be swayed by or induced into providing clients with suboptimal options due to higher fees or commissions