By John D. Allen Some Issues with Respect to Real Estate Brokers' Exclusive Right to Sell Contracts C aveat emptor is the expression of a well understood principle. It cautions the buyer to engage in due diligence to make sure that the terms of an agreement are understood before entering a contract. This principle has a corollary, namely caveat venditor . This principle, however, which cautions a seller to engage in due diligence to understand a contract before entering into it, is neither well understood nor generally followed. Your home is probably the most important and valuable asset that you will sell.
Brokers are anxious to help.
In fact, real estate brokers vigorously compete for opportunities to contract with you to list and sell your home. The reason is to earn a commission, which is usually a percentage of your home's sale price. This arrangement imposes a duty on brokers, which is fiduciary in nature, to faithfully represent the seller's interests. The problem, however, is that in practice a broker's self-interest can function so that the brokers advance their interests to the detriment of the sellers they have contracted to serve. It is preprinted.