What legal document creates a fiduciary relationship between a broker and a client?

A listing agreement is the legal document that establishes a fiduciary relationship between a broker and a client. This type of agreement outlines the duties and responsibilities the broker has towards the client, often referred to as the principal. In this relationship, the broker is obligated to act in the best interest of the client, which includes loyalty, confidentiality, and full disclosure of information relevant to the transaction.

By signing a listing agreement, the client grants the broker authority to represent them in selling their property, and the broker, in turn, agrees to perform certain services, such as marketing the property and negotiating on behalf of the client. This relationship is central to real estate practice as it forms the basis of trust and professional obligation, which is critical for effective representation in property transactions.

Other documents, such as purchase agreements and contracts for sale, typically deal with the transactional aspects of buying or selling a property but do not establish the fiduciary relationship itself. A disclosure statement may provide important information about the property and the transaction, but it does not create or define the fiduciary relationship between the broker and the client.