“New York state law requires real estate licensees who are acting as agents of buyers or sellers of property to advise the potential buyers or sellers with whom they work of the nature of their agency relationship and the rights and obligations it creates.” -NYS Department of State
What does this mean to the Buyers or Sellers of real estate? If you have looked at residential real estate or listed a property in recent years, your agent probably asked you to sign an agency disclosure form. All Real Estate Agents licensed in the State of New York are required to disclose their agency relationship and present customers with a disclosure form when assisting with a residential real estate transaction. In my experience, Buyers usually understand that a Listing Agent represents the Seller. However, many Buyers do not realize that properties are actually listed with the real estate company, not the Listing Agent. Therefore, every agent with the same real estate company represents the Seller for every property listed with that company. The Listing Agent is more or less the Seller’s contact person within the office and is often the party that negotiates on the Seller’s behalf.
Does this mean that a Buyer has fallen in shark infested waters when they find themselves looking at a property with an Agent that represents the Seller? No. NY Licensing law dictates the following:
“In dealings with the buyer, a seller’s agent should (a) exercise reasonable skill and care in performance of the agent’s duties; (b) deal honestly, fairly and in good faith; and (c) disclose all facts known to the agent materially affecting the value or desirability of property, except as otherwise provided by law.”
This means that as an Agent, if I am aware of a problem with the property I must inform the Buyer, regardless of whom I represent. I can not, however, inform the Buyer of circumstances that would cause the Seller to be unusually motivated to accept a lower offer (without the Seller’s consent). Here are a few examples “The Sellers are in the middle of a nasty divorce, they’d take just about anything to get rid of this house!” or “This house is listed at $299,000 but they told me they would accept $250,000.” Sharing this information would be to my client’s detriment and would encourage the Buyer to make a lower offer. Conversely, Buyers should not give a Seller’s Agent reason to believe they would pay more than their current offer. Buyers should not disclose circumstances that would cause them to be unusually motivated to buy. If they do, the Seller’s Agent is obligated to share this information with the Seller.
There are many reasons why a Buyer may have a better experience working with the Listing Agent. Usually the Listing Agent knows quite a bit about the property as they have had the opportunity to discuss it at length with the Seller. As an agent, I love the opportunity to assist both parties because I believe it makes for a smoother transaction. Having another party involved complicates communication and may cause the emotions and concerns of either side to be lost in translation. Knowing the personalities of those involved, I can usually dissuade someone from making an offer or counter-offer that I know will be ill-received and possibly offensive to their counterpart. It is critical for a transaction to commence in a pleasant and amicable manner; otherwise the months to follow can be a nightmare for everyone involved. Since many homes in the Adirondacks are second homes, furnishings and recreational equipment are often part of the negotiations. It’s much easier to mediate when I have a direct dialog with both sides. The knowledge that a particular item is of importance to one of the parties allows me to make sure that all parties walk away from the transaction satisfied. I sincerely believe that Buyers should not be discouraged to work with the Listing Agent on the purchase of real estate. They just need to have a clear understanding of whom the agent represents.