What's that first form I'm signing? - Agency Disclosure
It’s the law!

The Agency Disclosure form is used to inform the buyer or seller of real estate, exactly who the real estate agent works for (ie: the buyer or the seller). Therefore, it is important that you receive and sign it as a first step in dealing with any real estate agent. -- and by the way it is New York State Law to receive it. This law and process is aimed at protecting your interests, so don't be concerned with signing this document. If you don't receive it, then do be concerned and demand it!

Buyers and sellers have polar opposite goals in a sales transaction. The buyer wants the most product for the least amount of money and the seller wants the most money for the given product. Finding a suitable home for a buyer is every real estate agent's hope (that's how they make a living) and getting to know the buyer's wants and needs is an absolute requirement to succeeding in this important task. Unfortunately, buyers and sellers oftentimes are not aware of the legal requirements that govern real estate agents and more importantly, who they actually work for. The Agency Disclosure form tells you who your real estate agent works for and the following information defines what that means, exactly (as well as some of the history behind it all).

Historically, all real estate agents have legally worked for the seller. The listing agent or office is the one the seller hired personally to represent them. Other agents (the actual sales agent) and offices worked as “sub-agents” of the listing office also working for the best interest of the seller. In New York, agency disclosure became law in the early 1990’s and at that time it was required that all agents disclose to buyers and sellers that they were really working in the best interest of the buyer or seller. It truly was caveat emptor - "Buyer beware". (it had been all along, only now, everyone had to be told about it!)

With the arrival of agency disclosure laws, a few agents began working for buyers as “buyer agents” and representing buyer’s best interests. Some offices even began representing only buyers in the transaction. They became exclusive buyer agents and never worked for the seller. Other offices represent both sellers and buyers, but normally a given agent will only represent either the buyer or seller - which must be clearly stated and documented to the buyer or seller. Once the agency is disclosed to the buyer or seller -- and the Agency Disclusure form is signed -- the sales agent is strictly governed by law to act in a specific manner (stated in the next section).

NEW YORK STATE LAW
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.

SELLER'S OR LANDLORD'S AGENT If you are interested in selling or leasing real property, you can engage a real estate agent as a seller's agent. A seller's agent, including a listing agent under a listing agreement with the seller, acts solely on behalf of the seller. You can authorize a seller's or landlord's agent to do other things including hire subagents, broker's agents or work with other agents such as buyer's agents on a cooperative basis. A subagent, is one who has agreed to work with the seller's agent, often through a multiple listing service. A subagent may work in a different real estate office.

A seller's agent has, without limitation, the following fiduciary duties to the seller: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and a duty to account.

The obligations of a seller's agent are also subject to any specific provisions set forth in an agreement between the agent and the seller.

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.

BUYER'S OR TENANT'S AGENT If you are interested in buying or leasing real property, you can engage a real estate agent as a buyer's or tenant's agent. A buyer's agent acts solely on behalf of the buyer. You can authorize a buyer's agent to do other things including hire subagents, broker's agents or work with other agents such as seller's agents on a cooperative basis.

A buyer's agent has, without limitation, the following fiduciary duties to the buyer: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and a duty to account.

The obligations of a buyer's agent are also subject to any specific provisions set forth in an agreement between the agent and the buyer.

In dealings with the seller, a buyer'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 buyer's ability and/or willingness to perform a contract to acquire seller's property that are not inconsistent with the agent's fiduciary duties to the buyer.

BROKER'S AGENTS As part of your negotiations with a real estate agent, you may authorize your agent to engage other agents whether you are a buyer/tenant or seller/landlord. As a general rule, those agents owe fiduciary duties to your agent and to you. You are not vicariously liable for their conduct.

AGENT REPRESENTING BOTH SELLER AND BUYER A real estate agent acting directly or through an associated licensee, can be the agent of both the seller/landlord and the buyer/tenant in a transaction, but only with the knowledge and informed consent, in writing, of both the seller/landlord and the buyer/tenant.

In such a dual agency situation, the agent will not be able to provide the full range of fiduciary duties to the buyer/tenant and seller/landlord.

The obligations of an agent are also subject to any specific provisions set forth in an agreement between the agent and the buyer/tenant and seller/landlord.

An agent acting as a dual agent must explain carefully to both the buyer/tenant and seller/landlord that the agent is acting for the other party as well. The agent should also explain the possible effects of dual representation, including that by consenting to the dual agency relationship the buyer/tenant and seller/landlord are giving up their right to undivided loyalty.

A BUYER/TENANT OR SELLER/LANDLORD SHOULD CAREFULLY CONSIDER THE POSSIBLE CONSEQUENCES OF A DUAL AGENCY RELATIONSHIP BEFORE AGREEING TO SUCH REPRESENTATION.

GENERAL CONSIDERATIONS You should carefully read all agreements to ensure that they adequately express your understanding of the transaction. A real estate agent is a person qualified to advise about real estate. If legal, tax or other advice is desired, consult a competent professional in that field.

Throughout the transaction you may receive more than one disclosure form. The law requires that each agent assisting in the transaction to present you with this disclosure form. You should read its contents each time it is presented to you, considering the relationship between you and the real estate agent in your specific transaction.

Here is what the Agency Disclosure form looks like....

ACKNOWLEDGMENT OF PROSPECTIVE BUYER/TENANT
AND SELLER/LANDLORD TO DUAL AGENCY

1. I have received and read this disclosure notice.
2. I understand that a dual agent will be working for both the seller/landlord and buyer/tenant.
3. I understand that I may engage my own agent as a seller's/landlord's agent or a buyer's/tenant's agent.
4. I understand that I am giving up my right to the agent's undivided loyalty.
5. I have carefully considered the possible consequences of a dual agency relationship.
6. I understand that the agent presenting this form to me,

______________________________________________________________________of
(name of licensee)
______________________________________________________________________is
(name of firm)

a dual agent working for both the buyer/tenant and seller/landlord, acting as such with the consent of both the buyer/tenant and seller/landlord and following full disclosure to the buyer/tenant and seller/landlord.

ACKNOWLEDGMENT OF THE PARTIES TO THE CONTRACT

1. I have received, read and understand this disclosure notice.
2. I understand that _____________________________________________________of
   (name of real estate licensee)
   ____________________________________________________________is
   (name of firm)

(Check applicable relationship)

(Check applicable relationship)

We hope that this information helps you understand this really important process. If you have questions, please write us or call!

* * *

The information included at this site, or received from this site, may not be applicable to every situation. Every property, market and personal situation is unique. The formulation of an effective property marketing or purchasing strategy requires careful analysis and planning with a real estate professional. The authors make no representation or guarantees through the presentation of this information. Federal, New York State and local laws prohibit discrimination because of race, color, sex, religion, age, national origin, marital status, familial status or disability in connection with the sale or rental of residential real estate. Coach Realtors does not knowingly accept advertising on this website in violation of these laws. Coach Realtors will not be responsible for misinformation, misprints, typographical errors, etc., which appear on this web site. All offerings are subject to errors, omissions, prior sale, change of price, or withdrawal with or without notice. All facts should be independently verified by prospective purchasers.