Friday, February 3, 2017

Who is Representing Me?

Since January 2011, disclosure of relationships has changed. No we haven’t gone back and hacked your sweet love poems from yesteryear, although that one letter was hella’ smooth. We’re talking about the other important relationship in your life, the one with your real estate broker. When hiring a real estate agent you enter into a fairly close relationship – think about it, you are going to be talking and dealing with this person for months in one of the most important transactions of your life. There needs to be trust and you need to feel comfortable. You’ll be sharing pretty intimate details of your wealth, so confidentiality is critical – i.e. you need someone you can trust.

In January 2011, NYC placed into law a requirement that real estate brokers must keep agency disclosure forms on file for a minimum of three years. This is a directive from the DOS (Department of State) to protect all parties involved in any and all residential real estate transaction. The NY Times wrote about A New Broker Disclosure Law in New York, enlightening the public that real estate agents are required to discuss agency and the contents of this form once there is “substantive interaction” such as  a buyer talking about making an offer or learning more about a property.

Where there is a great deal of confusion is during an open house where the direct buyer, who is not represented by a buyer's broker, walks into an open house and receives helpful information from the listing agent. At this point, it may seem as if the listing agent is representing the buyer, but nothing could be further from the truth. The listing agent represents the seller and has a fiduciary duty to the seller. This is one of the main reasons that you need to understand your relationship and also why it's a good idea to hire a buyer's broker.
The Agency Disclosure form is not a contract, but rather a disclosure form that clarifies the relationship of the listing agent and the buyers broker.  It signifies the agents fiduciary duty and speaks to other important aspects of the relationship like undivided loyalty, obedience, full disclosure, confidentiality and duty to account. It is here to protect you as a consumer. So, the next time you attend an Open House or engage in a conversation with a real estate agent, remember to ask the most important questions, “Who do you represent?”.

Upon reviewing the Agency Disclosure Form, let us know if you have any questions and/or would like clarification about a specific circumstance.

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