Sep
01

Who Represents Your Best Interests When Buying A Co-op or Condo in Manhattan?

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If you are planning to buy or thinking about buying an apartment in New York City, it’s smart to get expert help from the beginning. Touring apartments is just the beginning; buying one is more complicated.

If you tour open houses, you’ll meet real estate agents, virtually always the seller’s agents.  There are several different kinds of agents and it’s important to know the how they work.

Listing Agents

Listing (or seller’s) agents are the ones with whom the seller has listed his or her property. A seller’s agent promises to take reasonable care, provide undivided loyalty, confidentiality, full disclosure, obedience and duty to the seller. That means their top priority is to show the property in its most favorable light and negotiate the highest price and terms for the seller. In other words, the listing agent owes complete fiduciary responsibility to the seller.

Buyer’s Agent

Conversely, the buyer’s agent is engaged by the buyer to represent his or her interests.  The buyer’s agent is completely motivated to make sure that you get the best possible deal.  He or she negotiates the purchase of the home you want at a price and on terms most favorable to you.  A buyer’s agent promises to take reasonable care, provide undivided loyalty, confidentiality, full disclosure, obedience and duty to the buyer.  In other words, he owes complete fiduciary responsibility to the buyer.

Dual Agent

A real estate broker may represent both the buyer and seller if both buyer and seller give their informed consent in writing.  For example, if you visit an open house, you might meet the seller’s agent as you tour the home.  Should you decide to buy – or make an offer on – the property, you might ask that agent to represent you.  In that case, the agent will not be able to provide the full range of fiduciary duties to both buyer and seller.  The agent must explain the possible effects of dual representation, including that by consenting to the dual agency relationship the buyer and seller are both giving up their right to undivided loyalty.  A buyer should carefully consider the possible consequences of a dual agency relationship before agreeing.

Dual Agent with Designated Sales Agents

If the buyer and seller provide informed consent in writing, the real estate brokerage firm may designate a sales agent to represent the buyer and another sales agent to represent the seller to negotiate the purchase and sale of the property.  A designated sales agent cannot provide the full range of fiduciary duties to the buyer or seller.  The designated agent must explain that like the dual agent under whose supervision they function, they cannot provide undivided loyalty.

So if you are a buyer, a listing or seller’s agent can not advocate for the best deal you can get.  If the seller has an agent totally dedicated to their interest, buyers should strongly consider working with agents who are totally dedicated to ensuring that they get the best possible deal.

New York State law is crystal clear and requires disclosure regarding real estate agency relationships and the rights and obligations it creates.

As always, if you need legal, tax or other advice you should always consult with a professional in that field.

Comments

  1. Thanks a lot because you clearly defined and discuss the topic well. i hope there's a lot more informative blog to post.