Does the public really understand what Dual Agency is? Do they care? Should they Care?
On January 1st in New York State a new Agency Disclosure form was approved. The intention of the new form is to make the language and definitions clearer to the public. The Agency Disclosure is really a consumer protection issue. Consumers need to understand who their agent represents, what information can be disclosed, what can't and most importantly why it matters. Most buyers just want to find a house and then buy it. The stress of finding the right community, the right commute, the right schools are foremost. Actually buying the house is just part of a very stressful process and too much to deal with for most buyers. I did want to share the wording from our new Agency Disclosure form regarding duals agents. I have various agents and how they explain Dual Agency to prospective buyers. "I will work to get the deal done" When they should be saying "you will be giving up your right to undivided loyalty".
A real estate broker may represent both the buyer and seller if both the buyer and seller give their informed consent in writing. In such a dual agency situation, the agent will not be able to provide the full range of fiduciary duties to the buyer and seller. The obligations of an agent are also subject to any specific provisions set forth in an agreement between the agent, and the buyer and seller. An agent acting as a dual agent must explain carefully to both the buyer and seller 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 and seller are giving up their right to undivided loyalty. A buyer or seller should carefully consider the possible consequences of a dual agency relationship before agreeing to such representation.
Dual Agency with Designated Sales Associates
If the buyer and seller provide their informed consent in writing, the principals or the real estate broker who represents both parties as a dual agent may designate a sales associate to represent the buyer and another sales associate to represent the seller to negotiate the purchase and sale of real estate. A sales associate works under the supervision of the real estate broker. With the informed consent of the buyer and the seller in writing, the designated sales associate for the buyer will function as the buyer' s agent representing the interests of the buyer and the designated sales associate for the seller will function as the seller's agent representing the interests of the seller in the negotiations between the buyer and seller. A designated sales associate cannot provide the full range of fiduciary duties to the buyer or seller. The designated sales associate must explain that like the dual agent under whose supervision they function, they cannot provide undivided loyalty. A buyer or seller should carefully consider the possible consequences of a dual agency relationship with designated sales associates before agreeing to such representation.