Broker Exam: Dual Agency and Designated Sales Associates

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Services for Real Estate Pros with Tann Starr & Associates, Inc.

Broker Exam: Dual Agency and Designated Sales Associates

 

I'm studying for the Broker's exam for two states simultaneously and I am trying not to mix up FL law with NY law. I am currently interested in the revised New York State statutes regarding the definition of "Designated Sales Associate." According to the law text, a Designated Sales Associate is "a licensed Real Estate Salesman or Associate Broker, working under the supervision of a Real Estate Broker, who has been assigned to represent a client when a different client is also represented by such real estate broker in the same transaction."

BTW, Florida law prohibits Dual Agency.

In sum and substance, any New York State Real Estate Broker acting as a Dual Agent will be able to assign Real Estate Sales Associates and/or Associate Brokers as representatives for each party to the transaction. Different reps must be used, it can not be the same agent for both parties.

The two main issues arising from a Dual Agency situation include (1) the consumers not being "afforded all fiduciary duties inherent in a single agency arrangement" and (2) the firm/agents "cannot provide the fiduciary duty of undivided loyalty." The New York revised agency disclosure forms now contains a new disclaimer to this fact.

For more information, readers can go to this link to two agency disclosure forms:

http://www.dos.state.ny.us/lcns/realestate.html.

BTW, each New York disclosure form is required to be printed as a single page, double-sided form by law.

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C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

Conrad, I think they were wise in structuring it that way. It will give brokers/agents a pause button to think about what they are doing and how they would like for a project to be handled. I've been leaning more towards being a buyer's broker than listing agent because my personality is more mobile than stationary (LOL). I also discovered that when I do list a property a few of the sellers have called me back within a week to also go into a buyer's brokerage agreement to find them something new pending the sale of their current property. When this does happen, I must be very careful to ensure that even the appearance of a conflict of interest does not exist. I work very hard to try and get the seller the best price for their property and would not want to ever be accused of trying to get a seller to accept an offer just to close so I could then sell them something else (double commission motivation). Dual agency has a way of putting a firm on the hot seat if a client decides the project didn't go well for them, which is why I believe we must really learn the ramifications of participating in such an event.

Sep 30, 2008 09:04 AM #13
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C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

Paddy, Sprench? Way too freakin' funny! Haaaaa!

I suppose I could do one license at a time, but I seem to do better when I have something to compare concepts to. I have to go to 100 Williams St for the FL exam and 123 Williams St for the NY exam. I figure why waste paying for parking when I can schedule them both for same day and hang out in Manhattan with Audrey and Cindy (LOL).

Sep 30, 2008 09:46 AM #14
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C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

Bonnie, I am still reading this, so I will have to get back to you with the correct answer. I hope to be able to answer you soon Veronica. :-)

Sep 30, 2008 10:12 AM #15
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C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

William, very cool. Thank you. :-)

Sep 30, 2008 10:15 AM #16
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C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

Gary, things are tough and a number of brokers in my office are doing this. Once we found out FL statistics reveal a significant number of agents and brokers are not renewing their licenses I figured it would be lovely to step into that void, especially since my government friends are going there to retire. I would love to sell their homes up here and relocate them down there. We've vacationed in Brevard County for 19+ years, own land and have relatives and friends there. Also, there are quite a few CC members I can give referrals to. Since I'll still be practicing in NY it would be nice to be able to send my friends up here to my friends down there until we build our little brokerage house. :-)

Sep 30, 2008 10:23 AM #17
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C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

Nancy, very cool. After you have six months as a sale associate you can take the on-line classes for FL broker (but you will not be able to get the license until you have passed the school, exam, passed the state exam and have one year as a sales associate in NJ). Don't wait. Study hard! Best of luck, sweetie. :-)

Sep 30, 2008 10:31 AM #18
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C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

Thank you Jesse. With the little minions around, it certainly is challenging. Stephen has been "impossible" lately. All he wants to do is sit on my lap, get kissed, them slap me silly with hot wheel cars (LOL). What is up with that? I shall be blogging about him again shortly. Dude thinks he's supposed to be at the office all the time now. :-) 

Sep 30, 2008 10:34 AM #19
Rainmaker
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Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

Dual agency is permitted in CA with written permission and disclosure. The way this works is, say, a buyer signs a buyer broker contract with her agent. Her agent sells her own listing or maybe a listing of another agent under the same broker, doesn't matter. The purchase contract has language buried that says if dual agency occurs, the parties, by signing the contract, agree to it. And of course it's disclosed because page 7 clearly states which broker represents whom. It's sort of a smoke and mirrors. Consuming don't really know what is going on, unfortunately.

elizabeth weintraub sacramento real estate agent in land park

Sep 30, 2008 10:40 AM #20
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C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

Jane, you really crack me up (LOL). I'm hooking up with an associate broker in my office who is going to teach me how to do more complicated commercial deals. I'm very excited about that. I would like to go beyond the five and six family with stores multi-use properties and grab an entire condo complex or large apartment building. I've been studying the material at Trump U and have to say I am enjoying the idea of enlarging my territory. I'm discovering being a broker is a completely different mentality from being a sales associate. I have so much to learn about this business. Thank God I've got a really cool coach and a couple of mentors to steer me in positive directions. :-)

Sep 30, 2008 10:52 AM #21
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C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

Elizabeth, it's like a double edged sword. When done properly it can be a very good thing, but if not - oh my word... what a mess. I'm trying to be very careful. I'm keeping some customers as customers and becoming very picky about who I will accept as a client. :-)

Sep 30, 2008 10:56 AM #22
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Celina Gleason
AgentOwned Realty - Manning, SC

South Carolina still allows single agent dual agency, but only with full disclosure from a couple of document sources.  I have actually been in this position and all deals worked beautifully.  The buyers were already clients of mine and I wasn't about to give them up to someone else forever.  These were great investors who wanted and deserved representation, and I knew full well that they would buy from me again.  Only tight rope I had to walk was with the information I was able to share with both parties.  I don't usually like to get into this situation and will keep buyers as customers if possible, but no way am I turning down business for fear of "what if"!  If I do my job, it will work.

Sep 30, 2008 11:24 AM #23
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C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

Celina, thank you for the insight. I will be going for my SC license soon. There are no brokerage houses in Greeleyville, so I figured I'd set up near my parents. I just have to decide whether to use the Salters property or one of the fields we own. My sister also has a store there and she said I could set up on her property if I'd like. I'm thinking that would be the easiest way to do it. Looking forward to trying to catch up with you when we go down in Dec for a visit. :-)

Sep 30, 2008 11:30 AM #24
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Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

Carolynn - Best wishes with the exams.  Do you spend the winter month in Florida?  I know many New Yorkers are licensed in NY and Florida.

Sep 30, 2008 10:49 PM #25
Rainmaker
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Cristal Drake
Prudential California Realty - Fullerton, CA
Realtor - Fullerton Real Estate

Girl!  Everything you have going on and now Double Broker Licenses!?  I don't know how you do it and had no idea that Fl did not allow dual agency.  Truthfully I think it is better that way anyhow!

Oct 01, 2008 12:27 AM #26
Rainer
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Elizabeth Nieves
The Elizabeth Nieves Realty Group - Durham, NC
Bilingual Raleigh - Durham North Carolina Real Estate Team

So interesting the differences from state to state. I understand that NC real estate law is different than most states. I don't know how you are keeping it straight! Good luck and GBU!

Oct 01, 2008 12:45 AM #27
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C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

Jennifer, we run down at least twice a year, usually during the spring and fall, but we have gone down once in the winter. We didn't like coming back to extreme temperatures after enjoying such mild weather so we decided not to do that again unless we really want to spend Christmas and New Years with our families. We're talking about heading down in Dec but haven't finalized any plans yet. I guess we have to get our school schedules together first.

Oct 01, 2008 09:38 AM #28
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C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

Cristal, there are days when I don't know if I can get anything done, then there are days when I get everything out one two three. When minions are in the mix you learn how to bang it out as fast as you can and keep moving (LOL). I see a lot of potential in FL because of the massive upheaval going on and the migrating patterns of retirees. I'm following the money. I do a lot of research on baby boomers. I want to go where they want to be. :-)

Oct 01, 2008 09:44 AM #29
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C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

Thank you Elizabeth N. I am actually doing my notes in Excel and making comparison charts side by side with the state headers on the top row. I sit with my books open and pick a topic and then take notes only on that topic from each state.

Oct 01, 2008 09:47 AM #30
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Fred Chamberlin
Guild Mortgage Co - Oak Harbor WA - Oak Harbor, WA
Oak Harbor/Whidbeynulls, #1 Experienced FHA Mortgage Consultant

Carolyn, I think avoiding dual agency is a good idea. In Oregon, the Realtor can represent both sides and be the loan officer all at the same time. Now, that is something that I would definitely worry about.

Oct 01, 2008 01:46 PM #31
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C Tann-Starr
Tann Starr & Associates, Inc. - Flushing, NY

Fred, that would make me very nervous. God bless the person who could handle all of those details and balance the many needs of everyone. It takes a special type of detailed oriented person to pull that off. I imagine there would be disclosure hell involved... (LOL) The paper chase on that file would be amazing! :-)

Oct 01, 2008 06:53 PM #32
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