What the Law Says About Buyer Agency
Comments by the NY Secretary of State concerning
Alexander "Sandy" Treadwell, the New York Secretary of
State, made the following comments in a section of the April, 1998,
issue of Realtor Magazine titled: "Ask the Secretary".
The Question: "My real estate firm has several
offices and a number of sales associates, who are licensed either as
associate real estate brokers or real estate salespersons. In addition,
my firm represents both buyers and sellers. From time to time, however,
one of our buyers will express an interest in a property that is listed
with our firm. Can I designate one of my sales associates to represent
the buyer and another to represent the seller?"
The Answer: "Under the following circumstances,
you can designate one of your agents to represent the buyer and another
to represent the seller. You must, of course, make full disclosure to
both the buyer and seller, and you must obtain their informed consent to
the arrangement prior to appointing the designated agents."
"When a buyer expresses interest in a property listed
with your firm, you must obtain the consent of both the buyer and seller
to proceed as a dual agent, and you use the "Agency Disclosure" form for
that purpose. At the same time, you can explain the benefits of
appointing a designated agent for the buyer and another for the seller."
"If, after full disclosure, the buyer and seller agree
to such an arrangement, you can, then, appoint the designated agents. If
designated agents are appointed, the firm continues as a dual agent
representing both the buyer and seller in the same transaction. The
designated agents, however, will, by virtue of the new agreement with
the buyer and seller, function as single agents giving undivided loyalty
to their respective clients."
"If effected properly, an agreement for the appointment
of designated agents does not violate any provision of Article 12-A or
the rules of the Department of State. That is, of course, premised on
(1) making full disclosure to the buyer and seller and (2) obtaining the
informed consent of both. In addition, to avoid future
misunderstandings, it is good practice to reduce these agreements to
writing, and to provide all of the parties with a signed copy.”