Make sure your documents match when you contract a listing... Agency designations matter.
If NY agents contract a specific commission with a seller, advertise a split, not file as a dual agent when working for both the buyer and seller on the same transaction, there is a distinct possibility one may discover that they may not be entitled to the percentage of payment they believe they earned for wearing two hats working hard on one deal. Markets are local and state laws vary, so some of the issues presented here may not pertain to a lot of people outside of NY.
If you do two jobs and value your time/work you may have an expectation to be compensated for holding down both positions. Everything is negotiable, however one should be careful to ensure that what one negotiates is clearly reflected in the contracts and documents accurately. When an agent's advertisement of compensation does not match what was authorized in the contractual agreement bad things might happen if (a) there was not a meeting of the minds or (b) a misunderstandings occurs based upon an erroneous belief of entitlement.
Brokers have an obligation to cooperate, not compensate, so if a Listing Broker negotiates a 4% fee split but advertises 2%, imagine the surprise of all when the LB finds a buyer yet does not receive the 4% fee assumed. For example:
To get this you really need to read that entire case. This isn't a post about squabbling over commissions and splits it is a post about MLS truth in advertising on all points of the listing and the issue of being very clear about who is being represented by whom in a real estate transaction and the ensuing bi-directional obligations agency triggers.
Agency is very serious business... The buyer's agent is not automatically a sub-agent of the seller and listing broker. Customers and clients choose who they want to represent them and we as agents either accept or reject those business relationships.
New York State law "requires real estate licensees who are acting as agents of buyers and sellers of property to advise the potential buyers and sellers with whom they work of the nature of their agency relationship and the rights and obligations it creates." Dual Agecy is permissible in New York State so if you have a listing and find the buyer for that listing and intend to represent both parties to the transaction NY agents have to remember a very important little detail: "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." http://www.dos.state.ny.us/forms/licensing/1736-a.pdf
Had the agent in the case previously cited had written consent from both parties in writing (and matching documents) there is a distinct possibility the expense of litigation might have been avoided because the seller would have been made aware of the complexity of doing twice as much work in order to facilitate the closing of escrow on the transaction. Sometimes sellers and buyers make erroneous assumptions regarding what we are and are not supposed to do for them. If we do not take the time to carefully explain ourselves to our customers and clients how will they be able to distinguish the true value we bring to the negotiation table?
Buyer's Agency is not a myth. It is an actual position recognized by the laws of agency governing real estate transactions. It is a separate and distinct form of representation which differs from the obligations of the Listing Agent. The Listing Agent has the best interests of the seller in mind and the Buyer's Agent has the best interest of the buyer in mind. The Dual Agent holds a complicated position as he or she concentrates on fair and honest dealings that balances the needs of both clients while efficiently and effectively facilitating a close of the transaction at hand.
Read page two of this PDF: http://www.dos.state.ny.us/forms/licensing/1736-a.pdf There are six hats for three categories of representation to choose from designated there. Each one is a distinct position that all agents should be aware of. If you do not understand what those positions entail as an agent, one would do well to have a consultation with their Broker-in-Charge and/or their MLS hot line attorney. You can pooh-pooh the thought if you want but if you deal with re-locations and referrals you may want to remember every member on the team may possibly suffer if the weakest link fails and litigation ensues because some people assumed instead of actually understanding and knowing the roles and obligations of agency relationships.
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