Seller’s Brokers and You – A Broker Conflict Of Interest.
Buyer Brokers, brokers who represent the buyer, have a 100% fiduciary duty to the BUYER. Buyer Brokers just until recently under the law and broker rules worked for the seller. Now buyer brokers have no obligation to the seller. Just the buyer. This gives the buyer more confidence that their broker is finding Real Estate NYC in their best interests.
There was a major change recently to the rules that govern how real estate brokers represent their clients. Up until then, buyer brokers owed their fiduciary duty to the seller. That is still the law in much of the country. But as of January 1 of this year buyer brokers have a fiduciary duty to the buyer. What has not changed is that the seller continues to pay the full commission. The buyer pays no commission for Real Estate NYC. The relevant text of the new law: “A buyer’s agent is an agent who is engaged by a buyer to represent the buyer’s interests. The buyer’s agent does this by negotiating the purchase of a home at a price and on terms acceptable to the buyer. A buyer’s agent has, without limitation, the following fiduciary duties to the buyer: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A buyer’s agent does not represent the interest of the seller.”
The new law also makes it clear that an agent that represents the seller owes their fiduciary duty only to the seller. The new law states: “A seller’s agent has, without limitation, the following fiduciary duties to the seller: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and duty to account. A seller’s agent does not represent the interests of the buyer.”
If a broker represents the seller and the buyer of Real Estate NYC in a transaction the law makes it clear that this is a conflict of interest for the broker. The seller’s broker in this case must get the written consent of both the buyer and seller after explaining to both “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.” The seller will continue to pay the full commission, which gets split between the seller’s broker and buyer’s broker. The buyer does not have to pay any commission. Some buyer think they can get a price discount by dealing directly with the seller’s broker. In fact they almost always pay more. This post goes into detail on this:http://portal.sliderocket.com/BEDDJ/Benefits-of-a-Buyer-s-Broker-
The new disclosure form that the law requires to be completed when there is a conflict of interest is here: http://www.dos.state.ny.us/forms/licensing/1736-a.pdf