Dual Agency

Never sign anything without a lawyer.

He likely asked you to sign a disclosure form and was offering to act as a dual agent. By default, the broker is the agent of the seller and owes the buyer no fiduciary duties. The disclosure form is not a contract, but in many circumstances it may have many of the same effects as a contract.

If he was offering to be a dual agent - representing both you and the seller - then he was offering to put himself in a position of trust and confidence with respect to you. Thus, if he ever betrayed that trust and confidence, say, by acting to your detriment, he would be liable for any damage that caused. So, practically speaking, why would he want to do that?

The answer is money. He is already representing the seller, so if he represents you, too, he won't have to split his commission if you purchase. It gives him some comfort that he'll be taking his whole 6%, instead of the 3% that he'd get if you started working with another broker at some point before you go into contract.

That's not to say there's anything wrong with him wanting to make more money, of course. So long as he competently and faithfully represents you and the seller, these kinds of relationships work out just fine most of the time.
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Marco Santori is a lawyer in New York City, but he isn't your lawyer, and you should not rely on this post for legal advice. If you have any other questions, feel free to email at MSANTORI@NMLLPLAW.COM

I was wondering (I am not an attorney): if this really just an Agency Disclosure Form, shouldn't be handled separately from a buyer's agent contract? How is that they decided to give this form a double function while it should be supposed to provide consumer's protection. Hiring a double agent isn't the best way to be represented, I think and doing that while just getting disclosure isn't very transparent for the consumer, I guess. And also, if the buyer allows the listing broker to be dual agent, does that imply that he/she cannot hire another agent down the road if the dual agent is not giving fair representation?

MSantori is a lawyer, but he isn't your lawyer.
I'm O.K. with him giving advice on se on Sundays, weekends and evenings.
Thanks Marco.

Here is what the Department of State has to say about dual agency. I just blogged about this topic, that going it "alone" is not really the case (unless it is a FSBO). The seller has his/her broker representing him and you will be relying on the sellers broker to manage the deal. I do understand some people prefer this.

http://www.dos.ny.gov/cnsl/dualagcy.html

Keith Burkhardt
The Burkhardt Group

I might be wrong but I suspect that if a broker is representing both the buyer and the seller in a transaction, they are more likely to represent the interests of the seller over the buyer. They want to sell the property at a good price and the buyer's interests would likely come secondary to the broker just wanting to sell the property.
If there is a problem seeing an open house property in the future when you are at the open house just ask for the name of the supervising person at the seller's real estate agency and then call them from the open house. I suspect that you will encounter no difficulties seeing the property once someone else gets involved in this situation. Many times when I went on my own to see open houses, the seller's broker offered to help me find a property. I often did not choose to go with my broker to open house for several reasons including that she has small children and I didn't want to disturb her on the weekend and also the fact that I didn't need her to see an open house just to see apartments by appointment.

Happy to help!

A few points: the disclosure form (I think we're talking about the same document here) alone does not establish an exclusive agency relationship. Just because a buyer, for example, signs a disclosure form, that does not prohibit the buyer from working with other brokers. Typically, an exclusive representation contract will do this.

Also, if the broker is a dual-agent then he owes an undivided loyalty to both the buyer and the seller. Theoretically, that can happen without issue. In practice, though, there is little guidance available to a dual agent that might help that agent conform his actions to the law. I don't always wave the "You need a lawyer!" banner, but if you're a dual agent, consulting with an attorney *before* you make a tough decision is almost always worth the money.
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Marco Santori is a lawyer in New York City, but he isn't your lawyer, and you should not rely on this post for legal advice. If you have any other questions, feel free to email at MSANTORI@NMLLPLAW.COM.