As a broker (securities) and a reasonably intelligent (grad school counts?) New Yorker (10 yrs) having rented now on four different occasions in NYC, I find myself really quite embarrassed (for myself and for the 'system') in not knowing the answer here: We've conducted our search entirely ourselves (early in process, have looked exclusively at listings posted on the major aggregator sites, e.g.... [more]
As a broker (securities) and a reasonably intelligent (grad school counts?) New Yorker (10 yrs) having rented now on four different occasions in NYC, I find myself really quite embarrassed (for myself and for the 'system') in not knowing the answer here:
We've conducted our search entirely ourselves (early in process, have looked exclusively at listings posted on the major aggregator sites, e.g. StreetEasy).
We found a unit on SE we thought very promising, contacted the listing broker (who works for one of the major listing firms, think DouglasElliman, Corcoran, etc and has the listing posted on his agent profile page at the relevant broker's website) for a showing.
Went to the showing, loved the unit.
Submitted a proposal (email) through the agent, heard back today that the owner 'accepted' our proposal 'in its entirety' and so now we need to fill out the building's application package (it's a condo building). So far so good.
In the 'congrats the owner accepted your offer' email the broker includes an agency disclosure form (disclosing that he represents the owner) and mentions that NY State "wants" him to tell us that he represents the landlord in the transaction. Also fine.
However the form is pre-filled out that he is representing us (checkmark) and acting as a "Dual agent" (checkmark). For those of you familiar with the form, there are also checkbox option which would indicate he is representing the landlord (not checked), and there is a checkbox option that it indicates 'Advance informed consent dual agency' (checked).
We never discussed him representing us or dual-representing both sides when we met him for the viewing or during the viewing, and we did not include any reference to broker fees in our email offer. If it matters, he was the one who originally requested we outline the general terms of our offer in an email.
Any reason we shouldn't correct this form before signing? Do we owe a broker fee here? Should we have been more explicit with him that we are representing ourselves? Should we have specifically said, 'we are submitting an offer but your fee is between you and the owner'?
Thanks,
Confused & Embarrassed
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Response by greensdale
over 12 years ago
Posts: 3804
Member since: Sep 2012
You may be confused, as you could make the case that the market is set up to confuse you, but why should you, be embarrassed?
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Response by Guywithcat
over 12 years ago
Posts: 329
Member since: Apr 2011
this document is standard fare when you dont use a broker as a buyer. And you certainly WONT owe a brokers fee as a buyer. The seller is paying his broker 5 or 6% and rather than split it with your broker (who you dont have), he is, ergo, keeping it all. If you feel concerned that there is a hidden cost for you in this regard that could pop up (almost ZERO chance of this but just to safe) then you should write him a note and get written confirmation, something better than email preferably. Go over his head if he balks. Most brokers are sleazy. Yes, most.
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Response by ccxz
over 12 years ago
Posts: 0
Member since: Apr 2013
If you are the buyer, you do not pay a broker's fee. Normally the seller pays 6% to the listing agent which, if you had an agent, would be split by the two agents. Dual agent just means the listing agent would get the whole 6%. You should check out the typical closing costs: http://www.elliman.com/reports-and-guides/guides/new-york-city/closing-costs
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Response by kharby2
over 12 years ago
Posts: 279
Member since: Oct 2009
I am an agent and have a paralegal certificate, just so you know the limits of my expertise. The law of agency is a big topic in law school and those of us who aren't lawyers cannot be expected to be experts on it. But real estate agents must understand how the law of agency pertains to their work.
A real estate agent is supposed to make clear at "first substantive contact" who the firm represents. You should have been presented with the Agency Disclosure Form when you first visited the apartment, not at this late stage. (It's not considered necessary to send the form if you just call the agent and ask about the size of the kitchen, say, and then decide not to view the place because the kitchen is too small. That's not substantive. But when money is being negotiated, it's substantive.)
That's the law as it has been taught to me by experts and attorneys in the field. And that's what I do.
Other agents I have encountered do two things that are not cricket: 1. they present the form long after the negotiations are done; and 2. they put in dual agency without any discussion whatsoever about agency with the consumer.
This is exactly what happened to my husband and me when we were trying to buy an apartment. Of course I was afraid to make waves for fear of losing the apartment because I wouldn't agree to dual agency. So, I made sure I had a clear series of emails between the agent and us in case my lawyer needed them later. (we were outbid, btw)
The reason agents put dual agency is because undisclosed dual agency is a big, huge, no-no. Some firms have apparently decided to have all their agents disclose dual agency, even if you meet the agent at an open house, where the presumption is the agent is working for seller/LL only. (Happened to us.)
This also simplifies things for the firm if they control most of the listings in a market niche. If you're not crazy about this apartment, they can immediately show you something else, without bothering with the pesky form and without working very hard to sell/rent the listing you met the agent at. Nice for agents, not so nice for sellers/LLs.
I am also concerned to read that you don't know at this point if you owe the brokerage a fee, or not. You might. You might not. But the fact that you've come to an accepted offer without knowing what the brokerage expects is wrong.
The difference between your kind of broker and my kind of broker is that I am a fiduciary for my clients, and you are not. That's the law. A fiduciary must take care of the client's needs above their own, which is why dual agency for fiduciaries is, to my mind, a bad thing for consumers in almost all cases. I personally never do it. It some states dual agency is illegal. You might find it interesting to read the entire form to see the hazards of dual agency as outlined there; and you can probably think of even more hazards.
Every agent reports to a manager/supervising broker. That might be someone you would like to speak with at this point.
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Response by Sonya_D
over 12 years ago
Posts: 547
Member since: Jan 2013
VERY good post by kharby2, thank you. You are the type of agent I'd like to work with.
Jimmyboy, you should READ and LEARN.
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Response by jim_hones10
over 12 years ago
Posts: 3413
Member since: Jan 2010
sounds like something he learned listening to me at one of my seminars.
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Response by Sonya_D
over 12 years ago
Posts: 547
Member since: Jan 2013
LOL, you don't give seminars, silly. You give people looking for Bushwick rentals bait and switch stories.
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Response by Guywithcat
over 12 years ago
Posts: 329
Member since: Apr 2011
I love how people just repeat things others have already said. And if he a PARALEGAL then I better call him for advice
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Response by CandE
over 12 years ago
Posts: 4
Member since: May 2013
Originally posted accidentally to Sales. If interested check rentals (same thread name) for discussion.
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Response by Sonya_D
over 12 years ago
Posts: 547
Member since: Jan 2013
Guywithcat,
Yeah!
("but, but... that's what I was going to say!!" LOL).
You may be confused, as you could make the case that the market is set up to confuse you, but why should you, be embarrassed?
this document is standard fare when you dont use a broker as a buyer. And you certainly WONT owe a brokers fee as a buyer. The seller is paying his broker 5 or 6% and rather than split it with your broker (who you dont have), he is, ergo, keeping it all. If you feel concerned that there is a hidden cost for you in this regard that could pop up (almost ZERO chance of this but just to safe) then you should write him a note and get written confirmation, something better than email preferably. Go over his head if he balks. Most brokers are sleazy. Yes, most.
If you are the buyer, you do not pay a broker's fee. Normally the seller pays 6% to the listing agent which, if you had an agent, would be split by the two agents. Dual agent just means the listing agent would get the whole 6%. You should check out the typical closing costs: http://www.elliman.com/reports-and-guides/guides/new-york-city/closing-costs
I am an agent and have a paralegal certificate, just so you know the limits of my expertise. The law of agency is a big topic in law school and those of us who aren't lawyers cannot be expected to be experts on it. But real estate agents must understand how the law of agency pertains to their work.
A real estate agent is supposed to make clear at "first substantive contact" who the firm represents. You should have been presented with the Agency Disclosure Form when you first visited the apartment, not at this late stage. (It's not considered necessary to send the form if you just call the agent and ask about the size of the kitchen, say, and then decide not to view the place because the kitchen is too small. That's not substantive. But when money is being negotiated, it's substantive.)
That's the law as it has been taught to me by experts and attorneys in the field. And that's what I do.
Other agents I have encountered do two things that are not cricket: 1. they present the form long after the negotiations are done; and 2. they put in dual agency without any discussion whatsoever about agency with the consumer.
This is exactly what happened to my husband and me when we were trying to buy an apartment. Of course I was afraid to make waves for fear of losing the apartment because I wouldn't agree to dual agency. So, I made sure I had a clear series of emails between the agent and us in case my lawyer needed them later. (we were outbid, btw)
The reason agents put dual agency is because undisclosed dual agency is a big, huge, no-no. Some firms have apparently decided to have all their agents disclose dual agency, even if you meet the agent at an open house, where the presumption is the agent is working for seller/LL only. (Happened to us.)
This also simplifies things for the firm if they control most of the listings in a market niche. If you're not crazy about this apartment, they can immediately show you something else, without bothering with the pesky form and without working very hard to sell/rent the listing you met the agent at. Nice for agents, not so nice for sellers/LLs.
I am also concerned to read that you don't know at this point if you owe the brokerage a fee, or not. You might. You might not. But the fact that you've come to an accepted offer without knowing what the brokerage expects is wrong.
The difference between your kind of broker and my kind of broker is that I am a fiduciary for my clients, and you are not. That's the law. A fiduciary must take care of the client's needs above their own, which is why dual agency for fiduciaries is, to my mind, a bad thing for consumers in almost all cases. I personally never do it. It some states dual agency is illegal. You might find it interesting to read the entire form to see the hazards of dual agency as outlined there; and you can probably think of even more hazards.
Every agent reports to a manager/supervising broker. That might be someone you would like to speak with at this point.
VERY good post by kharby2, thank you. You are the type of agent I'd like to work with.
Jimmyboy, you should READ and LEARN.
sounds like something he learned listening to me at one of my seminars.
LOL, you don't give seminars, silly. You give people looking for Bushwick rentals bait and switch stories.
I love how people just repeat things others have already said. And if he a PARALEGAL then I better call him for advice
Originally posted accidentally to Sales. If interested check rentals (same thread name) for discussion.
Guywithcat,
Yeah!
("but, but... that's what I was going to say!!" LOL).
Catguy seems to have a problem with articulation.