5 Things You Should Understand About Agency
1. Seller Agents or Listing Agents Work For The Seller
By law, a seller’s agent or listing agent are working for the seller and in their best interest. In other words, seller agents cannot do or say anything that will hurt the seller. Their main objective is to attract potential buyers, negotiate on the seller’s behalf, and to get the best price and terms possible.
2. Buyer’s Agents Work For The Buyer
By law, a buyer’s agent works for the buyer and in the buyer’s best interest. Their fiduciary duties lie solely with the buyer. In other words, buyer agents cannot do or say anything that will hurt the buyer. Their main objective is to conduct due diligence on properties, negotiate on the buyer’s behalf, share comparable sales, provide price opinions, and strategize on offer negotiations. The ONLY way this is possible under the law is for the buyer to retain the services of one exclusive agent through an Exclusive Right To Represent contract.
3. Broker Agents Are Sub Agents To The Seller’s Agent
When a buyer asks an agent to show them a listing that is not theirs, but has not yet retained that agent as their exclusive representative, that agent is called a “broker’s agent.” By law, the broker’s agent is a sub-agent to the seller’s agent, and therefore, by extension, represents the interests of the seller. A broker’s agent cannot say, disclose or do anything that will hurt the seller or work in the buyer’s favor.
4. You Can Be Considered A “Client” Or A “Customer”
As a home buyer or seller in New York State, you are considered either a “client” or a “customer.” Clients are people who have hired an agent or retained the services of an agent to be their exclusive representative in their home buying or selling experience. Customers are people who have NOT hired an agent to represent them in their home buying or selling experience. As a client, you have an agent who is working exclusively for you and in your best interest. Agents can share any and all information they have with their client, and must protect their own client’s confidentiality. As a customer, you do not gain those benefits. As a customer you work with several agents, but you do not have any representation. Agents are limited by law in the information they can share with customers. Think of it the way you would retaining an attorney. When you retain one attorney to represent you, that attorney becomes YOUR lawyer and representative. Without that, they are just “a lawyer” and do not represent you.
5. Buyer Agents Can Do More For Their Buyer Clients
If you are a buyer, an agent that you have hired to become your representative can do a lot more for you than simply working with various agents. Remember that retaining one agent makes you a client, rather than a customer. Buyer agents can share comps, price opinions, market data, and inside information with their clients (not with their customers) that they cannot share with people who are merely customers. That’s the law! Seller agents and broker agents cannot share comps, price opinions, market data, or inside information with buyers UNLESS it helps justify the price that the seller is asking.