Where Do Your Broker’s Loyalties Lie?

New legislature has just gone into effect to ensure the allegiances of a broker are always clear to the consumer. Real estate brokers are now required to present a form to potential buyers and renters disclosing who they are and how they’ll be acting on behalf of a client in a transaction. The form will introduce the broker to the other parties as the buyer’s agent, seller’s agent, or dual agent. Signing the form is a simple acknowledgment  that the prospect understands that particular agent’s role.

The goal is for buyers and sellers to always be aware of who is representing whom so that no perceived conflict of interest arises. The fear from the broker’s standpoint, however, is that prospective clients may balk when immediately asked to sign their names to a document.

This law isn’t exactly new, it’s just broadening a disclosure law that previously only applied to single family homes and buildings with four are fewer units–obviously a minority of the properties in Manhattan. Failure to produce a disclosure form could mean a penalty of up to $1,000 and the potential loss of commission.

In an industry already fraught with paperwork, here’s another to slap on the pile. The good news is that it keeps everybody in the know, which is never a bad thing.

Sources: New York Times, NY1

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