The Agent Violated His Fiduciary Duty Towards His Client => File A Complaint Vs Your Real Estate Agent
The best reason to file a claim against an agent for misconduct is if the agent engaged in unethical behavior to the detriment of his client. Lets give a typical example. Imagine a sellers agent received two offers, one from a direct buyer and one from a represented buyer. The represented buyer is more qualified, and the bid is higher. However, the listing agent successfully pushes the seller to accept the direct buyers offer because the listing agent would earn the entire 6% real estate agent commission. This attitude represents a violation of the realtors fiduciary duty towards the seller for personal interest. If discovered, a customer needs to this behavior of this broker should be reported to the New York Department of State.
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Real Estate Broker Fee: How To File A Complaint
The changes to New York law enacted by the 2019 Tenant Protection Act have a lot of people wondering whether they can get broker fees charged to them returned.
The first step you might take is to speak directly with your broker or landlord. If this doesnt produce the results you are looking for, you can consider taking another step: filing a complaint against the broker with the state.
To file a complaint against a real estate broker you will need to complete and mail a form to the New York State Department of State Division of Licensing Services.
Because the Division of Licensing Services oversees many types of licensed professionals, the complaint form is not specific to real estate broker complaints.
The complaint form and a link to download the form are provided below.
Before you begin, make sure you know the name on your real estate brokers license. You can look it up on the States Public License Search website:
RETURN COMPLETED FORM TO:
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For Sale By Owner Vs Real Estate Agent
Selling your home means making dozens of decisions, starting with whether to work with a real estate agent. While the vast majority of homeowners hire a listing agent, others brave the world of FSBO For sale by owner. According to Zillow research, 36% of sellers attempt to sell their homes themselves, but challenges along the way lead many of them to eventually hire an agent. In the end, only 11% of sellers end up selling their home without a real estate agent.
We asked FSBO sellers their reasoning for selling on their own, and here are their leading responses: 49% aimed to save money 35% felt confident they could sell without an agent, realtor, or broker and 34% already knew a potential buyer.
Homeowners that attempt FSBO transactions are more likely to be older, living in rural areas, and are more likely to be selling a mobile home.
If youre trying to decide whether youre better off taking on the ultimate DIY project or enlisting the help of a local real estate professional, read on for benefits of both types of transactions.
You Want Both A Lawyer And Real Estate Agent To Sell A New York Home
Unlike some states, when it comes to selling your own home in New York state and NY real estate law, it is customary to have a real estate agent to market and negotiate offers on the property, but also an attorney to prepare the contract of sale and to represent you at the closing. So youll want both, a real estate attorney in NYC and a real estate agent.
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How Much Do You Lose Selling A House As Is
While thereâs no data on âas isâ listings specifically, we can take a look at a similar situation to get an idea of how much you can end up leaving on the table: foreclosures.
In many cases, foreclosed homes will sell for as much as 37% below fair market value. Since sellers listing their homes âas isâ are often faced with similar financial stressors, this is a decent metric to use. In real estate, this would be called a âcompâ â a comparable property.
Letâs take a look at what a hit like this would mean for a typical New York sale:
According to Zillow, the 2019 median sales price in New York is $399,000. Selling for 37% less would mean selling for only $251,370 â a loss of $147,630 in potential profits.
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File A Complaint Before Closing And Any Commission Is Paid
As you can imagine, its much more effective to file a complaint if you have to before closing, and before any commission exchanges hands. If you do so early enough, you may be able to prevent a commission from being paid unjustifiably.
On the other hand, if you procrastinate and only file a complaint long after the closing, then it may be quite a while before you see any monetary restitution, if any restitution ever happens.
Keep in mind that most real estate agents do not make much money, and the commission they earned may well have been spent long before any regulatory authority rules that the commission be returned.
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To Renew A New York Real Estate License:
New York licensed real estate agents and brokers need to complete 22.5 credit hours of state approved continuing ed credits every two years . During each renewal cycle there are mandatory topics that need to be completed. We recently published an article: How to Renew a New York Real Estate License which further explains the process, fees, and general requirements.
Unusual Offer And Contracting Procedures In Tte State Of New York
Your real estate attorney NYC and your agent should be familiar with submitting offers and contracting procedures. Under the real estate laws in NY state, a contract for the sale for real property must be in writing thus a verbal offer creates no binding obligation upon either party. If your offer is accepted, youll need to contact a real estate attorney NYC to proceed with the sale. If your offer is rejected, either make a counter-offer or move on to a different property. Do not put anything in writing, as this may, unintentionally, create a binding contract. Oftentimes the real estate agent will request that you sign an offer or even a contract. Do not do so without speaking to a real estate attorney NYC.
Furthermore, if you intend to submit some type of a non-standard offer or non-traditional offer, then you definitely want to consult a real estate attorney NYC before the offer is submitted, so they can draft it properly in writing. Failure to do so may result in your offer being rejected because it wasnt communicated properly, or worse yet, being accepted and since your offer wasnt drafted properly, youre negatively impacted.
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Benefits Of For Sale By Owner
Homeowners who choose to sell their house without a listing agent maintain control of showings and open houses. Photo from Stocksy.
1. Youll avoid paying listing agent commission: The most common reason to FSBO is to avoid paying commissions, which are fees paid to agents based on the final selling price of the home. Commissions average between 4% to 6% of the homes purchase price and are usually paid by the seller from the proceeds of the sale. Typically, the buyer and seller have their own agents, with the commission split between the two.
2. Youll have complete control of the listing price: Without an agent, youre the sole decision maker when it comes to your list price. Youll need to make sure you put your emotional connection to your home aside. Look at your home as an asset and do your research to see how your property stacks up against other similar homes nearby. For $300-$500, you can hire an appraiser to give you a real market value.
3. You can manage the schedule of showings and open houses: Fleeing your house for last-minute showings and all-day weekend open houses is a lot of worknot to mention having to keep your home pristine around the clock. When youre running the show, you get to decide when you want to show your home. And, you wont have to wait for your agent to be available to do a showing for you.
Attorneys Role In A New York Home Sale
When it comes to selling your own home in New York state, your attorney will prepare the contract of sale. Most sellers attorneys start with a standardized form and then add a rider with additional terms to be negotiated with the buyers.
Once the attorneys have finalized the contract, you and the buyers will sign it, and the buyer will send your attorney a downpayment, which they may lose if they walk away from the deal without a reason contemplated by the contract. Typically, in New York State, the downpayment is for 10% of the purchase price, and your attorney will deposit this amount into an escrow account controlled by your attorney. After the contract is signed, your real estate attorney NYC will need to do several things to prepare for a closing.
First, the attorney will review the title report ordered by the buyers attorney to see if there are any issues that must be resolved before a closing. These may include liens or violations against the property. Second, your attorney will prepare all of the closing documents, including the deed and transfer documents. Third, your attorney will calculate the amounts owed at closing, which may include NYC coop closing costs, New York condo closing costs, and condo closing costs NYC buyer.
If you have a mortgage, your attorney will request a pay-off letter to determine the amount owed to your lender. Your attorney will also calculate the closing costs that you owe and proceeds owed to you by the buyers.
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Potential Drawbacks Of Selling A House As Is In New York
Unfortunately, listing your house âas isâ carries a negative stigma. Buyers assume there is something irreparably wrong with the property and steer clear of it, making it much harder to get an offer.
If you do eventually get an offer, it will almost always be far below what youâd get if you made repairs and listed your home normally. Since buyers will need to foot the repair bill, theyâre going to expect a hefty discount, and you need to be willing to provide them with one if you want to sell your home.
Additionally, you may run into buyers who will take advantage of the fact that a seller is under financial stress. Some buyers will initially make a very high offer, only to drastically lower it after intentionally drawing out the sales process for months. When faced with the prospect of turning down a buyer after investing months into the sale, many sellers cave.
Disclosure Obligations And Disclosure Requirements Under The Property Condition Disclosure Act
New York law requires you, the seller, to disclose known home defects to the buyer. Under real estate laws in NY state, you, as a New York home seller, could be found liable to a buyer for having failed to disclose certain property conditions, or defects, in the course of the sale.
Under the New York Property Condition Disclosure Act or PCDA, the seller is required to make these disclosures to the buyer or else pay a $500.00 penalty to the buyer at closing. While the PCDA requires you to complete a standardized disclosure statement and deliver it to the buyer before the buyer signs the final purchase contract, in practice, most home sellers in New York opt not to complete the statement and instead pay the credit. However, just because the seller pays the $500.00 credit instead does not mean that the seller is still not liable to the buyer for not disclosing under the PCDA. If there is a known defect that is not disclosed by the seller, the seller may still be liable to the buyer for any loss sustained as a result of that non-disclosure.
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Unlicensed Real Estate Assistants
Across the country, more and more real estate businesses are utilizing unlicensed employees or personal assistants to help with routine tasks. Consideration must be carefully given to the assignments given to these unlicensed individuals.
WHAT MAY THEY LEGALLY DO?
In general, they may engage in any office activities that are not specified in Section 440 of Article 12A of the New York State Real Property Law.
Some of these general office activities that may be performed by an employee, secretary or a personal assistant who does not hold a real estate license are:
- Answer the phone, forward calls, and take messages.
- Arrange appointments, by telephone, for the licensee.
- Follow up on loan commitments after a contract has been negotiated and generally secure status reports on loan progress.
- Assemble documents for closing.
- Write ads for approval of broker and place approved classified advertising.
- Type contract forms for approval by broker.
- Compute commission checks.
- Place or remove signs from property.
- Order items of repair as directed by the broker.
- Prepare flyers and promotional information for approval by broker.
- Schedule appointments for licensees to show listed property.
- Gather information for a comparative market analysis.
- Gather information for an appraisal.
- Monitor licenses and personnel files.
- Perform secretarial and clerical duties such as typing of letters and filing.
WHO IS RESPONSIBLE?
HOW SHOULD PAYMENT BE MADE?
What Must Be Disclosed
The PCDA features 48 questions that a seller must answer truthfully. They include factors regarding:
- General Information – ownership information, age of the structure, and an average cost of utilities
- Environmental – history of radon testing, if the location is within a floodplain, and if the property has been exposed to toxic substances, whether leaked or spilled
- Structural Elements – Damage caused by water, smoke, fire or insects, and roofing integrity and
- Mechanical Systems – Performance issue within the water system and quality, drainage complications, and flooding issues.
At a federal level, every home seller in the United States listing a home built before 1978 is required to disclose the presence of lead paint. If you aren’t sure, it’s a good idea to get the property inspected before going to market. If it passes, you will be granted certification that you can pass along to buyers to speed up the process once a sale is being negotiated.
When filling out the disclosure, be as honest and forthcoming as possible to protect your home sale from rescission and becoming the subject of a lawsuit.
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Disclosure Obligations In A Dual Agency Arrangement
It is not unusual for a brokerage firm to represent both sellers and buyers. If the buyer wishes to see a property the broker has listed for a seller, the broker may become the agent of both seller and buyercalled a dual agent.
There’s a problem with representing both the seller and the buyer, however: a dual agent cannot maintain the same level of loyalty and confidentiality to either. The rule of “caveat emptor” will not apply, and the listing broker will make disclosures of known facts about the property to the buyer.
To ensure that the special relationship of the dual agency is explained to both parties, the New York legislature passed a strict broker-relationship disclosure law. The dual agent is legally required to give a disclosure form to both parties and to obtain their consent to the relationship.
The language of the disclosure form, called the Disclosure Regarding Real Estate Agency Relationships, is set by the law, and describes the duties and loyalties owed by the dual agent to each party and the potentially competing interests.
Learn What’s Required To Get Your Real Estate License In New York
This real estate licensing information summarizes the minimum real estate education requirements established by the New York State Department of State, Division of Licensing Services. We recommend you contact the Division for more detailed information or changes.
Are you planning to obtain real estate licenses in multiple states? If so, we recommend you check each state’s requirements.
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Ask An Expert: Handling A Horrible Broker
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Is there any recourse against a bad NYC real estate agent? After we decided not to buy an overpriced, small condo, ours went on a rampage, saying we werenat serious buyers and that he and our lawyer had had a good laugh at us behind our backs.
He gossiped about and bad-mouthed other clients, told us wead seen an apartment already when we hadnat, lied about having other interested sellers, and asked us to pay full-ask immediately on a place that ended up selling months later and for an 11% discount. If we had bought the apartment, wead have lost nearly $1.1 million! He was supposed to act as our buyeras agent, but he only cared about his commission. I feel disillusioned by this whole awful experience.
From the sound of things, your broker was most definitely out of line, and while you probably cant get them in legal trouble, youve got plenty of other options when it comes to filing complaints, say our experts.
While the brokers behavior is clearly boorish and unprofessional it would not seem to cross the line as unethical, says real estate attorney Dean Roberts of Norris, McLaughlin & Marcus. Rather, it would appear that he is unsuited for his current job.
Still, youve got plenty of recourse to file complaints, and to warn other buyers against working with this agent.