The relationship formed between an agent and a client is a fiduciary relationship because it is based on trust. The agent owes a client loyalty, diligence, confidentiality, reasonable skill and care, obedience, disclosure and accountability.
A buyer’s agent is employed to find an acceptable property for a prospective purchaser. The buyer’s agent represents the purchaser in a position of trust and confidence. He or she will negotiate the best possible price and terms for the buyer when buying real estate.
Also known as a listing agent, a seller’s agent works for and represents the seller in a position of trust and confidence. A listing contract spells out the relationship. A seller’s agent negotiates the best possible price and terms for the seller.
Dual agency is a relationship in which the agent represents both the buyer and the seller in the same real estate transaction. Since the agent will be in a position of trust and confidence to both buyer and seller, there is the potential for a conflict of interest, especially in negotiating price and terms. New York law requires the buyer and seller to consent to a dual agency relationship in writing.
To eliminate the potential conflict of interest that arises in disclosed dual agency, New York law allows the sponsoring broker to designate a salesperson to represent the seller and another salesperson to represent the buyer. Each designated salesperson can represent their client, without the potential for a conflict. New York law requires a client to consent to designated agency representation in writing.