Preview
FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018
NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018
FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018
7/11/2018 N.Y. OFFICIALS CHALLENGE ROLE OF REALTY AGENTS -The Washington Post
NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018
Ebe hshington $1ost
Democracy Dies in Darkness
N.Y. OFFICIALS
CHALLENGE ROLE OF
REALTY AGENTS
By H. Jane Lehman
Long-standing real estate brokerage practices frequently put the
self-interests of real estate agents above those of the home
sellers or buyers they represent, two top New York state
consumer protection officials charged recently.
However, the National Association of Realtors, the industry's
main trade group, sharply disagreed with that characterization.
New York Secretary of State Gail Shaffer lambasted real estate
brokers for failing to fulfill their legal accountability as
fiduciaries to buyers and sellers during a symposium in
Gaithersburg last week. New York's strict new real estate
disclosure law, which Shaffer is credited with formulating, is
considered the most progressive in the country by many
consumer activists.
"Even many well-intentioned people in the industry truly do not
understand the fact that widespread traditional practices as they
have been set up by boards of Realtors and practiced in this
country, not just in our state, have really troubling, troubling
general,"
impacts for consumers and for ethics in Shaffer said.
I
FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018
7/11/2018 N.Y. OFFICIALS CHALLENGE ROLE OF REALTY AGENTS -The Washington Post
NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018
Ebe hshington $1ost
Democracy Dies in Darkness
"Bud"
Almon R. Smith, executive vice president of the National
Association of Realtors, disagreed with Shaffer's assessment
when contacted later, saying the licensing laws and code of
ethics under which his members operate preclude conflicts of
interest. Realtors, Smith said, "are required to treat all parties
information."
fairly. They cannot hide things or give false
Shaffer, however, maintained during her presentation that such
assurances are not enough. A fiduciary, she said, owes loyalty,
obedience, confidentiality and full disclosure to a client. If
disloyal, a real estate broker may be fired, forced to return any
compensation and may become liable for monetary damages
arising from a lawsuit, she added.
Self-dealing on the part of real estate brokers arises under
several scenarios, said Maureen Glasheen, who works for Shaffer
as the New York state agency's general counsel.
One of the most common is when a real estate broker assists a
buyer with finding properties but fails to inform the buyer
immediately that the broker works for the seller of the homes,
Glasheen said. Yet, the broker is obligated to pass on any
information the buyer reveals that could prove useful to the
seller, such as how much the buyer can afford to pay and how
quickly the buyer must act, she said.
https://www.washingtonpost.corn/archive/realestate/1992/06/27/ny-officials-challenge-role-of-realty-agents/45af1
209-3f7b-449c-ba0c-c50d986c1c76/?... 2/8
FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018
7/11/2018 N.Y. OFFICIALS CHALLENGE ROLE OF REALTY AGENTS -The Washington Post
NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018
E4e toashington $1ost
Democracy Dies in Darkness
consumer survey shows the practice still is widespread.
Now mindful of the unlawful nature of undisclosed dual agency,
some realty firms have decided to engage in "disclosed dual
agency,"
said Bernadette McTighe, executive director of the
Rockville-based Single Agency Realty Association, which
sponsored the symposium.
Alternatively, McTighe said, many firms operate under the
agency,"
concept of "single where the broker contractually agrees
to represent only the seller or, in a growing number of instances,
only the buyer as a buyer broker.
Some of these firms, though, reserve the right to engage in
disclosed dual agency to represent both sides of the transaction
on an in-house listing and therefore collect the full real estate
commission, McTighe said.
Supplying the buyer for an in-house listing is a high priority with
many realty firms, said James Warkentin, a McLean-based
buyer broker and symposium speaker. "They do not make money
double-headers,"
without the he said.
Shaffer said that as long as both buyer and seller are warned up
front and agree to disclosed dual agency, the practice is legal.
Her department, however, advises consumers to reject such
arrangements because it does not work to the benefit of either
party.
"There is no peace of mind for the buyers, who will always
wonder if they did not get taken, and the seller is not guaranteed
closing"
a bulletproof because the buyer is more likely to act on
regrets and back out of the contract, Shaffer said.
https://www.washingtonpost.corn/archive/realestate/1992/06/27/ny-officials-challenge-role-of-realty-agents/45af1
209-3f7b-449c-ba0c-c50d986c1c76/?... 3/8
FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018
7/11/2018 N.Y. OFFICIALS CHALLENGE ROLE OF REALTY AGENTS -The Washington Post
NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018
she hshington post
Democracy Dies inDarkness
rather than offer them the choice of whether to enter into that
arrangement with all of its potential adverse repercussions,
Glasheen said.
here,"
"There is no silver-tongued, self-serving gloss-over she
said. A broker "must tell me before I employ you {and negotiate
compensation} that there are certain circumstances where I
might seek your consent to be a disloyal agent ...and let me
know pronto so I can take steps to protect myself by walking out
door."
the
If informed consent for dual agency is obtained, then the broker
"finder"
effectively becomes a merely a middleman known as a
instead of a fiduciary. A finder "owes no loyalty to either party
both,"
but may be paid by Shaffer said.
In the limited capacity of finder, a real estate broker only may
introduce the buyer and seller and may not "exercise discretion,
broker'
benefit from {the broker's} judgment, may not induce trust and
confidence"
without reverting to a fiduciary relationship and its
responsibilities, Shaffer said.
Glasheen also urged brokers to offer more detailed broker
employment contracts, which the industry usually refers to as
listing or buyer brokerage agreements, that lay out all the
choices a consumer may make by unbundling the services
offered and pricing them separately.
For example, a seller may contract to pay an hourly fee for only
the property pricing and marketing services of an broker but
forgo the broker's representation in negotiations with the buyer,
Glasheen said. The seller also could specify how much of the
compensation should go to an assisting broker who provides the
buyer of the property, she added.
https://www.washingtonpost.corn/archive/realestate/1992/06/27/ny-officials-challenge-role-of-realty-agents/45af1
209-3f7b-449c-ba0c-c50d986c1c76/?... 4/8
FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018
7/11/2018 N.Y. OFFICIALS CHALLENGE ROLE OF REALTY AGENTS -The Washington Post
NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018
the I
hshington 1 1 post
Democracy Dies in Darkness
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https://www.washingtonpost.corn/archive/realestate/1992/06/27/ny-officials-challenge-role-of-realty-agents/45af1
209-3f7b-449c-ba0c-c50d986c1c76/?... 5/8
FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018
7/11/2018 N.Y. OFFICIALS CHALLENGE ROLE OF REALTY AGENTS -The Washington Post
NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018
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Democracy Dies inDarkness
PAID PROMOTED STORIES Recommended by Utbraln
This Game [Gallery] Locate Anyone
brings the Remember Her? By Entering
Fantasy World to She is the Their Name
Life Inspiration (Brace Yourself)
Elvenar Behind the Most www.peoplewhiz.com
Beautiful Song
Ever Written
Herald Weekly
9 Affordable Cancelled TV New Program
Beach Resort Shows: The Helps Seniors
Towns Complete List Of Get Out Of Debt
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Cancellations Smart Saver online
2018
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1 Analysis
More data on why a home l
purchase is becoming more out
of reach for millennials
2 Companies offer help with
paring possessions when
downsizing your household
3 Traditional look outside, modern 3
layout inside, lots of options all
https://www.washir 5af1 209-3f7b-449c-ba0c-c50d986c1c76/?... 6/8
FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018
7/11/2018 N.Y. OFFICIALS CHALLENGE ROLE OF REALTY AGENTS -The Washington Post
NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018
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Preview
FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018 NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018 FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018 7/11/2018 N.Y. OFFICIALS CHALLENGE ROLE OF REALTY AGENTS -The Washington Post NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018 Ebe hshington $1ost Democracy Dies in Darkness N.Y. OFFICIALS CHALLENGE ROLE OF REALTY AGENTS By H. Jane Lehman Long-standing real estate brokerage practices frequently put the self-interests of real estate agents above those of the home sellers or buyers they represent, two top New York state consumer protection officials charged recently. However, the National Association of Realtors, the industry's main trade group, sharply disagreed with that characterization. New York Secretary of State Gail Shaffer lambasted real estate brokers for failing to fulfill their legal accountability as fiduciaries to buyers and sellers during a symposium in Gaithersburg last week. New York's strict new real estate disclosure law, which Shaffer is credited with formulating, is considered the most progressive in the country by many consumer activists. "Even many well-intentioned people in the industry truly do not understand the fact that widespread traditional practices as they have been set up by boards of Realtors and practiced in this country, not just in our state, have really troubling, troubling general," impacts for consumers and for ethics in Shaffer said. I FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018 7/11/2018 N.Y. OFFICIALS CHALLENGE ROLE OF REALTY AGENTS -The Washington Post NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018 Ebe hshington $1ost Democracy Dies in Darkness "Bud" Almon R. Smith, executive vice president of the National Association of Realtors, disagreed with Shaffer's assessment when contacted later, saying the licensing laws and code of ethics under which his members operate preclude conflicts of interest. Realtors, Smith said, "are required to treat all parties information." fairly. They cannot hide things or give false Shaffer, however, maintained during her presentation that such assurances are not enough. A fiduciary, she said, owes loyalty, obedience, confidentiality and full disclosure to a client. If disloyal, a real estate broker may be fired, forced to return any compensation and may become liable for monetary damages arising from a lawsuit, she added. Self-dealing on the part of real estate brokers arises under several scenarios, said Maureen Glasheen, who works for Shaffer as the New York state agency's general counsel. One of the most common is when a real estate broker assists a buyer with finding properties but fails to inform the buyer immediately that the broker works for the seller of the homes, Glasheen said. Yet, the broker is obligated to pass on any information the buyer reveals that could prove useful to the seller, such as how much the buyer can afford to pay and how quickly the buyer must act, she said. https://www.washingtonpost.corn/archive/realestate/1992/06/27/ny-officials-challenge-role-of-realty-agents/45af1 209-3f7b-449c-ba0c-c50d986c1c76/?... 2/8 FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018 7/11/2018 N.Y. OFFICIALS CHALLENGE ROLE OF REALTY AGENTS -The Washington Post NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018 E4e toashington $1ost Democracy Dies in Darkness consumer survey shows the practice still is widespread. Now mindful of the unlawful nature of undisclosed dual agency, some realty firms have decided to engage in "disclosed dual agency," said Bernadette McTighe, executive director of the Rockville-based Single Agency Realty Association, which sponsored the symposium. Alternatively, McTighe said, many firms operate under the agency," concept of "single where the broker contractually agrees to represent only the seller or, in a growing number of instances, only the buyer as a buyer broker. Some of these firms, though, reserve the right to engage in disclosed dual agency to represent both sides of the transaction on an in-house listing and therefore collect the full real estate commission, McTighe said. Supplying the buyer for an in-house listing is a high priority with many realty firms, said James Warkentin, a McLean-based buyer broker and symposium speaker. "They do not make money double-headers," without the he said. Shaffer said that as long as both buyer and seller are warned up front and agree to disclosed dual agency, the practice is legal. Her department, however, advises consumers to reject such arrangements because it does not work to the benefit of either party. "There is no peace of mind for the buyers, who will always wonder if they did not get taken, and the seller is not guaranteed closing" a bulletproof because the buyer is more likely to act on regrets and back out of the contract, Shaffer said. https://www.washingtonpost.corn/archive/realestate/1992/06/27/ny-officials-challenge-role-of-realty-agents/45af1 209-3f7b-449c-ba0c-c50d986c1c76/?... 3/8 FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018 7/11/2018 N.Y. OFFICIALS CHALLENGE ROLE OF REALTY AGENTS -The Washington Post NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018 she hshington post Democracy Dies inDarkness rather than offer them the choice of whether to enter into that arrangement with all of its potential adverse repercussions, Glasheen said. here," "There is no silver-tongued, self-serving gloss-over she said. A broker "must tell me before I employ you {and negotiate compensation} that there are certain circumstances where I might seek your consent to be a disloyal agent ...and let me know pronto so I can take steps to protect myself by walking out door." the If informed consent for dual agency is obtained, then the broker "finder" effectively becomes a merely a middleman known as a instead of a fiduciary. A finder "owes no loyalty to either party both," but may be paid by Shaffer said. In the limited capacity of finder, a real estate broker only may introduce the buyer and seller and may not "exercise discretion, broker' benefit from {the broker's} judgment, may not induce trust and confidence" without reverting to a fiduciary relationship and its responsibilities, Shaffer said. Glasheen also urged brokers to offer more detailed broker employment contracts, which the industry usually refers to as listing or buyer brokerage agreements, that lay out all the choices a consumer may make by unbundling the services offered and pricing them separately. For example, a seller may contract to pay an hourly fee for only the property pricing and marketing services of an broker but forgo the broker's representation in negotiations with the buyer, Glasheen said. The seller also could specify how much of the compensation should go to an assisting broker who provides the buyer of the property, she added. https://www.washingtonpost.corn/archive/realestate/1992/06/27/ny-officials-challenge-role-of-realty-agents/45af1 209-3f7b-449c-ba0c-c50d986c1c76/?... 4/8 FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018 7/11/2018 N.Y. OFFICIALS CHALLENGE ROLE OF REALTY AGENTS -The Washington Post NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018 the I hshington 1 1 post Democracy Dies in Darkness The most important news stories of the day, curated by Post editors and delivered every morning. E-mail Address Sign up 0 Comments $lleblJington gest The story must be told. Your subscription supports journalism that matters. Try 1 month for $1 https://www.washingtonpost.corn/archive/realestate/1992/06/27/ny-officials-challenge-role-of-realty-agents/45af1 209-3f7b-449c-ba0c-c50d986c1c76/?... 5/8 FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018 7/11/2018 N.Y. OFFICIALS CHALLENGE ROLE OF REALTY AGENTS -The Washington Post NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018 She l (Bashington l lI $1ast Democracy Dies inDarkness PAID PROMOTED STORIES Recommended by Utbraln This Game [Gallery] Locate Anyone brings the Remember Her? By Entering Fantasy World to She is the Their Name Life Inspiration (Brace Yourself) Elvenar Behind the Most www.peoplewhiz.com Beautiful Song Ever Written Herald Weekly 9 Affordable Cancelled TV New Program Beach Resort Shows: The Helps Seniors Towns Complete List Of Get Out Of Debt AARP Television Without A Loan Cancellations Smart Saver online 2018 Simplemost Most Read 1 Analysis More data on why a home l purchase is becoming more out of reach for millennials 2 Companies offer help with paring possessions when downsizing your household 3 Traditional look outside, modern 3 layout inside, lots of options all https://www.washir 5af1 209-3f7b-449c-ba0c-c50d986c1c76/?... 6/8 FILED: WESTCHESTER COUNTY CLERK 07/14/2018 08:37 PM INDEX NO. 60767/2018 7/11/2018 N.Y. OFFICIALS CHALLENGE ROLE OF REALTY AGENTS -The Washington Post NYSCEF DOC. NO. 47 RECEIVED NYSCEF: 07/14/2018 ili.' ri II I I: i 1 I I Democracy Dies inDarkness 4 Analysis How to drill a hole into ceramic tile Sy~gosl Intctttosltington post HQ The story must be told. Subscribe to The Washington Post Try i month for $1 Inside 'Trump Revealed' ----- 5- Read stories based on reporting for Revealed," "Trump a broad, TRUMP comprehensive biography of the lifeof R EV E A L E D the 45th president. m o n t ve Bagraphy o