The Essential Guide to Dual Agency in NYC Real Estate

In New York, things tend to move at a brisk pace (unless you find yourself in a taxi at rush hour). Real estate transactions are no exception. One minute you’re casually browsing properties, and the next minute you’re in a bidding war — it escalates quickly!

New Yorkers also tend to be pretty independent, often scouting properties solo rather than enlisting the help of a real estate agent. In a world of increasingly convenient self-service opportunities, we get it. 

But when it does come time to consider making an offer, should you sign a dual-agency disclosure with the listing agent or seek your own buyer’s agent? 

What is Dual Agency?   

First, let’s break down what "dual-agency" actually entails. A dual-agency real estate transaction is when one real estate brokerage represents both the seller and buyer of a property. At a glance, it may not seem like much of an issue. 

The problem is that the buyer and seller have competing interests and want the best outcomes for themselves. A seller’s agent is under contract to represent the best interests of their primary client — the seller. A dual-agent has the obligation of acting in the best interest of both the seller and the buyer. While this is certainly possible, it’s tricky, especially during negotiations.

A dual-agent cannot disclose confidential information to either party, and must act as an impartial resource. This is often easier said than done, and can lead to frustrations on both sides.

Is Dual-Agency Legal in New York? 

While dual agency is illegal in some US states, it is legal in New York. Still, the Department of State’s Office of General Counsel warns homebuyers of the risks of dual-agency in real estate transactions.

"Significantly, by consenting to dual agency, you are giving up your right to have your agent be loyal to you, since your agent is now also representing your adversary," the Office of General Counsel notes on its website.

"Adversary" is a harsh way of putting it, but regardless, the seller’s goal is to get the highest price for their apartment. Your goal is to get a fair price. Ideally, you want an agent who will advocate on your behalf for that fair price.

To ensure that home buyers are well informed about the risks of dual agency, agents are required to provide written acknowledgement that buyers are aware of what dual agency entails, and confirm understanding that the agent will be representing both parties and be unable to provide undivided loyalty.

New York State provides licensed real estate agents and brokers with a standardized form entitled "New York State Disclosure Form for Buyer and Seller" that outlines the potential agency relationships. 

Buyers and sellers must both sign this documentation acknowledging dual agency (sometimes referred to as informed consent), since both are giving up their right to sole representation.

How to Avoid Dual Agency Conflicts of Interest & Save 

The best way to avoid any potential conflict of interest with a dual-agency arrangement is to avoid one in the first place. 

Entering into negotiations with your own buyer’s agent from an independent brokerage ensures that you have someone on your side to provide guidance and submit informed offers based on nearby comps and property values.

Having an unbiased buyer’s agent makes the home buying process easier, and can come with additional benefits, too. 

If you work with a real estate brokerage like Prevu that offers buyer commission rebates, you can get back up to 1.5% of the purchase price after closing. For example, on a $1.5 million apartment with a 3% buyer's agent commission, that’s $22,500 back in your pocket — enough to cover closing costs, moving expenses, new furniture, or a host of other expenses that may arise.

As a modern tech enabled brokerage, Prevu’s digital home buying platform makes it easier than ever to buy an apartment in New York City. Our experienced agents will walk you through each step, with only your best interests in mind. Once your purchase is finalized, we’ll cut you a check for your Smart Buyer Rebate.

Types of Dual Agency in NYC

• Dual Agent
• Dual Agent with Designated Selling Agent

There are two key types of dual agency. The first is referred to as dual agent which means there is one agent or broker within a real estate brokerage that represents both the buyer and seller in a transaction. 

The second is referred to as dual agent with designated selling agent which means that the same real estate brokerage represents both parties, however the seller is represented by their listing agent and the buyer is represented by a different agent from the same brokerage.

Many in the industry will argue that dual agent relationships are risky as it is extremely difficult for one person or brokerage to be completely impartial. Dual agent with a designated sales agent is a step in the right direction for a buyer to have their own advocate in the process.

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