Standardized Operating Procedures: Agency Disclosure and Transaction Handling
New York requires real estate brokers to maintain written standardized operating procedures (SOPs) and to provide them to prospective clients, reflecting the statutory duty to operate transparently and consistently. For exam purposes, treat SOPs as the office's written playbook covering how the brokerage handles agency relationships, disclosures, and the mechanics of a deal.
Agency disclosure. The statutory disclosure form must be presented to a prospective buyer or seller at the first substantive contact and before any specific property discussion, and it must be signed and retained. The key distinction: the disclosure explains the types of agency (seller's agent, buyer's agent, dual agent, dual agent with designated sales agents) and the fact that a broker represents the party who engages them. Signing the disclosure is acknowledgment of receipt, not an agency agreement - a frequent exam trap.
Dual agency. Dual agency requires the informed written consent of both parties. "Dual agency with designated sales agents" assigns different licensees within the same brokerage to each side, but the brokerage itself remains a dual agent, so consent is still required.
Advance consent in buyer-broker agreements. A buyer-broker agreement may include advance consent to dual agency with designated sales agents; if it does not, consent must be obtained when the situation arises.
Other SOP content. Procedures typically address handling of offers and counteroffers, confidentiality of client information, escrow and earnest money handling, fair housing compliance, advertising approval, and supervision of unlicensed assistants.
Worked example: An agent meets a buyer at an open house and begins discussing a specific listing. The agency disclosure should already have been given at first substantive contact; if the agent waits until the offer stage, the timing requirement has been missed.