Two Sides, One Firm, One Confidential Number
Dana is managing broker of Cedar Point Realty. On March 3 she signs an exclusive right to sell with Victor for 148 Seventh Street at 5%. On March 10 buyer Priya calls the office about the listing, and Dana's associate Luis shows it on March 12. Priya asks Luis to represent her in writing before submitting an offer. Cedar Point maintains a written designated-agency policy filed in the office. Earlier that week Victor told Dana privately that he would accept $40,000 below list for a deal closing by June 30. Priya tells Luis she would pay full list if the seller includes the washer, dryer, and storage unit, then asks him point-blank what Victor's real bottom line is. Luis would very much like to keep both sides of the commission.
1. When must Cedar Point give Priya an agency disclosure, and what makes this contact 'substantive'?
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New York requires the written agency disclosure at the first substantive contact - the point at which a buyer begins discussing confidential financial information, motivation, or a specific offer, not merely a phone inquiry about availability.
Here the trigger has already occurred. Priya's call on March 10 was arguably preliminary, but by March 12 she has asked to be represented and has disclosed what she is willing to pay. Luis must hand her the statutory disclosure form before continuing that conversation.
Mechanics: the form is signed and dated by the buyer, explains seller's agent, buyer's agent, and dual agent with advance informed consent, and states that a buyer may retain their own representative. Luis should obtain the signature, note the date in the file, and only then discuss price and terms. A verbal explanation alone is not compliance.
2. Can Luis tell Priya the $40,000 figure? What changes if both Victor and Priya consent to dual agency?
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No. Before any consent, Dana holds Victor's confidential instruction as the seller's agent; it cannot be transmitted to a prospective buyer. Priya's statement that she would pay full list is equally confidential and cannot be passed to Victor.
If the firm moves to dual agency, it needs written informed consent from both parties before acting. Consent does not unlock confidences: a dual agent must not disclose one client's confidential information to the other, and may not advocate for one side against the other. The $40,000 never crosses.
If Cedar Point instead uses its designated agency policy, Dana is designated for Victor and Luis for Priya, with written consent from both. Each designated agent owes full loyalty to their own client; the firm is a dual agent. Luis still cannot reveal the number - he does not hold it as Priya's agent, and Dana must not pass it to him for Priya's benefit.
Practical answer for Luis: explain that he cannot share the seller's position, and offer to present Priya's best terms.
3. Priya refuses to consent to dual agency. What may Cedar Point do next, and what does Priya get?
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The firm may remain Victor's agent and treat Priya as a customer. That is lawful and common. What the firm must do is tell her clearly, in writing, that it represents the seller, that she should consider retaining her own representation, and that the firm will not negotiate on her behalf.
As a customer, Priya is still owed: honesty, fair dealing, disclosure of known material facts about the property, and accounting for any funds she deposits. What she is not owed is advocacy, confidentiality, or advice on negotiating strategy - Luis must stop coaching her on what to offer.
The firm may still show the property and transmit her offer. The alternative is to refer her to a different brokerage. What the firm cannot do is act as if it represents her without consent, or slide into dual agency by conduct.