NY Real Estate common mistakes
NY Real Estate · Understand the traps and how to avoid them.
On a question where the seller's listing broker also wants to represent the buyer, the candidate answers that dual agency is illegal in New York.
Carries over a general 'dual agency is prohibited' rule from other states or ethics training and never learns New York's written-consent exception.
What to do instead
Memorize that New York permits dual agency only with written informed consent, and distinguish it from designated agency, where two agents in the same brokerage represent different parties.
Says the agency disclosure form may be given at the first showing or at closing.
Confuses New York's 'first substantive contact' trigger with other states' 'before signing' rules.
What to do instead
Learn the New York timing: disclose at first substantive contact and again in the contract; not at the first showing or at closing.
When asked which classes are protected in New York, lists only race, color, religion, sex, national origin, familial status, and disability.
Studies only the federal Fair Housing Act list and treats it as the complete New York list.
What to do instead
Add New York classes, especially source of income, sexual orientation, gender identity, military status, age, marital status, andalienage/citizenship; source of income is heavily tested.
Defines blockbusting as refusing to show a home to a minority buyer.
Confuses blockbusting with steering or with outright refusal to show.
What to do instead
Separate the terms: blockbusting is inducing panic selling for profit; steering is channeling buyers by protected class; refusal to show is discriminatory denial.
Waits for a three-day attorney review before treating a signed New York residential purchase contract as binding.
Borrows the New Jersey attorney-review practice and assumes it applies in New York.
What to do instead
New York has no statutory attorney-review period; the contract is binding when signed unless it contains an attorney-approval contingency.
Accepts a text message or oral promise as an enforceable contract to sell land.
Treats informal communications as binding and forgets the statute of frauds.
What to do instead
Require a written contract signed by the party to be charged; oral agreements and texts do not satisfy the statute of frauds for land sales.
Says the buyer pays the New York real estate transfer tax and the seller pays the mansion tax.
Assumes all closing taxes fall on the buyer or mixes up the two taxes.
What to do instead
Seller pays the real estate transfer tax; buyer pays the mansion tax on residential purchases over $1 million; mortgage recording tax is paid by the borrower.
Has an unlicensed assistant hold an open house, quote commission, or discuss contract terms with a customer.
Believes only signing contracts requires a license and that clerical staff can do anything short of closing.
What to do instead
Unlicensed staff may perform clerical and advertising work but may not negotiate, quote commission, or discuss terms; know the licensed-activity line.
Treats co-op shares as real property and applies deed and transfer-tax rules to a co-op purchase.
Assumes every home purchase involves real property and a deed.
What to do instead
Co-op ownership is personal property: shares plus a proprietary lease, with board approval; condo ownership is real property with a deed.
Suggests paying a $500 'referral fee' to an unlicensed friend who sent a buyer.
Confuses a permissible gift or thank-you with lawful fee splitting.
What to do instead
New York prohibits sharing commissions with unlicensed persons; only licensed brokers may be compensated for brokerage referrals.