The following pages contain information about whom the real estate salesperson or broker represents in a real estate transaction. Usually, the listing real estate agent represents the Seller, as does the real estate agent who is showing a customer the property as a sub-agent for the other real estate office. There are options open to both Buyers and Sellers and the real estate agents must clearly (and in writing) disclose who they are representing. Please take the time to read the following Disclosure Law excerpts.

The Gray Rider Real Estate Company believes that it is the best and most honest approach for everyone involved in the buying/selling process to know exactly who I represent. As Buyer(s), you must also clearly (and in writing) acknowledge that you are aware that I am either acting as a sub-agent of the seller, or acting as your (Buyer’s) agent. At first, as is the normal practice, I will be representing the sellers. If, at some later point in your property search, you decide that you want me to represent you as a buyer's agent, I will discuss the pros and cons with you. In any case, the disclosure acknowledgement should be signed before we start to look at properties. If you have any questions about the Disclosure Law excerpts, please do not hesitate to ask me.

NOTE: In most situations, the Listing Broker will pay the Buyer’s Broker commission, BUT there are instances when the Listing Broker refuses to pay the commission and therefore the Buyer is responsible for paying their Buyer Broker’s commission.

John W. Wallace

REAL ESTATE DISCLOSURE BILL EXCERPTS

Section 1. The real property law is amended by adding a new section 443 to read as follows:

Section-443. Disclosure regarding real estate agency relationship; form. 1. Definitions. As used in this section, the following terms shall have the following meanings:

a. "Agent" means a person who is licensed as a real estate broker or real estate sales associate under section 440-a of this article and is acting in a fiduciary capacity.

b. "Buyer" means a transferee or lessee in a residential real property transaction and includes a person who executes an offer to purchase or to lease residential real property from a seller through an agent, or who has engaged the services of an agent with the object of entering into a residential real property transaction as a transferee or lessee.

c. "Buyer's Agent" means an agent who contracts to locate residential real property for a buyer or who finds a buyer for a property and presents an offer to purchase to the seller or seller's agent and negotiates on behalf of the buyer.

d. "Listing Agent" means a person who has entered into a listing agreement to act its an agent of the seller for compensation.

e. "Listing Agreement" means a contract between an owner or owners or residential real property and an agent, by which the agent has been authorized to sell or lease the residential real property or to find or obtain a buyer or lessee therefor.

f. "Residential real property" means real property improved by a one-to-four family dwelling used or occupied, or intended to be used or occupied wholly or partly, as the home or residence of one or more persons, but shall not refer to (I) unimproved real property upon which such dwellings are to be constructed or (ii) condominium or cooperative apartments in a building containing more than four units.

g. "Seller" means the transferor or lessor in a residential real property transaction, and includes an owner who lists residential real for sale or lease with an agent, whether or not a transfer or lease results, or who receives an offer to purchase or lease residential real property.

h. "Seller's agent" means a listing agent who acts alone, or an agent who acts in cooperation with a listing agent, acts as a seller's subagent or acts as a broker's agent to find or obtain a buyer for residential real property.

2. This section shall apply only to transactions involving residential real property.

3. a. A listing agent shall provide the disclosure form set forth in subdivision four of this section to a seller prior to entering into a listing agreement with the seller and shall obtain a signed acknowledgment from the seller, except as provided in paragraph f of this subdivision.

3. b. A seller's agent shall provide the disclosure form set forth in subdivision four of this section to a buyer or buyer's agent at the time of the first substantive contact with the buyer and shall obtain a signed acknowledgment from the buyer, except as provided in paragraph f of this subdivision.

3.c. An [1] agent shall provide the disclosure form to the buyer prior to entering into an agreement to act as the buyer's agent and shall obtain a signed acknowledgment from the seller [2], except as provided in paragraph f of this subdivision. A buyer's agent shall provide the form to the seller or seller's agent at the time of the first substantive contact with the seller and shall obtain a signed acknowledgment from the seller or the seller's listing agent, except as provided in paragraph f of this subdivision.

d. The parties to a contract of purchase and sale shall sign the acknowledgement of the parties to the contract.

e. The agent shall provide to the buyer or seller a copy of the signed acknowledgement and shall maintain a copy of the signed acknowledgement for not less than three years.

f. If the seller or buyer refuses to sign an acknowledgment of receipt pursuant to this subdivision, the agent shall set forth under oath a written declaration of the facts of the refusal and shall maintain a copy of the declaration for not less than three years.

4. The following shall be the disclosure form; [DOS NOTE: The full text of disclosure required by this section is enclosed. You may copy this form, for use in your business, if you wish.]

5. This section shall not apply to a real estate licensee who works with a buyer or a seller in accordance with terms agreed to by the licensee and buyer or seller and in a capacity other than as an agent, as such term is defined in paragraph a of subdivision one of this section.

DEPARTMENT OF STATE COMMENTS:

[1] Section 3.c. describes the responsibilities of a buyers' agent.

[2] There is no legal obligation for a buyer's agent to obtain a signature from a 'seller' on an employment agreement between a buyer and the buyer's agent. The word 'seller' should read 'buyer’.

Before you enter into a discussion with a real estate agent regarding a real estate transaction, you should understand what type of agency relationship you wish to have with that agent.

New York State law requires real estate licensees who are acting as agents of buyers or sellers of property to advise the potential buyers or sellers with whom they work of the nature of their agency relationship and the rights and obligations it creates.

SELLERS AGENT

If you are interested in selling real property, you can engage a. real estate agent as a seller’s agent. A seller’s agent, including a listing agent under a listing agreement with the seller, acts solely on behalf of the seller. You can authorize a seller’s agent to do other things including hiring subagents, broker’s agents or work with other agents such as buyer’s agents on a cooperative basis. A subagent, or "cooperating agent', is one who has agreed to work with the seller’s agent often through a multiple listing service. A subagent may work in a different real estate office.

A seller’s agent has, without limitation, the following fiduciary duties to the sellers: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and a duty to account.

The obligations of an agent are also subject to any specific provisions set forth in an agreement between the agent and the seller.

In dealings with the buyer, a seller’s agent should. (a) Exercise reasonable skill and care in performance of the agent's duties; (b) deal honestly, fairly and in good faith; (c) disclose all facts known to the agent materially affecting the value or desirability of property, except as otherwise provided by law.

BUYER'S AGENT

If you are interested in buying real property, you can engage a real estate agent as a buyer’s agent. A buyer’s agent acts solely on behalf of the buyer. You can authorize a buyer’s agent to do other things including hire subagents, broker’s agents or work with other agents such as seller’s agents on a cooperative basis.

A buyer’s agent has, without limitation, the following fiduciary duties to the buyer: reasonable care, undivided loyalty, confidentiality, full disclosure, obedience and a duty to account. The obligations of an agent are also subject to any specific provisions set forth in an agreement between the agent and the seller [l].

In dealings with the seller, a buyer’s agent should (a) exercise reasonable skill and care in performance of the agent’s duties; (b) deal honestly, fairly and in good faith/and (c) disclose all facts known to the agent materially affecting [2] the value or desirability of property, except as otherwise provided by law.

AGENT REPRESENTING BOTH SELLER AND BUYER

A real estate agent acting directly or through an associated licensee, can be the agent of both the seller and the buyer in a transaction, but only with the knowledge and informed consent, in writing of both the seller and the buyer.

In such a dual agency situation, the agent will not be able to provide the full range of fiduciary duties to the buyer and seller.

The obligations of an agent are also subject to any specific provisions set forth in an agreement between the agent and the buyer and seller.

An agent acting as a dual agent must explain carefully to both the buyer and seller that the agent is acting for the other party as well The agent should also explain the possible effects of dual representation including that by consenting to the dual agency relationship the buyer and seller are giving up their right to undivided loyalty.

A BUYER OR SELLER SHOULD CAREFULLY CONSIDER THE POSSIBLE CONSEQUENCES OF A DUAL AGENCY RELATIONSHIP BEFORE AGREEING TO SUCH REPRESENTATION.

GENERAL CONSIDERATIONS

You should carefully read all agreements to ensure that they adequately express your understanding of the transaction A real estate agent is a person qualified to advise about real estate. If legal, tax or other advice is desired, consult a competent professional in that field.

Throughout the transaction you may receive more than one disclosure form. The law requires each agent assisting in the transaction to present you with this disclosure form. You should read its contents each time it is presented to you, considering the relationship between you and the real estate agent in your specific transaction.

DEPARTMENT OF STATE COMMENTS

[1] Obligations of a Buyer’s agent are subject to provisions set forth in an agreement between the agent and the "Buyer". There is no involvement of the seller in that agreement.

[2] A buyer’s agent's responsibility to disclose should relate to facts known about the buyer, which might not be obvious to the sellers. Item (c) should require the buyer’s agent to "disclose all facts known to the agent materially affecting the buyer’s ability and/or willingness to perform a contract to acquire seller’s property."

DISCLOSURE REGARDING REAL ESTATE AGENCY RELATIONSHIPS

ACKNOWLEDGEMENT OF PROSPECTIVE BUYER:

1. I (we) have received and read this disclosure notice.
2. I (we) understand that a Seller’s Agent, including a Listing Agent, is the agent of the Seller exclusively, unless the Seller and Buyer otherwise agree.
3. I (we) understand that subagents, including subagents participating in a Multiple Listing Service, are agents of the Seller exclusively.
4. I (we) understand that I may engage my own Agent to be my Buyer’s Broker.
5. I (we) understand that the Agent presenting this form to me:

JOHN W. WALLACE of the GRAY RIDER REAL ESTATE COMPANY, is

(check applicable relationship)

_____ an agent of the Seller.

_____ My agent as a Buyer’s Agent

Buyer: ____________________________________ Dated: _______________

Buyer: ____________________________________ Dated: _______________

ACKNOWLEDGEMENT OF PROSPECTIVE SELLER

1. I (we) have received and read this disclosure notice.
2. I (we) understand that a Seller’s Agent, including a Listing Agent, is the agent of the Seller exclusively, unless the Seller and Buyer otherwise agree.
3. I (we) understand that subagents, including subagents participating in a Multiple Listing Service, are agents of the Seller exclusively.
4. I (we) understand that a Buyer’s Agent is the agent of the Buyer exclusively .
5. I (we) understand that the Agent presenting this form to me:

_(Name of Licensee)________________________________of _(Name of Firm)_______________________________________________, is

(check applicable relationship)

_____ My (our) Agent as a Seller’s Agent.

_____ an Agent of the Buyer.

Seller: ______________________________________ Dated: _______________

Seller: ______________________________________ Dated: _______________