All About Agency

Can it still be called “Tumbleweed Tuesday” if nobody leaves?

Saying “goodbye” to the summer season can be the highlight for many East Enders looking forward to reclaiming their turf. But the pandemic has changed all that, in ways large, small, and still yet to be discovered.

At the beginning of this second summer season of Covid, we had high hopes that life would go back to some semblance of normal. Now that we are at the end, the variants have made many of us not so sure. The sands beneath our feet continue to shift.

What does this mean for real estate?

It’s impossible to know. And as we’ve just been reminded by the twists and turns of Hurricane Henri, even the most prescient predictions can be wrong as winds can change direction on a dime and tides suddenly turn.

So, you might be thinking, against all previous odds, that it’s time to make a change. It could be packing it all in and selling, moving to a more predictable (or less expensive) environment; deciding to take the plunge to buy your beach dream house; or perhaps making some money by turning your home into an income-producing asset.

Regardless of what your Hamptons circumstance, if you’re making a real estate move, it’s important to know about agency. I’m not talking about which brokerage or real estate salesperson that you choose; I’m talking about who does what when it comes to representation and why that matters.

Simply stated, the job of a real estate agent is to put buyers and sellers together, acting as their representative in a transaction. Governed by the Department of State in New York, agents, who are bound by very specific laws and a code of ethics, typically represent either the buyer or the seller. Not usually both, and there’s a significant reason why. It’s called fiduciary responsibility.

Fiduciary duties are the highest known to law. Trustees, executors, guardians, lawyers, and yes, real estate agents, are legally bound to them.

Most people who aren’t in real estate might have heard the term “listing agent” but they don’t quite understand what that person does, and why it matters mightily to everyone involved in a transaction. In brief, a listing agent represents the seller of property. That means that they have a fiduciary responsibility to the seller, and the seller only, exclusively.

Thus, a listing agent is legally and ethically bound to act in the best interest of their client, the seller. NOT in the best interest of the buyer, contrary to popular belief.

I can’t tell you how many times I’ve heard very smart people tell me that they will go directly to a listing agent when they are interested in buying or learning about a specific property. Oof. Please. Never. Ever. Do. That. Without fully understanding agency.

People in the market for a property oftentimes think that they can save money or time by cutting out a buyers’ agent. They are not aware of, or they misunderstand, how the law applies to agency. As a result, the potential buyer removes the person they assume is the middleman because they think that negotiating directly through a listing agent will yield them the best deal — fairer terms, less expensive price, smaller commissions, etc.

What they are instead doing by directly approaching the person who represents the seller is taking away their own protections. Just as a listing agent has a fiduciary responsibility to the seller — broadly speaking, including obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care — a buyers’ agent has the same legal and ethical directives to their clients.

Therefore, anything you disclose to an agent who is representing someone other than you is fair game. If you are a buyer who decides to go sans representation and tell the listing agent what your actual ceiling is on price, they are legally obligated to share that information with their client. If you tell the listing agent that you are going to immediately flip the house and make a fortune on the resale, guess what.

Agents should explain all of this to you at the point of first substantive contact. If you’re a buyer and you’ve reached out and gone direct to the listing agent, have they done that?

Or have they at least explained dual agency? That’s where a buyer and seller enter into an agreement with the same agent to represent them both. Dual agency adds a new wrinkle and it’s complicated. Keep in mind, however, that an individual agent can only have a fiduciary relationship with one party. We can discuss this another time.

In the meantime, regardless of what your needs are in real estate, please make sure you’re protected and being represented by a professional who has your back and knows what the heck they are doing. It’s important, and most likely one of the most significant and expensive transactions you’ll make in a lifetime.

Cheers to the end of another (mostly glorious) summer. And welcome to what one can only hope is a happy, healthy, and wondrous fall.

Dawn Watson is a licensed real estate salesperson with Douglas Elliman. She’s happy to answer any of your questions about Hamptons real estate. Contact her at 917-287-2455 or


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