The Nest

NestApple's Real Estate Blog

Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.

REBNY rules on buyer representation in NYC

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real estate broker browsing through listings with a client - REBNY on buyer representation in NYCWhat is a buyer’s broker in NYC? What is a procuring cause? How to find a buyer’s broker in NYC? Which agent is entitled to the buyer’s broker commission in NYC? Should a buyer sign a buyer’s broker agreement in NYC? We will go through all the most frequent questions clients ask about broker representation. We will share the official rules on REBNY on buyer representation in NYC. Those apply to all REBNY member firms including buyer broker commission rebates.

Can a buyer always get representation in a transaction?​​

Yes, the New York State Department of State (“DOS”) has consistently stated that a buyer​​ has a right to get representation in a real estate transaction. The listing broker must always honor this right. The DOS has declared that.

any such denial will be construed as a violation of the listing broker’s duty to deal honestly, fairly, and in good faith with the buyer.

real estate in new york closing a deal: REBNY on buyer representation in NYCMay a listing broker refuse to work with a buyer’s broker if the seller has specifically asked its broker not to?

No. Doing so would represent a violation of the listing broker’s duty to deal fairly with a buyer. This remains true even though the listing broker was following the seller’s instructions. According to the DOS:

Assuming a seller chooses to use the services of a real estate broker. The seller must do so with the understanding that the broker cannot refuse to cooperate with real estate brokers who represent buyers.”

Does a broker deserve a commission by only showing a property under REBNY buyer representation rules in NYC?

No. Merely showing a buyer a property does not necessarily entitle a REBNY member to a commission. A broker is entitled to a share of the commission if they became the “procuring cause.” As defined by the National Association of Realtors (NAR) as “the uninterrupted series of causal events that leads to a successful transaction.

This means a broker deserves a commission for getting the sale done. In NYC, the Appellate Division stated that there must exist a “direct and proximate link between the broker and the transaction. This is the way for the broker to become eligible for a commission.

What constitutes the “procuring cause” under REBNY buyer representation rules in NYC

broker showing a unit to client“Procuring cause” does not get defined precisely anywhere. However, case law suggests that a real estate buyer’s broker NYC must show a “direct and proximate link between the bare introduction of the buyer and seller and the transaction.”

In other words, a REBNY member must bring together a meeting of the minds between buyer and seller. He must show that he generated a chain of circumstances that led to the sale. The ultimate determination of whether or not the REBNY member procured the buyer remains a fact-sensitive inquiry. This judgment turns on the specific facts and circumstances of each case.

May a buyer switch realtor at any time during a transaction?

signing a real estate contract with a broker. Yes. In the absence of an exclusive representation agreement, a buyer may switch real estate buyer’s broker NYC at any time during a transaction—a buyer’s Broker Agreement details who represents the buyer. Once you sign a buyer’s agent agreement, you become legally obligated to work with that agent. Therefore, the buyer’s decision to change brokers does not necessarily dictate which broker remains the buyer’s procuring cause. An exclusive buyer’s broker agreement in NYC remains rare.

For example, let’s assume that buyer’s broker NYC A represented the buyer for the entire transaction. On the night before closing, the buyer instructs Broker A not to come to the closing. Because the buyer brings Broker Z. The buyer has the right to change to Broker Z. However, doing so does not negate the fact that Broker A was the “procuring cause.” In this case, Broker A would still be entitled to share in the commission even though the buyer has changed brokers.

Once again, determining who became the procuring cause of the transaction depends on each case’s specific facts and circumstances. After a shower, lots of clients contact Nestapple showed them a property or even after another buyer’s broker NYC placed an offer. Those actions alone do not constitute a procuring cause. If you have more questions, you can read our FAQ on broker representation. How to find a buyer’s broker in NYC? It’s easy – call NestApple to get a buyer broker commission rebate!



Written By: Georges Benoliel

Georges has been working in Wall Street for the last 16 years trading derivatives with hedge funds. He has been an active real estate investor for over a decade. Georges graduated from HEC Business School in Paris and holds a master in Finance from ESADE Barcelona.

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