In the introduction to this series of posts - Long Island Homebuyers ~ Buyer Representation - the concept of the client relationship vs. the customer relationship was introduced.  To the typical homebuyer, the words "client" and "customer" may seem interchangeable, but the difference is very significant.

The only time that someone is considered a "client" in a real estate transaction in New York State is when they have made an agreement with an agent to represent their best interests.  For home sellers, this is not an issue, since the exclusive right to sell agreement creates the client relationship.  Homebuyers, on the other hand, are often times treated as "customers" on Long Island.  In fact, this is most often the case, unless otherwise agreed upon. 

So should it matter to a homebuyer if they are a customer or a client?  If you are a homebuyer that wants your interests protected, then the answer is a resounding "YES!"  If, however, you don't mind the agent that you are working with having a legal obligation to protect the seller's best interests, then by all means, choose the customer relationship.  The difference between having a client relationship and a customer relationship comes down to where the agent's fiduciary responsibilities lie.

Long Island homebuyers are customers more often then not, although many are never fully aware that their agent has an obligation to look out for the seller's best interests, even though it is explained to them at the beginning of the home buying process.  It is only natural for homebuyers that are customers to start to start to believe that they have a client relationship with the agent that they are working with because the agent spends so much time with them, and usually doesn't even know the seller.  This comfort level may result in the homebuyer divulging information that can ultimately be used against them in negotiations. 

Long Island homebuyers have the right to choose whether they want to be a client or a customer.  Below, you will find a list of the obligations that agents have to homebuyer clients, in addition to the the obligations that agents have to customers. 

Long Island homebuyer CLIENTS are entitled to the following:

CONFIDENTIALITY - Any information given to the buyer agent that is representing a client MUST remain confidential at all times.  By law, this same information must be passed on to the sellers when there is a customer relationship between the agent and the homebuyer.

CARE - The buyer agent is obligated to exercise reasonable care on the client's behalf, by applying their special real estate skills and expertise.

LOYALTY - The buyer agent must protect the buyer's interests before anyone else's, including their own.  The buyer agent must never take advantage of the opportunity to profit at the client's expense.

OBEDIENCE - The buyer agent must obey any lawful and ethical instructions that the client makes in accordance with the buyer broker agreement.

ACCOUNTING - The buyer agent is obligated to produce duplicate originals of all documents that affect the client.

DISCLOSURE - The buyer agent is duty-bound to pass along all facts or information obtained that could affect the client's purchasing decision, whether or not the client knows to ask for the information.

Long Island homebuyer CUSTOMERS:

Are entitled to factual information and fair and honest dealings, however, they are not entitled to advice, counsel and information obtained about the seller.

If you are buying a home on Long Island, you may recognize that it is customary for agents to represent the best interests of the seller.  While this is true, things are changing, and more and more buyers are choosing to have their own representation by working with a buyer's agent. 

This post is part of a continuing series which shows the advantages of working with a buyer's agent.  The next post in the series will discuss the disadvantages of dealing only with listing agents.  Please check back regularly for new posts in the series, or if you'd prefer, you can contact me and be put onto a list of people that receives each new post in the series via e-mail.  My contact information is listed below.  Thank you.