The most common practice of real estate brokers doing business on the East End of Long Island is to represent the seller rather than the buyer. Rarely has the broker represented the buyer in the Hamptons or North Fork. Even when the listing broker engages the cooperation of other brokers, those brokers represent the seller.
Devlin McNiff Halstead Property located in East Hampton, has broken new ground for East End brokers. This was the subject of a recent interview I did with Lynn Epstein, Director of Sales and owner of Devlin McNiff Halstead since 1991 together with her husband, Stuart Epstein. In October, 2011, Devlin merged with Halstead Property.
JAV: Why did you decide to merge with Halstead?
Well, the business had changed. Mainly to keep up with the technology. We weren't able to compete with the big guys with all their bells and whistles. We had been approached by other firms throughout the years, and finally when we decided to merge with another firm, we felt that Halstead was the right fit for us. Many of the Manhattan Halstead agents have homes out here as well as customers and clients, and asked us when we were going to open a Halstead office out here. Halstead is owned by the same company that owns Brown Harris Stevens
JAV: How has the merger benefited you?
Lynn Epstein of Devlin McNiff Halstead Property. (Courtesy Photo)
We are part of their advertising, and we get a lot of referrals from their Manhattan agents. We have been able to attract more agents to our office who want to be associated with a big name firm.
JAV: As you well know, many buyers and sellers are confused over who the broker represents. New York has tried to deal with this problem by requiring that the broker disclose who they are representing before doing business with them. According to the New York Department of State, the confusion continues to exist. Outside of New York, the most common practice is the listing agent represents the seller, and the prospective buyer is represented by a buyer's agent. I learned form one of your competitors that you have embarked on a way of conducting business, to the best of my knowledge, without precedent on the East End. Please address that.
As you correctly point out, everywhere else real estate is practiced with two agents, one representing the seller and one representing the buyer. When people come out to the East End to buy properties, many are shocked to learn that we represent the seller. When you tell them that you owe your fiduciary duties to the seller and honest and fair dealing to them, it usually makes for a difficult relationship. When you tell them that they are often confused and upset, and if you don't tell them that you are in violation of the law. Because I bought properties in other parts of the country where it was done differently, I felt it was a much more honest way to do business. On the bottom of our Halstead disclosure, (Author's Note: Not to be confused with the Agency Disclosure form required in NY State)
, it states, that when we have the listing we represent the seller, and when another broker has the listing we represent the buyer.
JAV: How have buyers reacted to that?
They're delighted. They assume that anyway. The reality is you spend all of your time with the buyer, develop a close personal relationship with them, and very often have not even met the seller. It is very hard to say you're representing the seller when your heart and your time are spent with the buyer.
JAV: How have your competitors reacted?
A lot of the agents don't understand it because they confuse commission with representation. (Author's Note: Who pays the commission does not determine representation)
. We spend a lot of time explaining this to other agents, but they are starting to become more accepting of this. It's much fairer and simpler.
JAV: How do you typically handle offers when you represent the buyer?
The real insiders know this location because it combines the prestige of Further Lane with the tranquility of a quiet Village Lane. Available for a July rental for $55,000. (Courtesy Photo: Devlin McNiff Halstead Property)
We submit the offer and state that the commission is part of the offer.
JAV: In other words, the commission you receive is the same as a broker representing the seller receives payable from the proceeds of the sale.
JAV: How have the sellers reacted?
It's an educational process. For a hundred years we have drummed into sellers that we represent the seller.
JAV: Do you find that brokers understand that under New York Law neither the seller nor the seller's agent may refuse to cooperate with a buyer's broker simply because the broker represents the buyer?
I don't think that is widely known.
JAV: Have you had situations where you represent the seller and the buyer also wants you to represent them?
That is happening more and more. People want to deal with listing agents. New York State Law makes that possible by entering into a Dual Agency arrangement with Designated Agents, one representing the seller and the other representing the buyer. In those situations, Stuart Epstein becomes the designated agent of the buyer.
JAV: How does your representation of sellers and buyers break down statistically?
About fifty, fifty. A number of those we have acted as a Dual Agent.
John is a St. John's University graduate, licensed Real Estate broker, lecturer, teaches real estate license classes at LIU and NYU, and acts as a consultant to the real estate industry. www.johnaviteritti.com