Consumer Information Statement
Whether you are a buyer or a seller of real estate you should know who the firm
you are dealing with is working for (the buyer, the seller, both or neither).
If they won't assure you (in writing) that they are working FOR you be very cautious in giving
them information. At NJHomeBuyer.com Realty we ALWAYS work for the buyer. We will even put
this in writing in a contract with you if you desire. Oh, and NO, this does NOT increase your cost
of purchasing a home. In fact, we will work to help you decrease your costs.
The New Jersey Real-Estate Commission has issued a consumer information statement
on New Jersey Real Estate Relationships. It defines four kinds of business relationships
that can exist between real-estate agents and their clients or customers.
Before you disclose confidential information to a real estate licensee regarding a
real estate transaction, you should understand what type of business relationship you have with that licensee.
A buyer's agent WORKS ONLY FOR THE BUYER. A buyer's agent has fiduciary duties to
the buyer which include reasonable care, undivided loyalty, confidentiality and
full disclosure. However, in dealing with sellers a buyer's agent must act honestly.
In dealing with both parties, a buyer's agent may not make any misrepresentations on
matters material to the transaction, such as the buyer's financial ability to pay, and
must disclose defects of a material nature affecting the physical condition of the property
which a reasonable inspection by the licensee would disclose.
A buyer wishing to be represented by a buyer's agent is advised to enter into a separate written
buyer agency contract with the brokerage firm which is to work as their agent.
A seller's agent WORKS ONLY FOR THE SELLER
and has legal obligations, called fiduciary duties,
to the seller. These include reasonable care, undivided loyalty, confidentiality and full disclosure.
Seller's agents often work with buyers, but do not represent the buyers. However, in working with buyers
a seller's agent must act honestly. In dealing with both parties, a seller's agent may not make any
misrepresentations to either party on matters material to the transaction, such as the buyer's financial
ability to pay, and must disclose defects of a material nature affecting the physical condition of the property
which a reasonable inspection by the licensee would disclose.
Seller's agents include all persons licensed with the brokerage firm which has been authorized through
a listing agreement to work as the seller's agent.
In addition, other brokerage firms may accept an offer
to work with the listing broker's firm as the seller's agents. In such cases, those firms and all persons
licensed with such firms, are called "sub-agents." Sellers who do not desire to have their property marketed
through sub-agents should so inform the seller's agent.
Disclosed Dual Agent
A disclosed dual agent WORKS FOR BOTH THE BUYER AND SELLER. To work as a dual agent, a firm must first obtain
the informed written consent of the buyer and the seller.
Therefore, before acting as a disclosed dual agent,
brokerage firms must make written disclosure to both parties. Disclosed dual agency is most likely to occur when
a licensee with a real estate firm working as a buyer's agent shows the buyer properties owned by sellers for whom
that firm is also working as a seller's agent or sub-agent.
A real estate licensee working as a disclosed dual agent
must carefully explain to each party that, in addition to working as their agent, their firm will also work as the
agent for the other party. They must also explain what effect their working as a disclosed dual agent will have on
the fiduciary duties their firm owes to the buyer and to the seller. When working as a disclosed dual agent, a
brokerage firm must have the express permission of a party prior to disclosing confidential information to the other
party. Such information includes the highest price a buyer can afford to pay and the lowest price a seller will accept
and the parties' motivation to buy or sell.
Remember, a brokerage firm acting as a disclosed dual agent will not be able to put one party's interests ahead of those
of the other party and cannot advise or counsel either party on how to gain an advantage at the expense of the other party
on the basis of confidential information obtained from or about the other party.
If you decide to enter into an agency
relationship with a firm which is to work as a disclosed dual agent, you are advised to sign a written agreement with that firm.
The New Jersey Real Estate Licensing Law does not require licensees to work in the capacity of an
"agent" when providing brokerage services. A transaction broker works with a buyer or a seller or
both in the sales transaction without representing anyone. A TRANSACTION BROKER DOES NOT PROMOTE
THE INTERESTS OF ONE PARTY OVER THOSE OF THE OTHER PARTY TO THE TRANSACTION. Licensees with such a
firm would be required to treat all parties honestly and to act in a competent manner, but they would not
be required to keep confidential any information. A transaction broker can locate qualified buyers for a
seller or suitable properties for a buyer. They can then work with both parties in an effort to arrive at
an agreement on the sale or rental of real estate and perform tasks to facilitate the closing of a transaction.
A transaction broker primarily serves as a manager of the transaction, communicating information between
the parties to assist them in arriving at a mutually acceptable agreement and in closing the transaction,
but cannot advise or counsel either party on how to gain an advantage at the expense of the other party.
Owners considering working with transaction brokers are advised to sign a written agreement with that firm
which clearly states what services that firm will perform and how it will be paid. In addition, any transaction
brokerage agreement with a seller or landlord should specifically state whether a notice on the property to be
rented or sold will or will not be circulated in any or all Multiple Listing System(s) of which that firm is a member.