 |
Consumer Information Statement on New Jersey Real
Estate Relationships
In New Jersey, real estate licensees are required
to disclose how they intend to work with buyers and
sellers in a real estate transaction. (In rental
transactions the terms "buyers" and "sellers" should
be read as "tenants" and "landlords," respectively.)
1. AS A SELLER'S AGENT OR SUBAGENT, I, AS A
LICENSEE, REPRESENT THE SELLER AND ALL MATERIAL
INFORMATION SUPPLIED TO ME BY THE BUYER WILL BE TOLD
TO THE SELLER.
2. AS A BUYER'S AGENT, I, AS A LICENSEE,
REPRESENT THE BUYER AND ALL MATERIAL INFORMATION
SUPPLIED TO ME BY THE SELLER WILL BE TOLD TO THE
BUYER.
3. AS A DISCLOSED DUAL AGENT, I, AS A LICENSEE,
REPRESENT BOTH PARTIES. HOWEVER, I MAY NOT, WITHOUT
EXPRESS PERMISSION, DISCLOSE THAT THE SELLER WILL
ACCEPT A PRICE LESS THAN THE LISTING PRICE OR THAT
THE BUYER WILL PAY A PRICE GREATER THAN THE OFFERED
PRICE.
4. AS A TRANSACTION BROKER, I, AS A LICENSEE, DO
NOT REPRESENT EITHER THE BUYER OR THE SELLER. ALL
INFORMATION I ACQUIRE FROM ONE PARTY MAY BE TOLD TO
THE OTHER PARTY.
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.
There are four business relationships; (1) seller's
agent; (2) buyer's agent; (3) disclosed dual agent;
and (4) transaction broker. Each of these
relationships imposes certain legal duties and
responsibilities on the licensee as well as on the
seller or buyer represented. These four
relationships are defined in greater detail below.
Please read carefully before making your choice.
SELLER'S 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 misrepresentation 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 a
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
"subagents". Sellers who do not desire to have their
property marketed through subagents should so inform
the seller's agent.
BUYER'S AGENT
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 to 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.
DISCLOSED DUAL AGENT
A disclosed dual agent WORKS FOR BOTH THE BUYER AND
THE 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
subagent.
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 affect 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 disclosed dual
agent, you are advised to sign a written agreement
with that firm.
TRANSACTION BROKER
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 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.
YOU MAY OBTAIN LEGAL ADVICE ABOUT THESE BUSINESS
RELATIONSHIPS FROM YOUR OWN LAWYER. THIS STATEMENT
IS NOT A CONTRACT AND IS PROVIDED FOR INFORMATIONAL
PURPOSES ONLY.
|
