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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 Sellers
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
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 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; 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 WITH 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 buyer, 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 are called "sub-agents." Sellers who do not
desire to have their property marketed thought sub-agents should
so inform the seller's agent.
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BUYER'S
AGENT
A buyer's agent WORKS ONLY WITH 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 to
their agent.
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DISCLOSED
DUAL AGENT
A disclosed dual agent WORK
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 a written disclosure to both
parties. Disclosed dual agency is most likely to occur when a
licensee with a real estate firm when 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 to 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 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 parties interests ahead of those
of the other party and cannot advise or counsel either party on
how to gain advantage at the expense of the other party on the
basis on 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.
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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 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 advantage at the expense of
the other party. Owners considering working with a transaction
broker 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.
A Realtor is required to provide a
buyer or seller with a copy of this consumer information statement
before working with that buyer or seller.
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