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Agency Disclosure
Information
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 SUB-AGENT, 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 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 types of 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 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.
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
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.
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 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.
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 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.
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