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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
BUYERS 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 defied in greater detail
below. Please read carefully before making your
choice.
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
sellers agent must
act honestly. In dealing with both parties,
a sellers agent may
not make any misrepresentations to either party
on matters material to the transaction, such as
the buyers 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, the 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.
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
buyers 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 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 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 buyers properties
owned by sellers for whom that firm is also
working as a seller's 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 buyers and to the sellers. 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 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
council 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. |
