Buying a home at the Jersey Shore? Congratulations…Let’s take a look at some of the things to consider before you sign on the dotted line.
- New Jersey Real Estate Agency Relationships
- Lenders and Loans
- Homes and Communities
- The Contract – Contractual Provisions
- Offer and Acceptance - Attorney Review
The current Real Estate Agency Law in New Jersey is relatively new. Here’s a brief history of real estate agency law in New Jersey. Prior to the 1995 every real estate agent worked for the seller. The law setting up 4 types of real estate agency and disclosure of agency was enacted in New Jersey after a national study found state laws to be lacking.
New Jersey now has strict real estate agency laws, and requires real estate agents to tell clients upfront, before any “substantial contact”, how they’ll be working. That means before a buyer begins to relate information about the type, location or price range of the property he or she desires or before a seller discusses his or her motivation for listing.
New Jersey Real Estate Agency relationshipsare detailed in the New Jersey Consumer Information Statement (CIS). Law requires the CIS be reviewed prior to any discussions. The full Consumer Information Statement can be found here.
Briefly, there are four types of real estate agency in New Jersey. They are:
- Seller’s Agentworks only for the seller. The agent has fiduciary duties or legal obligations to the Seller. These include care, undivided loyalty, confidentiality and disclosure. Seller’s agents include all persons licensed with the brokerage firm authorized to list the property (more on this under disclosed dual agency).
- Buyer’s Agentworks only for the buyer. A buyers agent has fiduciary responsibilities to the home purchaser; care, loyalty, confidentiality and disclosure.
- Transaction Broker represents neither the buyer nor the seller. They locate qualified buyers for a seller or suitable properties for a buyer.
- Disclosed Dual Agent works for both the buyer and the seller. Prior to working as a Disclosed Dual Agent the brokerage firm must first obtain informed written consent from both the buyers and sellers. A Disclosed Dual Agent in New Jersey MAY NOT, without express permission, disclose that the seller will accept a price lower and list, nor can the Disclosed Dual Agent disclose that a buyer would pay more than the offered price.
Disclosed Dual Agencyin New Jerseymost often occurs when a real estate agent with a firm is working as a Buyer’s Agent and shows the buyer properties owned by sellers who have listed their property with that firm.
Real estate sales persons in New Jersey act as representatives of their broker. Therefore disclosed dual agency occurs when the buyer looks at ANY property listed by the same broker, not only properties listed by the agent. Remember a disclosed dual agent can not put one party’s interest above another.
If real estate agency relationships in New Jerseyare still unclear, ask questions when you interview real estate agents to represent you. Or, as in any step during the home buying process in New Jersey, ask an attorney.
Where can you find a real estate agent to represent you? Ask friends and relatives who they’ve dealt with. Research online, reading blogs and examining websites can give you a glimpse of the agent’s interests and specialties. If you'd like an agent with advanced training in representing buyers, find an Accredited Buyers Representative (ABR®). Check out this website to find an agent with the ABR® designation.
Prepare a list of questions that are important to you. Ask about the agent’s knowledge of the area, what they’ll provide for you and their strategy for finding your next home. Ask about continuing education (CE). New Jersey has no CE requirements, so find an agent that takes continuing education seriously. Don’t be afraid to ask for references. Speak to the agent’s previous clients to get a better idea of the agent’s strengths and weaknesses.
Just as a Buyer’s Agent provides ‘undivided loyalty' you, as a home buyer, should do the same. REALTORS® in most cases don’t get paid til they get to the closing table. So you’ll want to find a buyer’s agent that you can work with and stick with them.
You can still search for homes on the internet, through friends or at Open Houses. Just make sure it’s understood, You’re Already Working With An Agent.