Real Estate Agency Relationship
One of the first things a Realtor must do is discuss agency relationship with their client, whether they represent a seller or a buyer. In New Jersey we basically have three types: Seller's Agent, Buyer's Agent, and Dual Disclosed Agent. Some states have Sub Agents and Transaction Agents.
I will try to explain simply:
A seller's agent works only for the seller and has fiduciary or legal obligations 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 misrepresent to either party any information material to the transaction, such as the buyer's financial position or ability to pay and must disclose defects affecting the physical condition of the property which would be evident by a reasonable inspection by the licensee.
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.
A buyer's agent works only for the buyer and has fiduciary or legal obligations to the buyer. This would 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. This is usually coupled with a deposit.
Dual agents work for both the buyer and the seller. To work as a dual agent, the Realtor must obtain informed, written consent from the buyer and seller. Before acting as a dual agent, brokerage firms must make written disclosure to both parties. This can simply mean RE/MAX to RE/MAX and doesn't necessarily have to be the same Realtor.
A subagent owes the same fiduciary duties to the agent's customer as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not the buyer’s agent, shows property to a buyer. In such a case, the subagent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller.
Call me today on 973-214-5872 to represent you on your Morristown NJ Real Estate transaction!