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 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 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 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 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 buyer's. 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 subªagents 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 AGENCY
A disclosed dual agent WORKS 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 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 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 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 the seller will accept and
the parties' motivation to buy and 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 same 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 ADVISE ABOUT THESE BUSINESS RELATIONSHIPS
FROM YOUR OWN LAWYER.
THIS STATEMENT IS NOT A CONTRACT AND IS PROVIDED FOR INFORMATIONAL PURPOSES
ONLY.
ACKNOWLEDGEMENT OF RECEIPT OF CONSUMER INFORMATION STATEMENT (CIS)
FOR SELLERS AND LANDLORDS
"By signing this Consumer Information Statement, I acknowledge
that I received this Statement from Coldwell Banker James C. Otton Real Estate
prior to discussing my motivation to sell or lease or my desired selling or leasing
price with one of its representatives".
Signed _____________________________
FOR BUYERS AND TENANTS
"By signing this Consumer Information Statement, I acknowledge
that I received this Statement from Coldwell Banker James C. Otton Real Estate
prior to discussing my motivation or financial ability to buy or lease with one
of its representatives.
Signed _____________________________
DECLARATION OF BUSINESS RELATIONSHIP
I, ________________________________
(Name of Licensee)
as an authorized representative of Coldwell Banker James C. Otton Real Estate,
intend, as of this time, to work with you as a: (indicate one of the following)
[ ] Seller's agent only
[ ] Buyer's agent only
[ ] Seller's agent and disclosed dual agent if the opportunity arises
[ ] Buyer's agent and disclosed dual agent if the opportunity arises
[ ] Transaction broker only
[ ] Seller's agent on properties on which this firm is acting as the Seller's
agent and Transaction broker on other properties
DATE_______________________________