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I am sure you have heard about the new rules coming to real estate after the National Association of Realtors (NAR) settlement agreement. In New Jersey, those rules are being applied TODAY.
Here Is What You Need To Know
For Buyers: You now must sign an agreement with the agent you choose to represent you. Buyer agreements have always existed, but most agents did not enforce them. Under the agreement, you will negotiate and define the terms, compensation, and conditions you are willing to offer. The agreement can be limited by time, a specified area, or for a single-showing, but their compensation must not be open-ended. Additionally, the payment can be arranged so that the property owner covers your agent's compensation in whole or in part. This change stems from a new law preventing agents from sharing their commission, where the listing agent would have normally split it with the buyer's agent.
Note: You will no longer be able to see a property without this agreement. The only exceptions will be visiting open houses or a showing with the listing agent. Just understand that without an agreement, they are working as a representative of the owner and not you. So they will not be allowed to offer you advice of any kind.
In my opinion, the major benefit to a buyer is that they will receive much stronger representation across the board when working with a buyer's agent. Be sure to interview local agents and work with the ones you believe will offer the most value and service to you.
Read NAR's Buyer facts here
For Sellers: You are permitted to offer compensation to a buyer's agent, as you always have had the option to. However, it may not come from what you are paying the agent to sell/rent your property. Instead, it must come in the form of a concession and is completely negotiable. It is recommended to remain open to compensating a buyer's agent, but not to decide on an amount until you see the offers. Remember, everything is negotiable.
Another major rule change is that the seller disclosure is now required to be signed, regardless of whether you have lived in the property or not. Just answer to the best of your ability. This applies to rentals as well.
Read NAR's Seller facts here
There is more to expand on just this. Check out the links below or please feel free to reach out to me anytime with your questions. I'd be happy to answer them for you.
- Joe Charles
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