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08/02/2024
On 8/1/2024, the Real Estate Consumer Enhancement Protection Act went into effect as a NJ state law. If you are a buyer looking for a home or are thinking of starting the process, these are the following changes you need to be aware of:
1.) If you would like to see a house with a real estate agent, you will need to sign an “Exclusive Buyer Agency Agreement”. This document will spell out exactly how the agent you see a property with will be paid, as well as the length of time the agreement is valid for.
***Please note, that while sellers have NEVER been required to offer a Buyer’s Agent compensation, for many years they have, which may have given the impression to a buyer that it was free to have representation by a Buyer’s Agent. In reality, the sellers already baked in the price of the additional compensation paid to a Buyer’s Agent into their asking price. While many sellers will continue to offer compensation to Buyer’s Agents to receive maximum exposure of their property, it is very possible that the seller will offer less, or no compensation to a Buyer’s Agent. That means a buyer may be responsible for covering the cost of their agent, as your Buyer Agent doesn’t work for free. Additionally, these offers of compensation will not be advertised on any centralized source such as an MLS.***
2.) Sellers are now REQUIRED to provide a Property Condition Disclosure BEFORE a buyer makes an offer on a property. Previously, these were optional disclosures.
3.) Listing Agents must display signage at an open house indicating that they represent the seller and any information obtained at an open house from prospective purchasers may be shared with the seller.
***PLEASE NOTE - if you are a buyer who goes to open houses, you do NOT have to sign an “Exclusive Buyer Agency Agreement” to attend an open house. Just be aware that the agent who is hosting that open house has no fiduciary duty to protect your interests.
***Addtionally, if you are a buyer who attends open houses and you have a signed “Exclusive Buyer Agency Agreement” with an agent, you MUST disclose that when signing in at an open house.
There are a few other changes, but these are the ones that affect the consumer the most. It’s important that you understand how these new laws will affect you. Please understand when you’re interested in looking at properties, if an agent is asking you to sign a representation agreement, this is not a choice, but rather is the LAW in the State of NJ.
If you have any questions, please don’t hesitate to reach out.
If you’re an agent who doesn’t understand these changes or has questions about them, please reach out. As a brokerage, Century 21 Thomson & Co. has been preparing for this for 6 months and our agents are well prepared for these changes
