Over the past year, significant changes have been made that will affect how we sell or buy homes. These changes result from New Jersey legislation and national real estate practice changes resulting from an anti-trust lawsuit settlement.
On August 1, 2024, the NJ Real Estate Consumer Protection Enhancement Act was enacted. It requires ALL residential property sellers to provide a fully completed property condition disclosure form to prospective buyers BEFORE entering a purchase contract. The disclosure form, developed by the NJ Association of Realtors, is a comprehensive description of the material facts about the property, such as the age of the home and its heating/air conditioning systems, if it is serviced by public water and sewer, if it is located in a flood zone, etc. For most home sellers, this is a straightforward form to complete. For some, such as executors of homes being sold as part of an estate, it may be more difficult, especially if they have never lived in the home. A real estate professional can offer guidance on resources to obtain the information necessary to complete the disclosure form accurately.
Another important part of the NJ Real Estate Consumer Protection Enhancement Act is the requirement for ALL licensed realtors to provide all clients, whether buyers or sellers, with a brokerage service agreement. This agreement must be provided to consumers at the beginning of the home buying/selling process. It’s a great tool for consumers AND real estate professionals. It outlines what services will be provided to the consumer by the realtor. For example, realtors can provide due diligence on specific property facts, guide clients on fair market value, and negotiate on their clients’ behalf regarding pricing, terms, and inspections.
This service agreement makes real estate professionals accountable for the services they are expected to provide to buyers and sellers. It also explains the value real estate professionals provide to consumers. It’s important for consumers to understand the value that their realtor will provide during the sale or purchase of their home, as we enter an era of transparency about how realtors are paid for their work on behalf of buyers and sellers.
While real estate fees and commissions have always been negotiable, the settlement of an antitrust lawsuit filed in Missouri federal court (Sitzer-Burnett) between the plaintiffs (home sellers in Missouri) and the National Association of Realtors, has resulted in an improved process. This should benefit both buyers and sellers. The realtor commission will no longer be published in multiple listing systems (MLS), to avoid potential steering of buyers to properties where the commission paid to buyer agents is higher. Seller and buyer service agreements will explain the services to be provided by real estate professionals, as well as stating the commission to be paid by the buyer or the seller. While this can potentially save commissions and fees paid by home sellers, lenders are offering buyers the opportunity to finance the commission and fees, instead of paying out of pocket.
Just as when you hire an attorney or an accountant, you sign an agreement that details what services and representation you can expect, the new broker services agreement will explain what you can expect from your realtor.
For additional information please contact:
Diane Belcuore
Realtor ®
908-872-5473
dianebelcuore@optonline.net
NJ 5 STAR AWARD Winner 2014, 2015, 2016, 2017, 2018,2019,2020,2021
Accredited Staging Professional
