Starting August 17, 2024, significant changes will impact home buyers in New Jersey due to a new law and a settlement agreement involving the National Association of Realtors (NAR). These changes follow a federal class-action antitrust lawsuit that ruled against NAR and major brokerages for colluding to inflate seller commissions.
Here are the key points:
1. Removal of Broker Compensation Fields:
Multiple Listing Services (MLS) will no longer display fields indicating broker compensation. Listing agents can no longer specify upfront compensation for buyer agents on MLS platforms (www.nar.realtor) (Mortgage Reports).
2. Mandatory Buyer Agreements:
Buyers must enter into written agreements with their agents before touring properties. This applies to both in-person and virtual tours. These agreements clarify the services provided and the compensation expected (Mortgage Reports) (RealEstateNews.com).
3. Prohibition on Compensation Offers in MLS:
Offers of compensation between listing brokers or sellers to buyer brokers will be prohibited within MLS platforms. This includes any non-MLS mechanisms or data feeds that could facilitate such offers (www.nar.realtor).
4. Transparency and Disclosure:
There will be increased transparency regarding agent compensation, with required disclosures to both sellers and buyers. This aims to ensure that consumers understand the costs associated with real estate transactions (www.nar.realtor).
5. Flexibility in Compensation Agreements:
Agents and buyers can negotiate various compensation structures, such as set amounts, percentages, or hourly rates, as long as they are objectively ascertainable and not open-ended (RealEstateNews.com).
These changes aim to enhance transparency and fairness in real estate transactions, potentially reducing costs for buyers. However, some experts believe that while the changes might lead to cost savings, sellers might absorb these savings rather than passing them on to buyers (Mortgage Reports) (RealEstateNews.com).
Starting August 1, 2024, New Jersey will implement significant changes in real estate transactions under the new Real Estate Consumer Protection Enhancement Act. Here are the key aspects of this law:
1. Mandatory Buyer Representation Agreements: Buyers must have a formal agreement with their real estate agents, outlining the agent’s responsibilities and compensation structure. This agreement ensures that the agent can legally advocate for the buyer throughout the transaction process.
2. Seller's Property Condition Disclosure: Sellers are now required to provide a signed disclosure form detailing the condition of the property. This aims to enhance transparency and provide essential information to potential buyers.
3. Designated Agency: This allows a managing broker to appoint an agent within the same office to represent a buyer, ensuring better service and representation for both buyers and sellers.
4. Disclosure of Representation at Open Houses: Agents must clearly disclose their representation status during open houses, helping buyers understand who the agent represents.
These changes are designed to provide better protection and clarity for both buyers and sellers in real estate transactions (Deeds)