In many parts of New Jersey, high residential real estate prices and low inventory have made it very difficult for families looking to purchase a new home. Many buyers have felt compelled to make decisions quickly and without a full understanding of the transaction process. Now, a new law is designed to increase transparency so that individuals and families looking for a new residence have the information they need to make sound decisions.
Having taken effect on August 1, 2024, the New Jersey Real Estate Consumer Protection Enhancement Act (RECPA) sets forth specific obligations for developers, real estate professionals and home sellers. Specific elements of this legislation include the following:
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Property disclosure requirement — Under RECPA, parties looking to sell a home must provide comprehensive information to prospective buyers, such as descriptions of environmental hazards, structural defects and legal disputes that might affect the property’s value.
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Disclosure of realtor’s interests — Confusion about whom a realtor is representing can lead to problems, particularly among first-time home buyers. Now, at every open house, the listing agent must post a sign that says they are acting on the seller’s behalf.
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Brokerage services agreements — Before listing agents perform any services for residential real estate sellers, they must have a signed brokerage services agreement with their client. Likewise, an agreement must also be executed if a realtor is acting as exclusive agent for a possible buyer.
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Flexible commission terms — In accord with changes involving real estate professionals from all over the country, various types of commission arrangements are now allowed. This breaks from the previous standard where the selling agent received the full commission amount and they divided it with the buyer’s agent on terms usually not made available to the parties. Going forward, each side can negotiate commission amounts with their own realtor.
While RECPA provides robust protections, there are still many pitfalls that should be avoided in real estate transactions. If you’re purchasing or selling property in New Jersey, consulting a qualified attorney is crucial. At Frieri Law Group, we work to ensure clients’ interests are protected every step of the way. To make an appointment, please call 908-883-3390 or contact us online. Our office is in Cranford and we serve clients throughout the area, including Union, Morris and Somerset counties.