Consumer Information Statement - Read before using my site & Privacy Policy

Consumer Information Statement

Understand how to engage an agent.  If you haven't signed a Buyer's Agency agreement, you, the buyer, have not really hired an agent to work on your behalf.

Under a Transaction Broker arrangement, they are only being hired to assist you with completing a Contract of Sale and providing access to potential properties. There is an underlying assumption you are doing your own due diligence. A Buyer's Agency Agreement often results in higher insurance premium costs to the agent as well as more research and due diligence. An agent cannot take on the added time and expense without a commitment from the buyer that he/she will guarantee he/she will use his services.

Under a buyer's agency agreement, the agent becomes LIABLE to work on your behalf and help you with all the due diligence.  They are LIABLE for proactively raising concerns and telling you about things you should consider when buying.  For example and by no means an exhaustive list, the agent would become responsible for reviewing the condo financials and giving you an opinion about whether or not they are sound given the size and age of the building.  Another example might be raising the issue of site remediation if the building was built on an old industrial site (like many many buildings in Hoboken) or near an industrial area where runnoff could effect the building.  She would become LIABLE for alerting you about any local Ordinances such as rent control which is a huge concern in Hoboken.  She would become liable for informing you that the legal rents may vary from the market rent.  She would become responsible for reviewing the inspection and appraisal to proactively point out concerns.

If any of these things are done without a buyer's agency agreement in place, then the agent is performing these tasks at will.  That is, if it doesn't interfere with other business or take too much time or create any other risk.  That means that an agent may omit pointing something out to you that may be difficult to raise.  It's ultimately why a transaction broker albeit not under contract with the seller has more incentive to work on behalf of the seller to get the transaction to go through and move onto the next deal.  Under a buyers agency agreement, the buyer has committed to working with that agent for, typically, 6 months which means they will earn a commission eventually. 

This is not a popular form of hiring an agent here in Hudson County. Some of the resistance is just because it's not customary here. Or, many buyers are afraid of making a commitment to a particular agent for a typical 6 month contract period. But when you hire an agent using a Buyer's Agency agreement, the agent has a greater responsibility to forewarn you of the pitfalls of buying.

Buyer's agency commissions are typically more than a transaction brokers commission.  That is, a buyers agent is doing more work and taking more risk and they typically get a half a point to a whole point more in commission than what is being offered to transaction brokers.  I have seen 3 to 4% commissions on the residential side and more on a commercial deal.  If the seller is not offering a commission to buyer's agent, which is there prerogative, and the buyer still buys that property, the buyer has to pay the full commission.  Unfortunately, people don't know what they don't know until they have bought it and something comes up.  A clear example in Hoboken are all of these Landlords who have lost $10s of thousands of dollars when buying a multi-family only to find out by buying it they have become liable for years of overcharged rents.  If they had a buyers agency agreement, they could have pursued the agent.

Above is a link to the full Consumer Information Statement.  I have described here in non-legalese why this should be important to you.  Please go to the Consumer Information Statement to read exactly how the forms of agency differ and knowingly engage an agent in a manner that suits you.

The Consumer Information Statement that describes the difference between a seller's agent, buyer's agent, transaction broker and a dual disclosed broker.

If you use an agent as a Transaction Broker please be prepared to do all of the due diligence on your own.  

Please read and review the consumer information statement before using any of the tools on my site.  For any tool that requires you to register with at least your email address, read the consumer information statement first.  By providing your email address, you acknowledge that you have been provided the consumer information statement.  We strip off you name as it is registered on your email account and that your email account where content is delivered is password protected. 

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