Understand Your Northern New Jersey Real Estate Agency Relationship

Before you hire a realtor, you should know the legal responsibilities your real estate agent has to you and to other parties in a buy/sell transaction. Ask what type of Northern New Jersey real estate agency relationship your agent has with you.  Here is what you need to know:

Seller’s Representative or Seller’s Agent

A seller’s representative or agent is hired by the seller and he or she should represent the seller’s interest. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.

Buyer’s Representative or Buyer’s Agent

A buyer’s representative or agent is hired by the one buying the property.  Buyers agent should represent the buyer in any real estate transactions and he or she should work in the interest of the buyer throughout the transaction.  A buyer’s representative owes fiduciary duties to the buyer.  The agent may be paid by the prospective buyer, or paid by the seller, or paid by the seller’s agent through a commission split.


Sub-agents should fully explain their duties to buyers and sellers at the onset.  In general, sub-agents have the same fiduciary duties to the customer as the agent does. Sub-agency usually occurs when an associate from another brokerage shows a property to a prospective buyer.  The sub-agent works with the buyer but owes fiduciary duties to the seller and seller’s agent.  The sub-agent cannot behave in a  manner that is detrimental to the seller; at the same time, the sub-agent should treat the buyer with honesty.

Disclosed Dual Agent

Dual agency is when the brokerage firm represents the buyer and the seller in the same real estate transaction.  In many states, this relationship must be disclosed and acknowledged in writing.  Dual agency is legal in most states when both buyer and seller are told that the agent is representing both of them.  Dual agents have limited fiduciary duties and the agency relationship does not include the traditional fiduciary duties.  Because of the potential of conflicts of interest,  it is vital that all parties give their informed consent.

Designated Agent or an Appointed Agent

Designated agents occur when a brokerage appoints which practitioners will act as an agent of the buyer and which will act as an agent of the seller. Designated agents prevent potential conflicts found in a dual-agency relationship. The two appointed agents give their respective clients full representation, with all of the accompanying fiduciary duties. The brokerage has the responsibility of supervising both groups of licensees.

Non-Agency Relationship or a Transaction Broker / Facilitator

Some states allow a real estate agent to have a non-agency relationship with a client. The rules vary considerably from state to state, but in general, the duties owed to the client (buyer or seller) are less than the traditional fiduciary duties of a real estate agency relationship.

Northern New Jersey Real Estate Agency RelationshipIf you have any other questions regarding your Northern New Jersey real estate agency relationship, please contact us at RE/MAX 100 and we’ll be more than happy to help: (973) 800-1700.