NJ changes home-buying rules: what this means for you

⚫ New rules went into effect on Aug. 1

⚫ The rules are designed to improve transparency

⚫ Some practices were already being used but are now required

Some big changes to the process of buying or selling a home in New Jersey are now in effect.

The aim of the new rules, created through legislation that was signed by Gov. Phil Murphy in July, is to increase transparency for folks on both sides of the transaction.

"It definitely will benefit both parties — buyers and sellers," said Gloria Monks, president of New Jersey Realtors.

The Real Estate Consumer Protection Enhancement Act went into effect on Aug. 1. The updates were floated in New Jersey after the National Association of Realtors agreed to a hefty settlement related to claims that the industry inflated real estate commissions.

Disclosure form

Before a buyer is contractually obligated, the seller must provide a completed property condition disclosure statement.

This form would, ideally, inform a prospective buyer about structural issues and other major issues related to the home in question.

"Prior to the legislation, most sellers still completed it, but it was not a required form," Monks said.

Sign first, then view

Before a wannabe buyer views a home with a real estate professional, an agreement needs to be signed between the two parties.

This is another system that had already been in place for many offices, but is now a requirement.

"This will spell out exactly what the agency is going to do for them, and how they're going to be compensated," Monks said.

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Open house signage

At an open house, signage needs to explicitly disclose that the listing agent represents the seller.

"It's for the buyer to see, so that they know that anything that they share with that agent is knowledge that the seller will find out," Monks said.

Prospective buyers would still be able to form an agreement with the listing agent on site, given they don't already have an agreement with another firm.

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