Before a New Jersey brokerage does any work, it has to say how it will work. State law gives the relationship one of four names — seller's agent, buyer's agent, an agent acting for both sides with disclosure, or transaction broker — and the Consumer Information Statement, which the brokerage must provide and have acknowledged, explains each one before a brokerage services agreement is signed. The names are not marketing. Each carries a different set of duties, and the fourth is the one most often misunderstood.
Representation is the dividing line
An agent represents a principal, and the law binds the agent to that principal's interest alone. A transaction broker, as the 2024 statute (N.J.S.A. 45:15-16.86) defines it, is a brokerage firm that “works with a buyer or a seller, or both, in a real estate transaction without representing either party,” has no agency relationship with either, and is bound to neither side's interest. New Jersey law does not require licensees to act as agents when they provide brokerage services; transaction brokerage is the non-agency route the law itself provides.
Two consequences follow, and both should be understood before anything is signed. A transaction broker must not promote the interest of one party over the interest of the other. And a transaction broker is not required to keep any information confidential — what one party tells the firm, the firm may tell the other. Anyone who needs an advocate, or needs confidences kept, needs a different relationship, named as such in writing.
What the transaction broker still owes
Removing representation does not remove duty. Section 45:15-16.94 lists what a transaction broker owes the parties, and the list is operational, not ceremonial: perform the terms of the brokerage services agreement made with any party; treat all parties honestly and act in a competent manner; locate qualified buyers for a seller or suitable properties for a buyer; present all written offers and counteroffers in a timely manner, with written confirmation of receipt to the other party; keep the parties fully informed regarding the transaction;
The remaining duties are to work toward an acceptable agreement without advising any party how to gain an advantage at the expense of the other; to advise the parties to seek expert advice on matters relating to the transaction; and to manage the transaction and perform the tasks that facilitate its closing. Any further duties can be added — but only in a writing signed by the firm.
Read as a whole, that is a manager's job description. The transaction broker runs the process — information, offers, deadlines, documents, closing — on even terms, and leaves the strategy to each party and the experts each party engages.
