Buying a Home in New Jersey

Besides finding the property of your dreams, you should understand the process of buying a house and working with a Licensed Real Estate Agent. While there is a small chance you will find a F.S.B.O (for sale by owner), you will likely be using an agent when buying.

The reason people tend to buy with an agent is because agents have access to all the properties. We literally have the “keys” you need to get in. Plus working with a buyers agent is free, but more on that in a minute.

Selling is a different side of the transaction. While it can be advantages to sell “by owner”, it tends to only work in an up market with a strong appraisal value. This is also why you should list (sell) using an agent. Agents have more access to the data, these are the tools of the trade.

Here are the simple facts you need to know about the home buying process in New Jersey.

Who Pays the Commission in when Buying a Home?

The Seller

The buyer does not pay a commission in a real estate transaction. The commission (on both sides of the transaction) is paid by the Seller and included in the sales price.

The Real Estate Commission Structure benefits Buyers and Sellers alike.

If Buyers had to pay real estate commissions directly, it would add thousands of dollars to an already costly transaction.

The cooperative commission agreement between buyer and seller brokers prevents the cost burden from being placed on home buyers.

Since most lenders don’t allow real estate commissions to be financed, every 1% of the commission would put a home $2-5K further out of reach.

Why are two Agents used in a Real Estate transaction?

Buyers and Sellers should each be represented by a Real Estate Agent/Broker of their choice. Preferably from two different brokerages. This prevents a conflict of interest during the buying process. While it is legal for one agent to represent both parties, it is strongly advised against and is impossible to avoid a conflict of interest.

Buyers Never Pay Commission

It is free to use an agent as a buyer. A buyers agent is working for the commission of the property you choose to buy. If you don’t find a property, we don’t get a commission.

What is the main purpose of a Real Estate Agent?

The main purpose of a Real Estate Agent is to prevent fraud (protect you) by acting as a fiduciary, representing your best interests in the Real Estate transaction. Agents and Brokers have a fiduciary responsibility that legally requires them to act on your behalf, not theirs or anyone else’s. This pertains to all aspects of the sale process.

Should you Contact the Listing Agent?

Not Likely

This will create a conflict of interest. The listing agent represents the Seller and has (a fiduciary responsibility) to look out for the seller’s best interest.

What will happen if you call the listing agent?

The listing agent or broker (if ethical) will likely refer you to another agent in their office for the showing to avoid the conflict of interest. However it becomes a little of a grey area at that point since they are all under the same brokerage. A better idea is to have your agent (buyer’s agent) provide you with access to the property you want to see.

But what if you still want to try and get a better deal? You got this…

Can you get a better deal from the Listing Agent?

Not Likely

You are not likely to get a better deal going directly to the listing agent. Why?

This is a common misconception by the public. The thought process here is that if you deal directly with the listing agent, you will receive an advantage of some sort. However,

  • Sellers are unlikely to ask their agent to reduce the commission.
  • A listing contract is in place with the seller and agents are not obligated to reduce commissions.
  • Many agents uphold commission standards to protect the integrity of the practice.

In addition…

Any information you can get from a listing agent, can also be found from working with a buyer’s agent. There are no secrets here. In fact, there are only things a listing agent cannot share with you due to their fiduciary responsibility to the seller. Explained previously with the conflict of interest.

Why would a listing agent discount their commission?

Say the listing agent gives up a few thousand dollars to make the deal work. Since the buyer (you) is unrepresented or under represented for the “discount”, more work is created for the listing agent and that “bigger commission”. However who has your best interest when that work is being done?

Even if you get a listing agent to reduce their commission, “you” will likely have to earn that savings, and then some. Times, dates, extensions, home inspections, repairs, etc., are all negotiable and can end up costing or saving you time and money.

You are paying a real estate professional for representation and experience.  Go directly to the listing agent and you will be unrepresented.  You are on your own.

You need to consider your skill level when buying a property.  Have you purchased a property before, a few times, or is this the first time. Do you know enough to manage the entire process by yourself? Are you willing to risk any monies in escrow because you missed something important? Do you have the time? 


Buyers don’t even pay the commission. Only Sellers can avoid a commission by choosing not to work with an agent (F.S.B.O). A buyer’s agent can save you time, which often equals more money than the perceived savings.

Ready to take the first step? Choosing the right agent is important. I look forward to having a friendly discussion so I can help you make the right decision.

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