Agency
A NJ buyer's agent recommends three contractors for home repairs without receiving referral fees from them. This action is:
AProhibited under NJ license law
BPermissible as a service to the client, so long as the agent discloses any pre-existing relationships and does not profit from the referral✓ Correct
COnly permissible after closing
DA violation of RESPA in all cases
Explanation
Recommending contractors is a normal buyer agency service. It only becomes problematic (RESPA violation, conflict of interest) if the agent receives undisclosed referral fees or has a financial interest in the contractor's business.
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Key Terms to Know
Agency
A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Buyer's AgentA real estate licensee who represents the buyer's interests in a transaction, owing fiduciary duties to the buyer.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Dual AgencyA situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.
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