Understanding Buyer Representation in PA and NJ
The rules changed in 2024. Most buyers are still figuring out what that means. We've pulled the actual law together in one place — every claim cited to its source.
WHAT CHANGED IN 2024
A nationwide shift in how buyers and agents work together.
In August 2024, the National Association of REALTORS® adopted new MLS policies as part of a national settlement agreement. Two of those policies directly affect anyone buying a home today.
From NAR Policy Statement 8.13 — Written Buyer Agreements Required:
All MLS Participants working with a buyer must enter into a written agreement with the buyer prior to visiting any property. The written agreement must include:
- a. a specific and conspicuous disclosure of the amount or rate of compensation the Participant will receive from any source, or a specific and conspicuous ceiling that the Participant will receive from any source;
- b. the amount of compensation in a manner that is objectively ascertainable and not open-ended;
- c. a term that prohibits the Participant from receiving compensation for real estate brokerage services from any source that exceeds the amount or rate agreed to in the agreement with the buyer; and
- d. a conspicuous statement that real estate commissions and fees are not set by law and are fully negotiable.
Source: NAR Summary of 2024 MLS Changes — Policy Statement 8.13
From NAR Policy Statement 8.12 — Required Consumer Disclosure:
Disclosure of Compensation: MLS Participants and Subscribers must:
- 1 1. Disclose to prospective sellers and buyers that broker compensation is not set by law and is fully negotiable. This must be included in conspicuous language as part of any listing agreement, buyer representation agreement, and pre-closing disclosure documents (if any).
- 2 2. Conspicuously disclose in writing to sellers, and obtain the seller's authority, for any payments or offer of compensation that the listing broker or seller will make to other brokers, agents, or other representatives (e.g., real estate attorney) acting on behalf of a buyer; and such disclosure must include the amount or rate of any such payment and be made in writing in advance of any agreement to pay.
Source: NAR Summary of 2024 MLS Changes — Policy Statement 8.12
These two policies apply nationwide to MLS participants. The specific forms, terminology, and additional state-level requirements vary between Pennsylvania and New Jersey, which we cover below.
We cover both sides of the bridge — and the rules differ on each side.
Pennsylvania and New Jersey each have their own laws on buyer agency, required disclosures, and the forms agents use. Select your state to see what applies.
The Pennsylvania Consumer Notice
Pennsylvania law requires every real estate licensee to give consumers a Consumer Notice at the very first substantive contact. It explains the different types of business relationships you can have with a real estate licensee — and importantly, it is not a contract.
From the Pennsylvania Code:
"In an effort to enable consumers of real estate services to make informed decisions about the business relationships they may have with real estate brokers and salespersons (licensees), the Real Estate Licensing and Registration Act (RELRA) requires that consumers be provided with this Notice at the initial interview."
"Before you disclose any financial information to a licensee, be advised that unless you select a business relationship by signing a written agreement, the licensee is NOT representing you. A business relationship is NOT presumed."
The Buyer Agency Contract
The Consumer Notice explains the relationships you can have. The Buyer Agency Contract is what creates the actual representation relationship between you and a buyer's agent. Pennsylvania law specifies what every written agreement between a broker and a buyer must contain.
From the Pennsylvania Code:
"A written agreement between a broker and a principal or between a broker and a consumer whereby the consumer is or may be committed to pay a fee, commission or other valuable consideration shall contain the following:"
"Notification that the broker's commission and the duration of the agreement have been determined as a result of negotiations between the broker and the consumer."
"[...] In an agreement between a broker and a buyer/tenant, an explanation that the broker may be compensated based upon a percentage of the purchase price, the broker's policies regarding cooperation with listing brokers willing to pay buyer's brokers, a disclosure that the broker, even if compensated by the listing broker or seller/landlord will represent the interests of the buyer/tenant and a disclosure of any potential for the broker to act as a dual agent."
How compensation works in Pennsylvania
Pennsylvania doesn't set buyer-agent commissions. The amount, the structure, and the duration of the agreement are all negotiated between you and your broker — and that negotiation must be reflected in writing in the Buyer Agency Contract.
From the Pennsylvania Code:
"Notification that the broker's commission and the duration of the agreement have been determined as a result of negotiations between the broker and the consumer."
Who your agent represents (even if the seller pays them)
This is one of the most misunderstood points in real estate. In Pennsylvania, a buyer's agent represents the buyer's interests — even if the listing broker or seller pays the buyer's agent's compensation. The source of payment does not change who the agent represents. Pennsylvania law explicitly requires this disclosure in the Buyer Agency Contract.
From the Pennsylvania Code:
"[A] disclosure that the broker, even if compensated by the listing broker or seller/landlord will represent the interests of the buyer/tenant and a disclosure of any potential for the broker to act as a dual agent."
Exclusivity and termination
A Buyer Agency Contract in Pennsylvania can be exclusive — meaning you agree to be represented by that broker for the term of the agreement. Termination terms are negotiated as part of the contract. Read these terms carefully before signing.
From the Pennsylvania Association of REALTORS® on the Buyer Agency Contract (Form BAC):
"The Buyer Agency Contract (Form BAC) is the exclusive agency contract for buyers' and tenants' agents. By signing this contract, the buyer or tenant agrees to be represented by the broker and no other. Neither side has an automatic right to terminate and walk away unless both sides negotiate that term into the contract."
The Real Estate Consumer Protection Enhancement Act (CPEA)
New Jersey passed a state-level law in July 2024 that took effect August 1, 2024. The CPEA expanded consumer protections, mandated written brokerage agreements in residential transactions, and added a new type of agency relationship called designated agency.
From NJ Department of Banking and Insurance Bulletin 24-11:
"P.L. 2024, c.32 ('Act') was signed into law on July 10, 2024 and becomes effective on August 1, 2024. The Act supplements the New Jersey Real Estate Broker and Salesperson Act, N.J.S.A. 45:15-1 to -42."
"Specifically, the Act makes the following changes to current law: codifies the different types of permitted business relationships between real estate brokerage firms and principal, and the obligations applicable to each; creates a new type of agency relationship, called designated agency, necessitating changes to the text of the Consumer Information Statement [...]; requires that brokerage firms enter into a brokerage services agreement in all residential real estate transactions [...]"
Source: NJ DOBI Bulletin 24-11
The Brokerage Services Agreement (BSA)
Under the CPEA, your agent must have a written Brokerage Services Agreement with you in any residential real estate transaction. This agreement establishes the relationship, the services, the term, the compensation, and whether the relationship is exclusive or non-exclusive.
From NJ DOBI Bulletin 24-11:
"The Act requires brokerage firms to enter into a written agreement, called a brokerage services agreement ('BSA'), with the buyer or seller, as applicable, in all residential real estate transactions [...]"
"BSAs must specify the term of the agreement and set forth the amount of the brokerage firm's compensation as well as how it will be calculated. [...] BSAs are required to include a disclosure expressly stating that broker compensation is fully negotiable and not set by law."
Source: NJ DOBI Bulletin 24-11
The Consumer Information Statement (CIS)
Before working with you, a New Jersey real estate licensee must give you a Consumer Information Statement that explains the different types of business relationships available. Under the CPEA, the CIS must be included as part of the Brokerage Services Agreement, and the agent must obtain a signed acknowledgment of receipt.
From NJ DOBI Bulletin 24-11:
"The CIS is an informational document that summarizes the various business relationships and accompanying legal duties to help ensure that buyers and sellers make informed decisions regarding business relationships with brokerage firms."
"The Act requires brokerage firms to provide buyers and sellers with the CIS and obtain a signed acknowledgement of receipt in certain contexts. [...] Furthermore, the CIS must be included as part of the brokerage services agreement."
Source: NJ DOBI Bulletin 24-11
Designated Agency (new under the CPEA)
The CPEA created a new agency relationship called designated agency. In a designated agency arrangement, one brokerage firm represents both buyer and seller in the same transaction, but assigns different individual licensees to represent each side. Both parties must give written informed consent for designated agency to apply.
From NJ DOBI Bulletin 24-11:
"Designated agency entails a transaction in which a brokerage firm designates different individual licensees affiliated with the firm to solely represent the buyer as the buyer's agent and another to solely represent the seller as the seller's agent. [...] Each designated agent solely represents, and has an agency relationship with, the party whom they have been designated to represent."
"In order for a designated agency relationship to take effect, the brokerage firm must obtain the informed written consent of both parties to the transaction."
Source: NJ DOBI Bulletin 24-11
How compensation works in New Jersey
Under the CPEA, broker compensation can come from one or more parties — the seller, the buyer, a third party, or shared between brokerage firms. The structure is flexible (flat fee, percentage, or other method), but the BSA must spell out the terms. New Jersey law explicitly requires the agreement to state that compensation is fully negotiable.
From NJ DOBI Bulletin 24-11:
"The Act provides that a brokerage firm may be compensated by more than one party for real estate brokerage services in a real estate transaction regardless of the agency or transaction broker relationship the brokerage firm has with the parties. [...] In any real estate transaction, a brokerage firm's compensation may be paid by one or more of the following: the seller; the buyer; a third party; or by sharing the compensation between brokerage firms."
"BSAs are required to include a disclosure expressly stating that broker compensation is fully negotiable and not set by law."
Source: NJ DOBI Bulletin 24-11
Open House signage
When you walk into a residential open house in New Jersey, the listing agent is required by law to display a specific sign at the entrance or sign-in sheet. The sign tells you exactly who the open-house agent represents — the seller — and reminds you of your right to be represented by your own buyer's agent.
From NJ DOBI Bulletin 24-11 (full required signage text):
"ATTENTION PROSPECTIVE PURCHASERS - PLEASE READ THIS SIGN CAREFULLY. This is to advise you that the agent who is conducting this Open House REPRESENTS THE SELLER AND IS REQUIRED BY LAW TO PROMOTE THE INTERESTS OF THE SELLER. ANY INFORMATION YOU GIVE THIS AGENT IS NOT CONSIDERED CONFIDENTIAL under New Jersey law and could be disclosed to the Seller of this property. You, as the Buyer, are entitled to have someone represent you as a Buyer's Agent if you are interested in this property. The duties of a Buyer's Agent include helping you evaluate the property, prepare an offer on the property and negotiate in your best interests. If you, as the Buyer, are already exclusively represented by a Buyer's Agent, you are required to disclose this representation on the sign-in sheet. If you, as the Buyer, are not already exclusively represented by a Buyer's Agent, please be advised that the Open House agent is not precluded from being a disclosed dual agent or designated agent and can enter into any relationship with you as explained in the Consumer Information Statement."
Source: NJ DOBI Bulletin 24-11
What is a Seller Concession
A seller concession is when the seller agrees to cover certain costs typically paid by the buyer. Concessions are different from offers of compensation to a buyer's agent and follow separate rules — set primarily by the buyer's lender, not by state real estate law.
"A concession is when a seller pays for certain costs associated with purchasing a home for the buyer. Concessions could make your property more attractive to buyers or lead to a better or faster offer."
— NAR Consumer Guide: Seller Concessions
What's the difference between a concession and an offer of compensation?
"Concessions can cover a variety of costs or fees for a buyer associated with purchasing a home, whereas an offer of compensation is specifically when the seller or their agent agrees to compensate a buyer's agent for bringing a buyer who successfully closes the transaction."
— NAR Consumer Guide: Seller Concessions
Is there a limit?
"The limit on the total value of concessions you can offer depends on the terms set by the buyer's lender and state law. However, any payment you offer toward the buyer's broker's fee is excluded from limits set by the buyer's lender and must be made off-MLS."
— NAR Consumer Guide: Seller Concessions
For Fannie Mae conventional loans, lender-side limits ("interested party contributions") depend on the buyer's loan-to-value ratio (LTV — the loan amount as a percentage of the home's value) and the type of property:
"For a principal residence or second home, up to 3% if the LTV is over 90%, up to 6% if the LTV is between 75.01% and 90%, and up to 9% if the LTV is 75% or less. For an investment property, up to 2% regardless of the LTV ratio."
— Fannie Mae Selling Guide B3-4.1-02, Interested Party Contributions (IPCs)
FHA, VA, and USDA loan programs set their own concession limits. The buyer's lender confirms what's permitted for any specific offer.
This page summarizes regulatory requirements with citations to primary sources. It is general education, not legal advice. Consult a real estate attorney for guidance specific to your purchase.
Select a state above to view local rules.
Frequently asked.
Common questions buyers ask about the new rules in Pennsylvania.
Do I have to sign a Buyer Agency Contract before I can tour a home in Pennsylvania?
Under the National Association of REALTORS® MLS policy that took effect in August 2024, an MLS participant must enter into a written agreement with a buyer before touring a home. The form of that agreement in Pennsylvania is typically the Buyer Agency Contract.
"Unless inconsistent with state or federal law or regulation, all MLS Participants working with a buyer must enter into a written agreement with the buyer prior to touring a home."
— NAR Policy Statement 8.13
Source: NAR Summary of 2024 MLS Changes
Can the terms of the Buyer Agency Contract be negotiated?
Yes. Pennsylvania law specifically requires the contract to disclose that the broker's commission and the duration of the agreement were determined through negotiation between the broker and the consumer.
"Notification that the broker's commission and the duration of the agreement have been determined as a result of negotiations between the broker and the consumer."
— 49 Pa. Code § 35.331(a)(3)
Source: 49 Pa. Code § 35.331
If the seller pays my buyer's agent, is my agent really representing me?
Yes. Pennsylvania law explicitly requires the Buyer Agency Contract to include a disclosure confirming that the broker represents the buyer's interests, regardless of who pays the broker.
"[A] disclosure that the broker, even if compensated by the listing broker or seller/landlord will represent the interests of the buyer/tenant..."
— 49 Pa. Code § 35.331(a)(8)
Source: 49 Pa. Code § 35.331
Can I cancel my Buyer Agency Contract if I change my mind?
Pennsylvania law does not give either side an automatic right to terminate. The contract is exclusive — meaning you agree to be represented by that broker for the term — and termination terms must be negotiated into the contract itself. Read those terms before you sign.
"By signing this contract, the buyer or tenant agrees to be represented by the broker and no other. Neither side has an automatic right to terminate and walk away unless both sides negotiate that term into the contract."
— Pennsylvania Association of REALTORS®, on the Buyer Agency Contract (Form BAC)
Do I have to sign anything to attend an open house in Pennsylvania?
No. NAR's written agreement requirement is for "touring a home" with an MLS participant — a private, agent-arranged showing. Open houses, where any member of the public can walk in during posted hours, are not the same as an agent-arranged tour. The Pennsylvania Consumer Notice still applies if you have substantive contact with the listing agent.
Common questions buyers ask about the new rules in New Jersey.
Do I have to sign a Brokerage Services Agreement before I can tour a home in New Jersey?
Yes. Under the New Jersey Real Estate Consumer Protection Enhancement Act (CPEA), brokerage firms must enter into a written Brokerage Services Agreement with a buyer in residential real estate transactions before, or as soon as reasonably practical after, providing brokerage services. NAR's MLS policy also requires a written agreement before touring.
"The Act requires brokerage firms to obtain a BSA, signed by appropriate parties, 'before, or as soon as reasonably practical after, the firm commences rendering real estate brokerage services on behalf of' such parties."
— NJ DOBI Bulletin 24-11
Source: NJ DOBI Bulletin 24-11
What's the difference between the Consumer Information Statement (CIS) and the Brokerage Services Agreement (BSA)?
The CIS is an informational document that summarizes the various business relationships and accompanying legal duties to help ensure that buyers and sellers make informed decisions regarding business relationships with brokerage firms. The BSA is the actual contract that establishes your relationship, services, term, and compensation. Under the CPEA, the CIS must be included as part of the BSA.
"The CIS is an informational document that summarizes the various business relationships and accompanying legal duties to help ensure that buyers and sellers make informed decisions regarding business relationships with brokerage firms."
— NJ DOBI Bulletin 24-11
Source: NJ DOBI Bulletin 24-11
Can the seller refuse to pay my buyer's agent's compensation?
Yes. Compensation is fully negotiable in New Jersey, and a seller may decline to offer compensation to a buyer's broker. Under the CPEA, the BSA must address how to proceed if the seller offers no compensation, or less compensation than the buyer agreed is due to the buyer's agent.
"If the principal is a buyer, the BSA must specifically address how to proceed in the event that there is no offer, or a limited offer by any other party to pay compensation to the brokerage firm."
— NJ DOBI Bulletin 24-11
Source: NJ DOBI Bulletin 24-11
What's designated agency, and do I have to consent to it?
Designated agency is a new agency relationship type created by the CPEA. In a designated agency arrangement, one brokerage firm represents both buyer and seller in the same transaction, but assigns different individual licensees to represent each side. Both parties must give written informed consent for designated agency to apply — you do not have to consent if you don't want to.
"In order for a designated agency relationship to take effect, the brokerage firm must obtain the informed written consent of both parties to the transaction."
— NJ DOBI Bulletin 24-11
Source: NJ DOBI Bulletin 24-11
Do I have to sign a BSA at an open house in New Jersey?
No. NJ DOBI's guidance is explicit: a brokerage firm is not required to obtain a signed acknowledgment of the CIS as a precondition to viewing a property at an open house. The BSA itself isn't required just to attend an open house.
"The Act does not require brokerage firms to obtain a signed acknowledgment of receipt of the CIS from an unrepresented buyer as a precondition to view a property (i.e. at an open house)."
— NJ DOBI Bulletin 24-11
Source: NJ DOBI Bulletin 24-11
Can my Brokerage Services Agreement be cancelled or modified?
The BSA must specify its term, and the CPEA requires the agreement to address whether the relationship is exclusive or non-exclusive. Cancellation and modification terms are negotiated and written into the agreement itself. Read those terms before you sign.
"If the brokerage firm has an agency relationship with the principal, the agreement must specify whether the agency is exclusive or non-exclusive."
— NJ DOBI Bulletin 24-11
Source: NJ DOBI Bulletin 24-11
OFFICIAL SOURCES
Read the actual rules.
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