PSI New Jersey Real Estate State Practice Exam

What is required for a legally binding exclusive buyer representation agreement?

1. A full disclosure of all property defects

2. The signature of all parties involved

3. A clear legal description of the property

4. A deposit payment from the buyer

The correct answer is: A clear legal description of the property

A legally binding exclusive buyer representation agreement necessitates the clear identification of the property involved, which is why a clear legal description of the property is crucial. This legal description provides a precise and unambiguous way to identify the property that the buyer is interested in, ensuring that all parties understand exactly what is being represented in the agreement. This clarity is critical to avoid any confusion or disputes in the future regarding the property in question. While other aspects, such as the signatures of all parties, are important for validating agreements in general, they are not exclusive to the buyer representation context. The same applies to full disclosure of defects and deposit payments, which may be relevant in various stages of a real estate transaction but do not distinctly pertain to the formation of this specific type of binding agreement. Hence, without a clear legal description, the agreement would lack specificity and could be rendered unenforceable.