Sustainable housing and real estate in Kitchener-Waterloo Region


What duties does a Realtor owe you?
January 13, 2009, 2:58 am
Filed under: Buying, Rebecca Sargent, Selling, Uncategorized | Tags:

People are often concerned about what Realtors are actually supposed to do for them.

In Canada, Realtors are licensed and regulated by the Real Estate Council of Ontario (RECO) and governed under the Real Estate and Business Brokers Act (REBBA), which carries certain liabilities and expectations of service. These structures are in place to protect both you (the buyer or seller) and the Realtor.

Let’s say you walk into an open house, and you ask the Realtor at the property some questions? What can they tell, what can’t they tell you, and how should they act? Do they have to tell you the truth? In this situation, regardless of whether you are in a contract or not, the Realtor owes you honesty, fairness and due care in answering questions. As  skilled and licensed professionals, Realtors are expected to provide sound real estate advice that a person can rely on. They are not allowed to willfully or negligently misrepresent information, or assert themselves as experts in an area that they are not familiar with. They may not be able to provide you with all the information they have on a transaction unless you are in an agency relationship, as a protection to their clients, but they are NOT permitted to provide you with faulty information.You should not tell the Realtor in this situation anything you do not want them to directly reveal to the other party. The Realtor’s primary obligation lies with their contracted clients.

If you decide to sign an agency contract with a Realtor, they owe you added duties, including accountability, confidentiality, competence, good faith/full disclosure, loyalty and obedience. Accounting means the agent must keep accurate records of all funds they receive and that all transactions must comply with provincial regulations. Canada’s FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) requires all Realtors to check your identification for all financial transactions. They are also required to report any suspicious activity (which includes any large cash transactions) to federal authorities by law. Confidentiality requires that the Realtor should not disclose any information relating to your transactions to anyone else without your consent. This means they can’t tell the other party that you are motivated to move, your financial situation, or any other detail about you without your consent. This does not apply to any known material facts of your property (including defects), which a Realtor is obligated to disclose under the general honesty regulation owed to all people.

Competence means that your Realtor must have sufficient knowledge and skill to carry out the transaction. Realtors are obligated to discover certain facts about the property that a reasonable Realtor should be able to ascertain, and have been given training to do this. They are instructed to refer their clients to a third party if they are unable to adequately answer a question. A licence in real estate does not mean the Realtor is licenced to do home inspections, appraisals, or answer legal questions. All homes should be inspected by a licenced inspector for your protection, and a Realtor should not advise you otherwise.

Good faith/full disclosure means that the Realtor must disclose all information they have that relates to the transaction. This means they must tell you everything they know about the property, including any profits they may gain for the transaction from referrals or other reasons. Dual agency, when a Realtor represents both the Buyer and the Seller, is a slightly different situation, as the Realtor must protect the interests of both parties. In this situation, the Realtor should explain the situation to you and get your permission in writing. The Realtor may not tell the Buyer or Seller the price the other party is willing to accept, the motivation of either party, the price the Buyer should offer, or the price the Seller should accept.

Loyalty means that the Realtor should place the interests of their clients above all else except the law. They must act in the best interest of their clients at all times. Obedience means that in a client relationship, the Realtor must follow their client’s lawful instructions whether they agree with them or not.

What is the best way to ensure you are receiving the care and treatment you deserve from a Realtor? Inform yourself of what to expect, and interview a couple of Realtors before you hire one. Ask them what services they are willing to provide you with for their services and get it in writing. Keep copies of all your communication or documents. You always have the option to fire the Realtor if they do not meet the contract. Be aware that most agency contracts have holdover periods which may obligate you to pay commission to them for certain services. If you don’t know, ask. There is no such thing as a stupid question, and your Realtor should make an effort to answer you- that is what you pay them for. 

If you feel that a Realtor has not performed their prescribed duties under their licencing, you should contact CREA or the provincial governing body. The Real Estate Council of Ontario (RECO) handles all complaints in Ontario (ccd@reco.on.ca).

A good Realtor is worth their commission, unfortunately a small handful give the rest a bad name. It is in your best interest to protect yourself by knowing what to expect in the process!

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How to choose a Realtor and how they can help you purchase a home.
January 13, 2009, 2:55 am
Filed under: Buying, Rebecca Sargent | Tags: , ,

The Realtor should first discuss with you the values and services he/she will bring to the table.

What SHOULD they be doing for you as a Buyer agent?
• Organize and schedule your home search process
• Discuss with you the benefits and drawbacks of each home in relation to your specific needs
• Provide you with ongoing updates on available homes
• Help you compare homes and make a decision
• Advise you on the terms and issues of the offer and fill out the purchase order contract
• Present your offer and negotiate on your behalf
• Coordinate and supervise the preparation of all closing documents and guide you through the closing process
• Help you resolve any closing issues
• Answer all your questions in a timely manner.

Decide on the values that are important to you, and discuss them with your Realtor. Are they willing to provide you with all the services you need? Get it in writing!

You will then need to decide whether you want to sign a contract with your Realtor. There are several types of contracts, depending on the services you will require.
The Buyer Agency Agreement is the most common. This agreement:
• Establishes the type of relationship that is involved
• Sets out the duties and responsibilities of both parties
• Details commission arrangements and buyer responsibilities if commission is not to be paid by the seller

Why should you sign an agreement?

By signing the Buyer Agency Agreement, you ensure that your Realtor is working for you in a client relationship, meaning that the Realtor must represent you exclusively in the contract. It lets the Realtor tell you all the information they know about the property, and makes sure they are obligated to work in your best interest.

The traditional agency relationship requires that all agents have a fiduciary relationship with the seller. That means that it’s their job to protect the interests of the seller. By entering into a Buyer Agency Agreement, you ensure that the Realtor will always be protecting your interests.

The agreement also protects your Realtor. It means that you acknowledge that he/she is representing you for the duration of the contract period, and that you are agreeing to work exclusively with that Realtor for the duration. This means you have the responsibility to notify the Realtor of any property that you are interested in during this time period and your Realtor will make all the arrangements to view the home. This includes homes that come directly from the builder, or open houses that you want to inspect in the neighbourhood.

Deciding whether or not to sign a Buyer Agency Agreement is up to you. You can sign the Agreement for one property, or one area, or for everything you are searching for. You should discuss the terms of service that the Realtor will offer you in return for your signing and get all the details in writing. This could include certain marketing aspects and all the rights and duties that each party will perform. This is a promise for a promise: you promise your Realtor exclusivity, and they promise you service. This means that if your Realtor does not perform the set services, you CAN fire them. But be aware that Buyer Agency contracts typically have what is called a “hold over” period (usually 30-60 days). If you purchase a property that was introduced to you by your Realtor within this period, they are entitled to commision under most contracts. 

Things you can do to protect yourself:
– ask for a short term or specific contract (for 30 days, or 24 hours, or for a specific property, area or price range);
– ask about anything on the contract you don’t understand- if the Realtor cannot explain it to you in clear terms- do not sign it.
– Get copies of anything you sign, and keep it in a file for yourself
– Know what duties to expect of your Realtor, and make sure they answer all your questions. Remember there is no such thing as a “dumb” question- so ask if you don’t understand! It is part of your Realtor’s job to answer your questions.