Buying or selling a home in today’s market requires a lot of work and a lot of knowledge about sales and real estate. It’s one of the largest purchases or biggest business transactions many of us will ever make. It doesn’t pay to depend on blind luck.
Whether you are a buyer or a seller, there are distinct advantages to using a REALTOR®. A REALTOR®, is a licensed real estate professional who is a member of a local real estate board, as well as the Canadian Real Estate Association (CREA) and, in BC, the British Columbia Real Estate Association (BCREA).
This individual has the experience and qualifications needed to successfully conduct a purchase or sale. In BC, you can expect strict adherence to provincial law and a code of ethics. This ensures you receive the highest level of service, honesty and integrity.
If you are a buyer
In today’s busy, complex world, purchasing a home can be a lot more time-consuming and complicated than other business transactions. First-time buyers, especially, quickly discover that theres a lot more to buying real estate, than deciding what vacation to take or what car or suit to buy.
Using a REALTOR® from the start can provide you with the sound , effective advice and professional services you need to get the best deal possible. Once a REALTOR® has a clear understanding of what you want and what you can afford, their knowledge can save you a lot of time looking at homes that aren’t right for you.
A REALTOR® can pre-screen properties so that you should only have to visit a handful of homes to make an informed and wise selection.
Much of the early search with a REALTOR® can be done through the Multiple Listing Service (MLS) and preliminary discussions. As you visit and react to each home you see, the REALTOR® will have an increasingly better idea of what you want and don’t want.
A REALTOR® will also be able to advise you on the various options available for financing a home and tell you when to bring in other experts such as a lender, home inspector, lawyer and insurance agent.
If you are a seller
Sometimes a seller will be tempted to sell their home on their own, believing it will save them the cost of the real estate commission. But, selling a home is a very complex procedures, involving large sums of money, stringent legal requirements and the real potential for very costly mistakes.
Just as most of us lack the knowledge to do a major repair on the family car, most sellers lack the depth of knowledge, experience and amount of time needed to sell a home on our own. A REALTOR® not only has the qualifications and expertise, but is committed to spending the time it takes to get the best deal possible.
Selecting a REALTOR®
Before you make a REALTOR® part of your team, it pays to shop around and sharpen up those interviewing skills. The REALTOR® you select should be someone who knows the neighborhood you live in or want to live in; who can provide you with sound, effective advice; and who has broad and current knowledge of today’s real estate market.
Begin by identifying several candidates and interviewing at least two or three before making a final decision. If you were pleased with the services provided by the REALTOR® who helped you make a previous sale or purchase, he or she may be your best choice.
Jot down the names and telephone numbers printed on “For Sale” signs you notice around the neighbourhood, in local real estate ads or publications. Also, ask friends, family and business associates to recommend some names.
Interviewing REALTORS®
The REALTOR® you select should be someone who shows genuine interest, knows the current real estate market and has a good track record in the sale and purchase of properties you’re interested in. This individual should make you feel comfortable and that they have your best interest in mind.
Be sure to get a resume and references and to ask questions such as:
- How long have you and the firm been in business? How many homes have you sold in the last six months? How close were the sale prices to the asking prices? What price range of homes do you generally handle?
- Do you provide multiple listing of your property through the Multiple Listing Service (MLS)? (This service provides access to a much broader base of potential buyers.)
- If selling: How will you market my property? Will the marketing plan include an open house for other REALTORS® and regular open houses for prospective buyers, advertising and flyers? How did you establish the suggested selling price for this home? Was my home compared to those sold recently in the neighborhood and to those currently on sale? What tips and hints can you offer to make my home show better.
- What will using your service cost me?
If the REALTOR® looks enthusiastic about selling your home or helping you buy one, and appears confident in their ability, consider hiring them. But first check their references or talk to people who have recently sold or purchased property through them. Most people who have had a positive experience will be quick to express it.
Real Estate Licensees: Licensing Requirement
It is important to understand that in British Columbia, the person you hire to assist you to purchase your home must be licensed under the provincial Real Estate Services Act.
Responsibilities of Seller’s and Buyer’s Licensees
In every real estate transaction there is a seller and a buyer. A real estate licensee may be employed as an agent for the seller, as an agent for the buyer, or both. Early in the first meeting with a real estate licensee, the licensee should provide you with full disclosure about the nature of his or her relationship with you, as a buyer, and any relationship he or she may have with the seller. The licensee is required by law to provide this information and explain its implications to you.
Your Relationship with a Real Estate Licensee
When providing real estate services, the nature of the relationship that is created between the buyer or seller and the real estate brokerage, including its related licensees, is important. The relationship may be either a sole agency, limited dual agency, or no agency relationship.
Sole agency
Where a licensee acts only for the buyer or the seller, a sole agency relationship is generally created. The buyer or seller who engages a licensee to act as a sole agent is known as the “client”. There are different types of sole agency relationships. The historical model of real estate agency, referred to in this material as ‘brokerage agency’, is one where the brokerage is the agent of the client, and all licensees engaged by that brokerage automatically assume the same agency obligations as the brokerage in relation to that client. When the brokerage only represents one client in a particular transaction this is referred to as ‘sole’ agency. Another type of sole agency, ‘designated agency’, occurs when the brokerage and the client agree that the brokerage will designate one or more licensees engaged by that brokerage to provide real estate services as sole agent to or on behalf of the client. In designated agency, the brokerage has contractual duties to the client but it is the designated agents who act as sole agent on behalf of the client.
As an agent, a licensee has certain duties to their clients. In addition to the general obligation that all licensees have to act honestly and with reasonable care and skill in performing all assigned duties, an agent has:
- a duty of undivided loyalty to the client;
- a duty to keep the confidences of the client;
- a duty to obey all lawful instructions of the client; and
- a duty to account for all money and property of the principal placed in the brokerage’s hands while acting for the client.
In designated agency, the brokerage and the client agree that these duties – other than the duty shared with the designated agents to keep the confidences of the client, and the holding of money on behalf of the client – are the responsibility of the designated agents.
Limited Dual Agency
When a brokerage acts for both the buyer and the seller, with their agreement, the nature of the relationship created by contract is one of limited dual agency. In brokerage agency, limited dual agency can occur when the same licensee engaged by the brokerage represents the buyer and seller, or where different licensees engaged by the same brokerage represent the buyer and the seller. Before a brokerage may represent both the buyer and the seller, the buyer and seller must consent to such a relationship. Before providing their consent, the buyer and seller should be fully informed regarding the limits that will be placed on the agent’s (brokerage’s) duties and obligations to the buyer and seller.
Designated agency allows two clients who have engaged the same brokerage to have independent representation by their respective designated agents, eliminating the occurrence of ‘in-house’ limited dual agency where the interests of those clients are in conflict, e.g. they wish to negotiate in relation to the same property.
Where a limited dual agency relationship has been agreed to, it is not possible for the agent (brokerage or its designated agent) to fulfill all of its duties to both parties. As a result, the duties are limited by contract and the sole agent, whether the brokerage or its designated agents as the case may be, become limited dual agents, with their duties being limited as follows:
- the brokerage and/or its designated agent must deal with the buyer and seller impartially;
- the duty of full disclosure is limited so that the brokerage or its designated agent are not required to disclose what the buyer is willing to pay for the property, what the seller is willing to sell the property for, or the motivation of either party; and
- the brokerage or its designated agent must not disclose personal information about the parties, unless authorized to do so in writing.
No Agency
A brokerage or its designated agent may also agree with a buyer or seller that they will not act as an agent on their behalf in a transaction. In other words, there will be no agency representation. In such a case, the buyer or the seller will be the “customer”, not the client of the brokerage or its designated agent. This may occur when a licensee already has an agency relationship with a seller, for example, and a buyer becomes interested in the seller’s property. In this situation, the licensee is not permitted to recommend or suggest a price, negotiate on the customer’s behalf, inform the customer of their client’s bottom line price point or disclose any confidential information about their client unless otherwise authorized by the client. However, the licensee can provide a customer with other services, such as:
- explaining real estate terms, practices and forms;
- assist in screening or viewing properties;
- prepare and present all offers and counter offers at the customer’s direction;
- inform you of lenders and their policies; and
- identify and estimate costs involved in a transaction.
Services a Buyer Can Expect From a Real Estate Licensee
You can expect licensees to provide you with such services as:
- Helping you to clarify the type of home you need and can afford
- Providing information about available properties and sources of financing
- Arranging appointments to view available properties
- Providing accurate answers to any questions you may have about a specific home you are considering
- Explaining the forms used in a real estate transaction and assisting you in making a written offer to purchase
- Presenting your written offer to the seller
- Familiarizing you with the steps you must take to complete the purchase after the seller accepts your offer.
Keep in mind that if the licensee with whom you are working is the seller’s agent, any information you give to him or her must be passed on to the seller. It is in your best interest to discuss with that licensee only what you would discuss with the seller in person.
