Selling or buying a home is the largest transaction most of us ever become involved in. Yet people sometimes take less time over it than they do when buying a new car. That’s because it’s unfamiliar territory to many of us. We don’t all understand the process. We don’t know what questions to ask. We may take things for granted, rely on others when we shouldn’t, and sometimes we later wish we had known more about the process involved.
Working with a Real Estate Licensee
SELLING A HOME IS A COMPLEX PROCESS: TEAM SM WILL HELP YOU DETERMINE :
What is the best possible price?
Where do you find a buyer?
What facts must you disclose?
What paperwork is required?
Will the contract be legal and binding?
How is ownership transferred?
What about the existing mortgage?
Can the buyer qualify for a mortgage?
Who ensures you will get your money?
To answer these questions and assist with many other situations which may arise, you might wish to employ a licensed real estate professional to act as your agent. Hire TEAM SM FOR BEST RESULTS
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 seller, and any relationship he or she may have with a buyer. 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.
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 a 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 the contract is one of the limited dual agency. In brokerage agency, the 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 fulfil 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.
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 the costs involved in a transaction.
How Do You Choose a Licensee?
There are many ways to find a real estate licensee with a reputation for excellence. Word-of-mouth is one good source. Ask friends, neighbours and fellow employees who have recently bought or sold a home to recommend their choice of a licensee. You might meet a licensee you like at an open house who is showing one of the properties for sale in your neighbourhood. Or, you could contact several local real estate brokerages to inquire if they have a licensee who specializes in selling homes similar to yours. The internet is also a good way to locate licensees who specialize in properties and regions that may be of interest to you. Make appointments with licensees to discuss their range of services, background, knowledge, and fees or commission rates. After these interviews, choose the licensee who seems best able to render the services and produce the results you are seeking …….
What Will a TEAM SM AS Licensee Charge?
In general, licensees work on a commission basis and receive payment only after the successful completion of a sale. As the seller, you will be asked to agree to pay this commission as a fee for the licensee’s services. The commission is usually stated as a percentage of the total sale price or as a fixed dollar amount. Note that GST is applicable to commissions. The commission rate is neither fixed by law nor by any real estate board; it is negotiable between you and the licensee you engage to help you. The seller’s brokerage traditionally shares this commission/fee with the brokerage working for the buyer.
Responsibilities of the Seller: ASK TEAM SM FOR ADVICE OR HELP WE ARE ONE CALL AWAY 24/7 …..
When you employ a licensee, you are responsible for providing him or her with accurate information concerning your home; for example, its age, the current financing arrangements, the condition of the roof and hot water heater, the property taxes, etc. The licensee will also need your assistance and/or authorization to gather information about such things as the ownership details, the outstanding balance owing on the mortgage, the home’s assessed value, and the current zoning of the property.
For strata-titled properties, licensees will want your assistance to gather and provide information, including minutes of all strata meetings in the last two years, current financial statements, registered bylaws, current rules, building inspection or engineer’s reports, Information Certificate (Form B prescribed under the Strata Property Act), as well as information pertaining to the nature of how parking stalls and storage lockers are designated, whether a special assessment is being proposed, and any other documentation relevant to the strata property.
CALL SYED OR MANISHA FREE HOME EVALUATION AT YOUR DOORSTEP
SYED & MANISHA 604-700-3475
Thinking of buying your own place? It’s normal to feel a little overwhelmed.
After all, it’s the biggest purchase you can make. In an effort to remove some stress from the equation, here are a few tips from the experts.
What to do when you’re a first-time home-buyer: CALL SYED & MANISHA 604-700-3475
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