Did you know all realtors work on behalf of the seller of a home and not the buyer?
By law, all realtors—even the one showing the home, listening to your housing dreams and your financial details—work in the best interest of the seller. That is, unless a savvy home buyer signs a Buyer Representation Agreement with a realtor who will work exclusively on their behalf during a home purchase. Without it, under the law of the agency, realtors must pass on any information that may influence the home-buying negotiations to the sellers of the home that their customers are bidding on; even how much they would pay for the home or their motivation.
Canadians now have two choices: customer relationship or client relationship.
A customer service agreement is a disclosure form that states that the realtor is NOT working for you as a buyer, but is providing customer service (fair and honest treatment, factual information about the property that is not visibly evident and to answer any questions you ask about the condition of the property) to you.
With customer status you are virtually “unrepresented” and in a “buyer beware” situation.
On the other hand, Buyer Representation Agreements state that the realtor is working for you and that you are bound to that realtor for the term of the agreement with a holdover period. In this case, your realtor is bound to you with fiduciary duties, (loyalty, obedience, full disclosure, duty to use skill, care and diligence, duty to account for all monies) and protects your information. A clincher for me is that it also allows the realtor to share his/her expert opinions, giving you full advantage of their knowledge and expertise. Furthermore, it then becomes their duty to answer questions that you may not even know to ask and their accountability is much higher.
There is nothing in the Buyer Representation Agreement that states that you have to buy anything. It only states that if you do that you will use this particular brokerage and that they will be compensated for the service provided.
The best part is that there is no special fee to the client. Instead the realtor gets paid via commission that comes from the seller’s listing agent, just the way it has always been. Yes, that’s right, all that hard work for FREE!
How do you become a client? It’s easy—homebuyers sign an exclusive Buyer’s Representation Agreement with a realtor. Usually, the buyer agrees to work with the realtor for a specified period of time and the realtor agrees to represent the buyer’s interests to the fullest. That’s it!
Why not protect your interests? Hire the person with the most knowledge to work on your behalf and to do it at no extra cost.