First Time Buyer Tips Vancouver Episode 6: Working with a Realtor FINTRAC and the Remuneration Disclosure
This post is part of a series discussing Tips for First Home Buyers in Vancouver. Remember, there is no such thing as a stupid question! I strongly encourage questions and comments!
You’ve found your Dream Home, What next?
You finally found a property you want to buy and you have an idea of what its worth as discussed in Vancouver First Time Home Buyer Tips Episode 5. You and your Realtor will need to draft up an offer in writing to signal to the Seller that you are serious about buying the property.
STOP! Time to for the Realtor Disclose EVERYTHING to the Buyer IN WRITING!
Before a Realtor can prepare an offer or Contract of Purchase and Sale as its officially referred to in British Columbia, several very important documents need to filled out and signed by the Buyer. These documents are a constant source of confusion and questions from First Time Home Buyers and its a major reason I created the First Time Home Buyer Guide for Vancouver.
What needs to be filled out and signed and what it means!
- Working with a Realtor – A home Buyer and their Realtor or Buyers Agent enter into whats called the Agency Agreement when they start to work together. This document lays out the obligations and duties the Realtor owes a Client and the Rights of the Client. The salient points of the Agency Relationship as laid out in the Working with a Realtor Brochure (the link to the left takes you to an example of the document and a video explanation) are as follows; 1) Undivided loyalty. The Brokerage must protect the principal’s negotiating position at all times, and disclose all known facts which may affect or influence the principal’s decision. 2) To obey all lawful instructions of the principal. 3) An obligation to keep the confidences of the principal. 4) To exercise reasonable care and skill in performing all assigned duties. 5) To account for all money and property placed in an Brokerage’s hands while acting for the principal.
- What It Means - The Realtor works for the Client (First Time Home Buyer) and only the Client, no matter who is paying the Realtor and has to tell the Client EVERYTHING! 2) The Client/Buyer is the BOSS! No ifs, ands, or buts! 3) The Buyers Real Estate Agent CANNOT talk about the clients affairs with ANYONE, unless given permission by the Client, 4) The Realtor has to do their job right or face serious consequences 5) Everything given to the Realtor is the Realtors personal responsibitiy ie deposit cheques, keys, anything.
- FINTRAC - Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) gathers, analyzes, assesses, and discloses financial intelligence and requires all Realtors in Canada to ascertain the identity of the their clients and submit it to FINTRAC. (the link to the left takes you to an example of the document and a video explanation)
- What It Means - Big Brother/the Government of Canada wants to know if buyers of real estate in Canada are funding terrorism or laundering money and wants all of the personal information of these Buyers and will throw these Buyers and their Realtors in jail for not giving this personal information.
- Disclosure of Remuneration - Realtors have a duty to disclose to their Clients in writing how the Real Estate Agent is getting paid, by whom, and how much. All Buyers working with a Realtor must initial or sign a Disclosure of Remuneration.
- What it Means – For First Home Buyers, the Disclosure of Remuneration is very often when they come to understand how their Buyers Agent gets paid. This is how it works: The Seller offers to pay their Sellers Agent (Listing Agent) a commission to sell their property. The Sellers Agent then offers about half of this commission to Buyers Agents to bring their Buyers to bring accepted offers that Complete. The Buyers Agent has to get it in writing that the Buyer is aware of how much the buyers agent is getting paid and by whom. PLEASE NOTE – Buyers do not pay the Buyers Agent! For a more detailed explanation of check out my Disclosure of Remuneration Video.
Once all these documents are signed and filled out its time to prepare the offer or Contract of Purchase and Sale, so stay tuned for Episode 7 of the First Time Home Buyer Tips Vancouver: The Contract of Purchase and Sale Overview!
I Strongly Encourage Questions and Comments!