What you need to know about the settlement agreement between CREA and the Competition Bureau.
It was ratified by the members of CREA on the weekend. Some of the headlines indicate that this has changed the face of real estate. Some of the media claims certainly seem like that is indeed the case. The reality is here in Red Deer Alberta the changes don't amount to a huge difference.
The largest change and most publicized has been those listings that pertain to a "mere posting".
In Red Deer, our association has allowed "mere postings" for some time. The only rule we've had in place around "mere postings" was that the cooperating commission for a selling brokerage must be greater than $0. For several years now this rule has been in place. We've also had companies list properties and offer out $1 in commission for the agent that brings in a buyer. Should this practice become more common place a buyer could expect to sign contracts that ensure remuneration is paid to their REALTOR® for services provided.
When you work with a REALTOR® today in Alberta you will be asked at some point to sign an agency acknowledgement form. As a consumer you have the choice of entering into a single agency relationship, a choice that may permit the transaction to become a "dual agency" relationship later the name was changed "transaction brokerage", or enter into a customer status only relationship. These measures are part of the real estate act and regulated by RECA.
Single (Sole) Agency:
- Sole agency occurs when one brokerage (including its broker, associate brokers and associates) represents the seller as the seller’s Agent, and another brokerage (including its broker, associate brokers and associates) represents the buyer as the buyer’s Agent
- This relationship applies whether one REALTOR® represents both parties, or two different REALTORS® in the same brokerage each represent a client in the transaction. Transaction brokerage is only permitted with the fully informed and voluntary consent of both the buyer and the seller. The brokerage will obtain this consent through the use of a Common Law Transaction Brokerage Agreement.
Customer Status (Non-Agency):
- If you do not want be in an agency relationship but want to work with a brokerage, you will be asked to choose customer status. When you have customer status, the brokerage is not your Agent and does not owe agency duties to you. Duties are limited to honesty, reasonable care and skill and not negligently or knowingly providing you with false or misleading information. The brokerage will provide you with forms to help you complete a transaction, perform services needed to help you complete a transaction, but will not provide you with advice or advocate on your behalf.
In Alberta RECA is our provincial regulator for all trades in real estate. You can find more information Agency at the Reca Site.
- "You have to post my listing as a mere posting or flat fee if that is what I want".
No I don't. Century 21 Advantage is a full service brokerage not a mere posting brokerage. If that is the service level you are looking for we're not for you. The changes that apply are directed to Real Estate Associations and the members business models. No company or agent is mandated to deliver services in a manner that they don't agree with. Hiring a real estate company or agent is a mutual decision between the agent and the seller. If you don't like me or my fees you don't have to do business with me and vice versa.
- "You all charge the same fee"
No we don't. Within our office you will certainly find fees that are the same but you will also find that we charge different fees based on the type of real estate, location, frequency of transactions, market value and more.
Our agents and I are more than happy to discuss your real estate needs and the questions you may have. We work on a contingent basis not a retainer or up front fee. That is to say we work to sell your home and do not get paid until your home sells. Some times that occurs quickly, while others may take several weeks or months.
You can read about the CREA settlement agreement in a PDF format courtesy of the Globe and Mail here.
You may certainly experience more changes in other markets and see an increase in discount service business models but I would anticipate that we will follow the USA and see business continue with full service business models such as ours to continue.
Your Friend in Real Estate,