Immediately upon diving into the
issue of “Agency” you will quickly learn that it is extremely important for you
to have your own professional representation from someone thoroughly familiar with the
market and the buying process in its totality.
The purchase of a condo is a very personal and sometimes an intimidating thing. The one
thing that you want removed from the process is emotion. Negotiations can frequently drag
on with one party insisting on one thing and another fighting for another. A professional
negotiator will keep the dialogue on a positive channel throughout the process. Whether
you are buying new or resale it is absolutely imperative that you retain the services of a
professional Buyer’s Agent to insure that you come out at the other end with your
best deal in terms of price, conditions, appointments, etc.
Basically there are three types of “Agency” and the lines are often blurred
between them. To understand agency it is wise to look at the courts of law where one party
sues another party. They certainly don’t use the same lawyer (“agent”) as
there is tons of information that you would not want the other side privy to.
In real estate there is a SELLER’S AGENT who is an individual possessing a valid
Ontario real estate license and who works on behalf of a seller to sell a property. The
Seller signs a Listing with the Agent agreeing to pay the Agent an agreed upon percentage
of the sales price. The Agent then advertises the unit (I’ll use our industry
specific term as opposed to property for convenience sake only acknowledging that the same
basic procedure applies to homes, cottages, etc.) on the MLS (Multiple Listing Service)
and in newspaper’s, flyers, postcards and other creative ways.
The majority of the time the Buyer is located through another of the 19,000 Realtors
forming the Toronto Board. These “co-operating Realtors” may work in the form of
a “Co-operating Realtor” (working for the Seller’s Agent) or as a
“Buyer’s Agent” (working for the Purchaser). It is absolutely imperative
that you as a Buyer know where your Agent stands and actually, the Toronto Real Estate
Board (“TREB”) publishes a brochure that all Realtors must have you acknowledge
having read and understood by signing it prior to the Agent transacting any business on
your behalf.
When you respond to a newspaper ad, for instance, and the Realtor outlines his/her Listing
to you, you have got to understand that they hold a legal obligation to their client
(“Seller”) to represent ONLY their interests. Under law they cannot tell you any
of the negatives about the property. They can not hide them from you (fortunately in
Ontario and throughout Canada consumers are very well protected under the Canadian Real
Estate Association (“CREA”) and various other regulatory and industry bodies. |
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A BUYER’S AGENT
is an individual who works ONLY for the Buyer. He/she owes their client
(“Buyer”) the exact same obligations (confidentiality, full disclosure, etc.) as
the Seller’s Agent owes to the Seller. This professional designation is still quite
new in Canada thus a good amount of confusion remains around just how is and who is not a
Buyer’s Agent.
It is quite easy to understand who is what once given a factual understanding of how
things work. Much like in the adversarial arena of the courts referred to above, your
agent represents your interests working to get you the best unit at the best price and on
the best terms and conditions. A great deal of strategy and/or tactics are employed in the
real estate game. To protect the consumer the real estate industry and government have set
up layers of protection to insure that, given adequate representation both parties are
playing on a level playing field (emphasis on given adequate representation). If the
Seller has a professional sales agent representing them you can expect to face well
perfected selling skills and tactics that seem distant to non-sales people.
A Buyer’s Agent brings that strategic planning and tactical negotiation experience
onto your team. It is important to know that the sales representative with whom you
ultimately end up working with is not the party with whom you are contracting (whether
listing a property or entering into a Buyer’s Agency Agreement). The Agent with whom
you are contracting is the Broker, the employer of the sales representative.
Dual Agency occurs when the same Broker lists a property and represents the buyer. I
mentioned (above) that the sales representative that you end up working with will not be
the party with whom you are actually contracting with. Imagine now that one sales
representative was to contract with both the Seller and the Buyer. Could confidentiality
and full disclosure to both parties insure either of them getting their best possible
outcome of the transaction? The Toronto Real Estate Board advises its members to avoid
Dual Agency transactions. One cannot serve two masters. A true Buyer’s Agent is
someone who ONLY represents Buyers!
Before selecting your Agent to assist you in purchasing your condominium ask one simple
question: “do you handle condo listings”? Many Realtor’s honestly believe
that they can represent both buyer and seller. Many argue that they simply cannot give the
“client” (you) the absolute best service when compromised to disclose
information by both parties to the other party. I tend to agree. This is why at
simplycondos.com we do not carry Listings freeing us up to negotiate the best price, terms
and conditions without influence toward any specific property.
Realtor’s simply cannot do both and deliver the best they have to offer to their
clients. If you are buying a condo and using a firm that lists condos you will inevitably
fall into dual agency. I personally do not list properties. |
