If you have decided that you have the means and the desire to own a home and would like to proceed with making it happen, now is the time to start investigating the Real Estate market with a qualified and knowledgeable REALTOR®. Specifically, you will want to know where you should be in the buying process before contacting a Sales Representative, who the REALTOR® is working for, and what to expect from a REALTOR®.
Before contacting a REALTOR®, meaning a licensed real estate professional who is a member of the federal, provincial, and local real estate associations, you should have already:
• barring unforeseen circumstances, made a commitment to buy a home;
• in consultation with your preferred lending institution, determined the amount you can afford to pay for a home … also known as being 'pre-approved'; and
• written down the features in a home that you 'must have' as well as those features that would be 'nice to have'.
Now it is time to begin shopping for a REALTOR®. Quite often, new buyers will seek the services of someone who has been referred to them by a friend or associate. However you choose a Sales Representative or Broker, you should feel confident that you can trust the person and be comfortable working with him or her.
Once you have selected a REALTOR® with whom you are going to work, you need to establish how that person will represent you. This may seem like an unusual requirement but the REALTOR® may actually be working for the Vendor, also called the 'homeowner', and it is important to understand 'agency relationships' or the responsibilities of each agent in a real estate transaction. Because relationships between Buyers, Sellers and REALTORS® can often be more complex than would appear on the surface, you should receive a copy of the Ontario Real Estate Association (OREA) Agency Brochure when you first meet your REALTOR®.
When reviewing the brochure keep in mind that the information is presented from the Brokerage's perspective, as opposed to individual Sales Representatives. In other words, if a Royal LePage ProAlliance Sales Representative were to bring an offer on a home that is listed with a different Royal LePage ProAlliance Sales Representative, the Brokerage is still working for both parties. This is a common occurrence in this area given the sheer size and success of some of the local companies.
If you choose to sign a 'Buyers Representation Agreement', the Brokerage of the Salesperson you employ is working for you. In the event you wish to make an offer on one of the listings held by the REALTOR® with whom you are working, or a listing held by the same Brokerage, both you and the seller will be briefed on 'Multiple Representation'. This will also be explained in more detail in the OREA brochure.
You will also be briefed on the specific agency relationships in play prior to an offer presentation through a separate document known as the 'Confirmation of Co-Operation and Representation'. In years past, both Sales Reps worked for the homeowner because they paid the commission.
This is no longer the case. While the homeowner pays the commission, under a Buyer's Agency Agreement, the Buyer's Agent is legally bound to represent the Buyer's best interest or to do what is best for his/her Buyer client.
In conclusion, the agency relationships between Buyers, Sellers, and REALTORS® can initially seem confusing. It is important to understand how you are best protected from the minute you enter an agency relationship. In other words, who is looking after your best interests?
David Weir BA, CD is a Broker with Royal LePage ProAlliance Realty, Brokerage in Trenton. His sales in the Quinte area have ranked him in the Top 1% of all Royal LePage REALTORS® in Canada since 2005.