Hiring A Realtor
Working with a real estate professional
Buying a home may be the largest and most complex financial transaction you ever undertake. If you’re ready to buy a home, wouldn’t you prefer to work with the most qualified real estate professional you can find?
Realtor – a licensed real estate professional who is a member of a local real estate board (RAE), as well as the provincial real estate association (AREA). When you work with a Realtor you can expect strict adherence to provincial law as well as the national Realtor Code of Ethics – ensuring you’ll receive the highest level of service and integrity.
Accredited Buyer’s Representative (ABR) – is the benchmark of excellence in buyer representation. This is an elite specialized designation for Realtors. If your Realtor holds the ABR designation, you can trust that they have the extra edge when it comes to knowledge and experience.
Accredited Buyer’s Designation
The ABR designation is only awarded to licensed real estate professionals who complete specialized training that gives them the edge in understanding a buyer’s perspective and protecting and promoting their buyer-clients’ interests. Before earning the ABR designation, buyer’s representatives must also demonstrate proven experience in representing buyers. Further, they are committed to maintaining their professional edge by staying current on the latest issues and trends in buyer representation.
Not all buyer’s representatives are equal. Only a buyer’s representative who has earned the Accredited Buyer’s Representative designation has make the extra effort to raise the bar, with additional training and experience. If you work with an ABR, you can feel confident that you’ll receive the highest level of buyer-representation services. The ABR designation is awarded by the Real Estate Buyer’s Agent Council (REBAC), a wholly-owned subsidiary of the National Association of Realtors (NAR).
When you work with an ABR, you’ll be served, not sold! Your interests become their interests. They’ll make your home buying experience go as smoothly and successfully as possible.
You can expect your ABR agent to:
- Be extensively trained in a wide variety of marketing methods to uniquely locate your property from the widest range of sellers.
- Adhere to the highest level of professional ethic and business practices in delivering client level services with integrity.
- Have an advanced level of understanding on how to collaborate with a variety of cooperating agents of all skill levels in the marketplace to insure you have the best opportunity in finding and purchasing your property.
- Being committed to putting your needs above their own.
- Provide competent service.
- Understand your specific needs and wants, and locate appropriate properties.
- Assist you in determining how much you can afford (pre-qualify your mortgage).
- Preview and accompany you in viewing proeprties.
- Advise you in formulating your offer.
- Help you develop your negotiating strategy.
- Provide a list of qualified vendors (inspectors, attorneys, lenders, etc.) for services you may need.
- Keep track of every detail throughout the transaction – to closing and beyond.
Who does a Realtor work for?
There can be confusion among buyers and sellers over who a Realtors work for. To provide the highest level of service to sellers and buyers, real estate brokerages work within a legal relationship called agency. The agency relationship exists between you (the client) and the brokerage (the agent). The licensed broker and all licensed Realtors registered to that brokerage become your agent. Collectively, they are identified as the buyer’s agent when working for a buyer and as the seller’s agent when working for a seller.
When working exclusively for a buyer, the buyer’s agent will use their best efforts to locate a property that meets the buyer’s requirements, obey the buyer’s lawful instruction, fulfill fiduciary duties of loyalty, confidentiality and full disclosure of all conflicts of interests that may arise and discover relevant facts about a property for which the buyer is considering making an offer.
What to expect from a Realtor
Realtors know a lot about market values, the properties available in your price range and homes that will match your individual needs. A Realtor can tell you about financing and property taxes, as well as schools, places of worship and services in the neighbourhood.
The Realtor will:
- Review your list of needs and wants in a a home and help you determine the price range of homes you can consider.
- Answer your questions about the market you’re interested in and help you compare homes from one neighbourhood to the next.
- Introduce you to a broad range of possible homes.
- Preview properties so you’re shown only those homes that fit your budget and match the needs and wants you’ve prepared.
- Make the appointments to show you potential homes.
- Explain the various financing alternatives available and provide up to date information on interest rates and mortgage options.
- Act as a mediator to head off potential conflicts between you and the seller, draw up a legally binding contract and assist you with all the details required to complete the transaction successfully.
What is skilled and conscientious service?
Fiduciary duties to a client require the buyer’s representative to exercise skilled and conscientious service to protect the client’s interests. The following are some of the things buyer’s representatives can do to protect their buyer-clients:
- Obtain a property disclosure.
- Recommend inspections.
- Include approved protective clauses in any purchase contract.
- Prepare a comparative market analysis (CMA) on your purchase.
- Provide home warranty information.
- Provide other professionals.
- Provide pertinent information about issues that affect the value of the property.
- Lot size and zoning.
- Additional restrictions.
- Flood plains.
- Quality of Title.
- Future development.
- Advise additional charges.
- Estimate appreciation.
- Describe traffic.
- Ask about special needs.
- Stay informed, and inform your buyer-clients of local issues.
- Notify your buyer-client about potentially negative influences.
Be honest and remain loyal to your Realtor
Once you have selected your Realtor, be honest in discussing your financing situation and carefully review the features you are looking for in a home.
Most importantly, remain loyal to the Realtor you’ve chosen if the Realtor earns your trust. This individual will be spending a lot of time and effort on your project but won’t be paid unless and until the transaction is completed. In return, the Realtor deserves a degree of loyalty from you. Getting involved with several Realtors creates unnecessary and confusing duplication of effort. Most Realtors in an area use the same MLS and are likely to show you the same homes. Buyers who attempt to deal with several Realtors may miss out on the comprehensive service one is entitled to expect through loyalty with a single Realtor.
It is mandated that buyers also enter into a contract with Realtors. A Buyer Representation Agreement establishes a formal and exclusive relationship between the buyer and the brokerage and it’s Realtors.
Asking the right questions
You’re interviewing potential agents for the job of helping you find a home. You should ask these questions where you’re interviewing prospective agents. An experienced, reliable agent will have no problem with being put in the hot seat.
- How long have you been an agent?
2. Do you work full time?
3. Who do you represent?
4. How many clients do you have right now?
5. Do you have the time to work with me?
6. Do you use online search tools?
7. How many agents are in your office?
8. Does your office have an active and attentive manager/Broker?
9. Will any responsibilities in my home search be delegated to someone else?
10. What neighbourhood/types of homes do you specialize in?
11. What price range do you deal in primarily?
12. How many people have you helped sell a home over the past year?
13. Can you refer me to real estate lawyers, mortgage brokers, inspectors or appraisers if I need their services?
14. Do you have client testimonials?
15. Do you have the ABR designation, and what educational programs have you completed?
How do real estate agents get paid?
The seller’s agent
The agent retained by the seller is called the listing or seller’s agent. The listing agent’s broker generally requires the seller to give the broker an exclusive right to sell the house for a certain number of months. During that period, the listing broker will receive the full commission if a contract for the purchase of the property is signed, regardless of the circumstances of the sale. The justification for this is that the listing agent’s brokerage will have expended time and money in advertising, listing the property, helping to prepare the house for showing and otherwise promoting the sale.
The buyer’s agent
The agent working with individuals looking for a home is the selling or buyer’s agent. Common practice is that the listing broker will share the commission with the broker representing the buyer.
Where does the commission money come from?
The total sales commission is almost always paid by the seller. There are situations where the parties negotiate a sharing of the commission or the buyer assumes the fee. However, as a practical matter one might say that the buyer is always paying the commission. This is because the commission is generally included in the sale price of the house. The payment to the brokers might come out of the proceeds before the seller receives payment, but the seller figures the commission into the asking price.
Understanding the Buyer Brokerage contract helps protect you
The Buyer Brokerage contact is the written agreement that establishes an agency relationship between you (the buyer) and the real estate brokerage (and its agents). When you sign the agreement, you agree to be represented by only the agent you’ll be working with and all other agents in the same brokerage.
The Buyer Brokerage contract sets out duties and responsibilities of both parities. Your agent must provide you with information about the property and guide the transaction. Buyers have obligations under the contract as well.
In signing the contract with a brokerage, you agree that all agents in the office can find suitable properties and help you negotiate the terms of any Purchase Contract. You need to provide information to enable the brokerage to search for properties that make the most financial sense for you. Finally, you need to inform the brokerage of any properties you’re interested in viewing. The buyer’s responsibilities under the contract enable the buyer’s agent to do the best job she/he can do for you.
Paying your agent
Another important part of the Buyer Brokerage contract is the section that determines the brokerage’s compensation. Real estate commissions are negotiable in Canada and you and your agent have to agree on a suitable amount of compensation. Usually, the contract will state that the brokerage will receive either a portion of commission offered by the seller’s brokerage or a fee that is negotiated between you and your agent. If the seller’s brokerage doesn’t offer a portion of commission to your buyer’s agent, you may want to take that into consideration when making an offer. Some agents might ask for a deposit on their fee to be held in trust and applied to any commission payable or refunded to you if the contract expires.
Ending the contract
The Buyer Brokerage contract is in effect until the expiration date negotiated between you and your agent. The contract can be renewed or extended if you and your buyer’s agent need more time to search for property or close a deal. The Buyer Brokerage contract is a legally binding agreement but it can be amended or cancelled under certain circumstances. For example, if you or your spouse are suddenly transferred, talk to your agent about terminating or amending the contract. Make sure to ask your agent about any ongoing obligations on your part if the contract is terminated.
Ensure your buyer’s agent is a Realtor
Remember, not all agents are Realtors. In addition to complying with provincial laws, Realtors belong to the local real estate board and subscribe to the strict Code of Ethics and Standards of Business Practice of the Canadian Real Estate Association. This ensures you will receive the highest level of service, education and integrity.