When it comes to just about every kind of contract, signing on the dotted line makes us all a little bit nervous. Sometimes we like surprises, like a surprise party or a surprise gift but when it comes to buying a property surprises are the last thing you want. REALTOR®’s believe it’s important for you to understand for whom they are working, and what services you can expect from them. That way there are no unpleasant surprises later in the transaction.
When selling a property, most people are aware they sign a Listing Agreement with a REALTOR®. There is, however, an agreement that REALTORS® ask their home-buying clients to sign. It’s an agreement that works in favour of buyers, guaranteeing the very best in real estate service.
The Real Estate Council of Ontario (RECO), a public agency formed to protect consumers and regulate the industry, introduced guiding principles mandating that REALTORS® ask their clients to sign a Written Representation Agreement at the earliest possible time.
When choosing representation, Buyer’s have the option to sign either a Buyer Representation Agreement or a Buyer Customer Service Agreement.
The Buyer Representation Agreement signifies that for a designated period of time, the buyer has engaged a specific REALTOR® firm to work exclusively on his or her behalf at finding a property. The agreement confirms the REALTOR®’s commitment to make his or her best efforts for the buyer.
By signing the Buyer Customer Service Agreement the buyer acknowledges the Broker has provided him/her with written information explaining agency relationships including Seller Representation, Buyer Representation, Multiple Representation and Customer Service.
When buying a property you will be asked to sign some form of agency agreement. The use of written agency agreements, whether with buyers or sellers, is now mandatory for all real estate practitioners in Ontario. As an agent, the REALTOR is legally obligated to look after the best interests of the person he or she is working for. The agent must be loyal to that person. The Buyer Representation Agreement, and an explanation of each clause is set out here.
The real estate profession itself lobbied for many years for the creation of the Real Estate Council of Ontario (RECO), a self-management body for the profession in Ontario. As of January 1, 2000, all licensed real estate brokers and sales people must follow certain rules designed by RECO to protect consumers.
These rules include clearly establishing whom the REALTOR is working for in a real estate transaction — the buyer or the seller — and acknowledging that relationship in writing. Failure to have a written agency contract is a breach of the RECO code of ethics.
Buying or selling a property is an exciting, but complicated process. A REALTOR’s expertise will ensure your real estate transaction runs smoothly. Knowing that a REALTOR is in your corner, acting as your advocate and representing your best interests will give you greater peace of mind.