So you are looking for a new home, you have searched the local paper, checked out mls.ca and decided that there are options out there that meet your needs. You know the neighbourhood you want to live in and you are pretty clued up what is a good deal in that area so you don’t need all the great information that a realtor can provide like: schools, up and coming neighbourhoods, proximity to shopping and comparable sales. So why not just directly contact the listing agent?
Here’s why. The listing agent is contracted to represent the Seller of the property. If you go directly to them they will either offer you a customer as opposed to client relationship or you sign up as their client too and then you get into a situation called multiple representation. In this case the realtor is trying to serve two masters as both the buyer and seller representation agreements require them to act in the best interest of their clients, so both clients get a scaled down version of the service to try to minimise potential conflicts. If you opt for the customer relationship the realtor is obliged to be honest with you but is not required to always act in your best interests – that is reserved for the Seller who is a client.
If you go in there with your own representation you have someone that is working 100% for you. And what is even better, with the way things stand in the industry at the moment the cost for this service is paid for from the commission that the listing agent charges the seller. (Although this may be subject to change – see my earlier post on the Competition Agreement). In summary you get a trained individual to help you negotiate the deal and point out any flaws in the property or neighbourhood that you may miss. In addition many realtors have great contacts with mortgage professionals which can save you big bucks. And the total cost to you for all these benefits is nothing – so perhaps the question should be “Why not use a buyer’s agent?”
There has been a lot of reporting about the new changes to the way the real estate market will operate in Canada with the acceptance by Canadian Real Estate Association (CREA) of the Competition Consent Agreement. This agreement states that CREA or individual real estate boards cannot discriminate against agents who wish to merely list a property on the Multiple Listing Service (MLS®) rather than offer the full service. Interestingly CREA does not believe that there are any rules currently in place prohibiting mere listing but if any real estate boards do have any such rules then, under the new agreement, they must be abolished or the board will run the risk of losing its license to operate under the MLS® trademarks.
One of the two most common conditions that you find in any offer to purchase a home is the Home Inspection Condition which usually says something along the lines of
“This offer is conditional on the inspection of the subject property by a home inspector at the Buyer’s own expense, and the obtaining of a report satisfactory to the Buyer in the Buyer’s sole and absolute discretion”
This condition is included to protect the buyer and basically says that the buyer is going to bring along an expert who is going to take a good, hard look at the property and identify as many issues with it as possible. The buyer can then decide whether he wants to buy the house or not, based on the information. There is also the potential to re negotiate a new price based on the home inspection but attempting that gives the seller the option to back out of the deal too. Pretty basic stuff, anyone who has bought or sold a home, or watched ‘Buy me’ is aware of the existence and role of the home inspector. What everyone may not know is that, unlike us realtors who have to study and pass three courses and be registered prior to being able to trade in real estate, home inspectors do not require any registration or indeed any training whatsoever. Anyone who wants to can get up one morning and decide to set themselves up as a home inspector. Scary eh?
So what can you do to ensure that the ‘expert’ you employ truly is an expert. Happily there are organisations both at the National and Provincial level that can help. In Ontario the Ontario Association of Home Inspectors (OAHI) provides a system of accreditation which is obtained through courses and exams. The OAHI has the exclusive right to define qualification requirements, regulate its members and grant the designation “Registered Home Inspector” and “RHI” to qualified practitioners in the Province of Ontario.
Visit their website for more information at: