[ RECO, The Real Estate Council of Ontario Administers and Enforces the Real Estate and Business Brokers Act, 2002, to which Real Estate Salesmen are subject. ][ TREB, The Toronto Real Estate Board ][ Finding a Home to Buy ]
Buying FAQ, Working with a Real Estate Agent
- What are the benefit of working with a Realtor®?
The main advantage of working with a Real Estate Agent is having a fully regulated, insured, knowledgeable expert representing YOU and Your best interest.
Strictly speaking a Real Estate Agent should be referred to as a Real Estate Sales representative or a Realtor® We use the term agent in this article to mean this.
A Realtor® is familiar with the legalities involved and with current market conditions. A Realtor® has experience deciphering listing information and interpreting what is really said. This can save you considerable time. "Charming fixer upper" and "gut-job" are two views of the same house!
One further benefit of working with a Real Estate Agents is that they will have access to the Realtor® area of the Multiple Listing Service. MLS. This enables him to access homes presented by over 20,000 other Real Estate Agents. The Realtors® section of MLS also has access to new listings a day or more earlier than the public site.
Another advantage of buying or selling with a realtor® is increased level of security. A brokerage has a number of Trust bank accounts protected both legally and with special insurance. These protect any deposit or other monies kept in trust.
- What is the "Agency Relationship" with my Real Estate Agent?
- Agency is complex and highly regulated. It is a formal legal binding relationship. In fact it is a CONTRACT. Briefly, when you sign an agreement of representation with a Realtor®, you agree that the Broker to whom the Realtor reports to, actually represents you. This representation is delegated to the Real Estate Agent who has several legal responsibilities, towards the buyer. These 6 legal duties are:
- Disclosure, where the agent must disclose to his principal any relevant information regarding the purchase he has been engaged to assist.
- Competence, the agent is under legal duty to use superior skill and knowledge while pursuing the buyer's affairs. This is a significant benefit of working with a Real Estate Agent. There are strict requirements for keeping his knowledge up to date and to renew a licence, proof of successful completion of several courses has to be provided.
- Obedience, to the principal's lawful and reasonable instructions even if the agent does not agree with them.
- Accounting, for all monies or property entrusted to his care relative to the principal's transaction. Usually this refers to the deposit, but can be other disboursements done for the buyer.
- Confidentiality, regarding information acquired as the buyer's agent for any purpose that is likely to cause the principal harm or to interfere with the buyer's business.
- Loyalty, the agent BY LAW must place the interests of his client above all else except the law in carrying out his functions
In return, the buyer is obligated to compensate the Realtor according to the agreement. The buyer is also subject to the various clauses he has agreed to within the agreement with his Realtor®.
- Can I fire my Agent or can my Agent fire me?
Agency can only be terminated by specific procedures or circumstances: Mutual consent, revocation, expiry, completion of the sale or the impossibility of selling, death-mental incapacity or bankrupcy and finally the cancellation of the agents license/registration.
NOTE: This is an informal description of Agency, it is not claimed to be the complete or definitive description. The brochure "Working with a Realtor" is a good source of information. Nick Boothby will be happy to send you a copy upon request.
- How much commission are Realtors paid?
The commissions are paid by the vendor from the money he got from the sale. There is no set amount but at this time in the Toronto area a common commission split is a total of 5% of the selling price, 2.5% for the listing agent and 2.5% for the buying agent.
To ensure more advertising or better service, an owner sometimes chooses to offer more, which acts as an added incentive for agents to show your property, and provides a larger amount for the seller agent to advertise with.
An agent will sometimes discount the commission if expenses are reduced. If for example an agent sells a home and buys a new home for a client then expenses are reduced. Agents who significantly discount commissions run the risk of not having enough resources to pay for marketing and advertising expenses. Finding a home for a client can take a great deal of time and effort. There are also significant fees paid for insurance, training and professional fees. In the end "You get what you pay for!"
- What do I get for my money?
- There are many benefits of working with a realtor®
- Your Agent will search MLS and send you information about potential properties of interest. You will likely have a search set up to automatically send you properties that fit your criteria.
- If any property appeals to you your Real Eatate Agent will arrange a viewing. With his or her experience and his contact with the selling agent he will be able to answer any question you might have about the property.
- He or she will be able to prepare opinions of value for any home you are interested in. This is a very great advantage of working with a Real Estate Agent. This knowledge will allow you to plan how much you are willing offer for a home.
- He or she will prepare offer documents that contain clauses that protect your interests. He will stand by your side during the negotiation and give you advice.
- He or she will negotiate on your behalf.
- He will help you deal with any difficulty that arises, or any question you have.
- The brokerage will have lists of Inspectors, Insurance Agents, Mortgage providers, Lawyers, and other suppliers that have proven reliable. The agent is not entitled to receive compensation from these referrals and must disclose any advantage derived if any.
- Agents working in specific area often know of homes that are coming onto the market before they are officially listed.
- One very great advantage of dealing with a Real Estate Agent is that he/she is professionally insured. Hopefully this is an advantage you will not need to benefit from! Nevertheless it makes your purchase safer.
- What about discounted commission?
- Some agents will discount and this usually translates in a lower level of service. Sometimes agents will discount a commission if they sell your home and help you buy a new home. The reduction in their costs allows them to pass this saving on to you.
- Why use an agent?
An agent will often help you negotiate a better price on a home because you have the information you need to make an informed decision. As a trained professional your Realtor will have an accurate idea of what the home you are bidding on is worth and will be able to advise you if on the value of the home
An agent know where to find title information, history of the home, tax and assesments
- What is a HOLDOVER period?
- A holdover provision is found in agreements with Realtors. Under this provision, while the realtor's authority ends upon the expiry date of the agreement, if the brokerage (relpresented by the Real Estate Agent) introduces a person to the property during the term of the contract, who then effects a private sale with the owner during a specified period after the expiry, the owner is liable for a commission payment to that broker.
Nick Boothby, Maddy Dennett and Greg McDowell
REALTORS® / Salespersons
Christine DeMerchant Unlicenced Support Person
Real Estate Homeward, Brokerage
1858 Queen St. E., Toronto, On, M4L 1H1, Canada
tel: 416-698-2090 fax: 416-693-4284
Maddy's cell: 416-951-5507 Greg's cell: 647-984-3065
emails: Nick Maddy Greg
Disclaimer: Nick Boothby and his team take great care in insuring the accuracy of our facts but some information cannot be verified. We do not warrant or assume any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process discussed or presented.