Real Estate Agency
To understand a buyer agency, it is important to understand how a real estate agency works. A real estate agency offer different possible forms of agency relationships to consumers to make sure the benefit from the best service. The relationships fall in three categories – buyer representation, seller representation and customer representation.
When working with a Realtor, it is important to find out whom the Realtor works for and to whom the Realtor is legally obligated. Working with a buyer agent is the best way to ensure your interests are taken into account, and not the seller’s or anyone else’s. A buyer agency builds a relationship where both the brokerage and the buyer agent works to put the buyer at an advantage.
Buyer Agent: The Ontario Real Estate Association has developed a standard buyer agency agreement that brokers can use with clients. Any licensed real estate salesperson in Canada can legally act as a buyer's salesperson/broker. A buyer agent performs services for you that a seller's salesperson can't, such as showing you reasons not to buy a particular property.
A good buyer agent will include contingencies in the contract that protect you, rather than the seller as in most standard contracts, and keep confidential any information that could hurt your bargaining position.
The hallmarks of this relationship with the buyer agency are good faith, full disclosure, competence, obedience, and accounting. The buyer agent and the brokerage will enter into a signed buyer agency agreement that details their relationship.
Bear in mind that the seller's salesperson (salesperson whose name is on the lawn sign) always works for the best interest of his/her seller. Brokerages have to disclose all relevant information they have on property defects to sellers. But brokerages must tell buyers only about material defects that render the property dangerous or unfit for habitation, not necessarily all defects in a property. That's where a buyer agency in Mississauga comes in handy, being free to talk about anything that can affect the buyer's interests.
Understand Buyer Representation Agreement.
The seller usually pays all commission to the listing brokerage who, in turn, forwards the appropriate portion to the buyer’s brokerage. Alternatively, the buyer’s brokerage can be paid directly by the buyer and, therefore, this amount does not form part of the sale proceeds. In most transactions, the commission to the buyer’s brokerage is paid via the listing brokerage from the proceeds of the sale.
When a real estate company is a “seller's agent,” it must do what is best for the seller of a property. Seller Agency in Mississauga establishes a relationship in which the brokerage and its salespeople represent the interests of the seller exclusively. This agreement/contract sets out what the seller instructs the brokerage to do and what services are provided under a seller agency.
Further, it provides that representatives of the seller will use their professional negotiation skills to seek qualified buyers and generally promote the listed property, while keeping information concerning the seller confidential and always acting in the seller’s best interests. The hallmarks of this relationship between the seller and the seller agency are good faith, full disclosure, competence, compliance, and accounting.
The seller traditionally pays a commission directly to the brokerage. The listing agent then pays any brokers or salespeople within its employ and, if applicable, any co-operating brokerages involved in the transaction. The seller then signs the agreement with the listing agent.
Understand Listing Agreement.
Occasionally a real estate brokerage will represent both the buyer and the seller. The buyer and the seller must consent to this arrangement in writing. Under this multiple representation arrangement, the brokerage must do what is best for both the buyer and the seller.
Since the brokerage's loyalty is divided between the buyer and the seller who have conflicting interests, it is absoluteley essential that a multiple representation relationship be properly documented. Representation agreements specifically describe the rights and duties of everyone involved and any limitations to those rights and duties.
A real estate brokerage may provide services to buyers and sellers without creating buyer or seller representation. This is called "customer servive." Under this arrangement, the brokerage can provide many valuable services in a fair and honest manner. This relationship can be set out in a buyer or seller customer service agreement. Real estate negotiations are often complex and a brokerage may be providing representation and/or customer service to more that one seller or buyer. The brokerage will disclose these relationships to each buyer and seller.
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