Do It Yourself
Some people prefer to take things on and do it themselves. Yes, you can sell your car yourself, medicate yourself, and do many other things without the benefit of professional help that is available to you. BUT, is it in your best interest to sell or buy a home yourself? For most people, a real estate transaction truly is their most expensive transaction. What are the risks to you if something goes wrong?
Real Estate Law
There are more than 35 different laws that apply to real estate in the Province of British Columbia. Over the years, when real estate transactions go wrong, the courts generally have taken a dim view on ignorance of the law, whether as a home buyer or as a home seller. Laws can and do change and there have been some significant changes in the past few years that directly affect home buyers and sellers. More changes are anticipated.
Do you know that all real estate agents worked for the seller until 1994 under Seller Sub Agency when Limited Dual Agency was introduced under Assumed Buyer Agency? Do you know that you presently can, and should, be represented exclusively as either a buyer or as a seller today under Designated Agency? Do you know what this means?
Real Estate Contracts
The contact of purchase and sale governs the real estate transaction between the buyer and the seller. Each contract should properly reflect the intentions of each client and it should protect their interests in the transaction.
Paragraph 18. REPRESENTATIONS AND WARRANTIES (of the BC2057 REV. DA Mar 2017 version of the BC Real Estate Association and The Canadian Bar Association British Columbia Branch) states:
There are no representations, warranties, guarantees, promises or agreements other than those set out in this Contract and the representations contained in the Property Disclosure Statement if incorporated into and forming part of this Contract, all of which will survive the completion of the sale.
Paragraph 20A. RESTRICTION ON ASSIGNMENT OF CONTRACT (of the BC2057 REV. DA Mar 2017 version of the BC Real Estate Association and The Canadian Bar Association British Columbia Branch) states:
The Buyer and the Seller agree that this Contract: (a) must not be assigned without the written consent of the Seller; and (b) the Seller is entitled to any profit resulting from an assignment of the Contract by the Buyer or any subsequent assignee.
Are you trained in writing real estate contracts? How much do you know about real estate contract law? Do you know which clauses should be added to a contract to best protect your interests? Why would you take this on yourself if you are not experienced and well-versed in writing such contracts?
Real Estate Representation in BC
Real estate is provincially regulated within Canada. There are often differences in the real estate laws, regulations, and procedures of each province.
As a seller, you can be represented exclusively by a real estate agent under Designated Agency. Do you know what you must disclose about your property under the law?
As a buyer, you can be represented exclusively by a real estate agent under Designated Agency. Do you know that it is not in your best interest to contact a listing agent directly and why? Do you know that you cannot necessarily rely on what is stated in a listing and why? Do you know why it may not be in your best interests to attend an open house without buyer representation and why? Do you know that trying to find a home to buy on the internet is not a good idea and why?
Real estate agents should have expert local knowledge of their working area. Not all do. If you buy a home, or list a home, with an agent who does not have intimate knowledge of, and work full time in, the local real estate market area, you are taking additional risk that you may not want to take. Do you know why?
Competence and Experience
Besides knowledge, real estate agents should be able to provide you with competent services. Agents generally vary in terms of their experience, competence, and knowledge. They are also generally differ in terms of their character, and motivation. Choose wisely.
Listing and Selling Agencies
There are two parties to a real estate transaction – the seller and the home buyer. The transaction can involve two different real estate agencies and two different real estate agents. When less than two agents are involved it is not often in the best interests or either the seller or the buyer.
The Listing and SOLD Sign
When a real estate agent takes a listing from a home seller they will most often place their sign on the lawn of the home that they have listed. When the home sells the agent will place a SOLD sign on top of the sign BUT that does not mean that they were the ones who actually sold the home. Most often that is not the case but the name of the selling agent is NOT acknowledged on the sign.
Pay for Services
Many, and perhaps most, real estate agents are independent contractors who work for pay on a commission basis. This means that they only get paid for their time and services when a sale completes. Most listings that appear on the Multiple Listing System are associated with a listing contract that specifies the amount of commission that will be paid to the buyer’s real estate agency (also known as the “selling” agency). However, there are some exceptions. While the seller often establishes the compensation through the listing contract, the buyer actually pays the commission from what they agree to pay for the home. This part of the real estate process is not well understood nor is how the commission is divided among a number of different people. The specifics of this part of the process should be fully explained by the agent who represents each party to the contract.
Clearly, this small bit of information only scratches the surface on the real estate process. Materials are current as of this date (July 9, 2017) and are for information purposes only. They are not intended to constitute or replace legal or any other real advice when dealing with the subject matter. Check with the author or conduct your own due diligence to update it if referring to these materials in the future.
To contact Brett to represent you as either a buyer or as a seller please use the form below. Brett will review this type of information about the real estate process with you and much more.