Some Comox Valley residents like to view local homes. A few people in the past month expressed surprise when I asked to meet them at the office after they contacted me for the first time and asked me to arrange a viewing of someone’s home for. Viewing any real estate such as a home for sale is a professional real estate service. There is a good reason for this and it is worth a short blog to explain why this happens.
First, the Real Estate Services Act is among the many different laws in British Columbia that govern and regulate the real estate services industry. This Act came into force in early in 2005. Among other things, the Real Estate Services Act imposes licensing requirements on people who provide trading services related to real estate. Trading Services is a term used to refer to the activities related to the purchase and sale of real estate. Trading services are more commonly referred to as professional real estate services. The Real Estate Services Act (Part 1) defines these services as including:
- Advising on the appropriate price for the real estate;
- Making representations about the real estate;
- Finding the real estate for a party to acquire;
- Showing the real estate;
- Negotiating the price of the real estate or the terms of the trade in real estate;
- Presenting offers to dispose of or acquire the real estate; or
- Receiving deposit money paid in respect of the real estate.
Full-service and full featured homes listed for sale in the Comox Valley regional district area by agents often provide many more services than those mentioned on this list to help people buy and sell homes. Real estate agents provide professional services to people in anticipation of getting paid for these services. This expectation is no different than any other person working in the service industry sector that accounts for nearly 70% of the jobs in Canada.
It is important to understand that most real estate agents who are licensed through a particular agency do not get paid a salary by that agency. They only get paid from the commission that is paid when a real estate transaction completes. As well, while the agents must be licensed through the agency to work, they are generally not employees of the agency. In many cases, they are independent contractors and sole proprietors of their own business. They must generate their own business, and pay their own business expenses which are numerous and varied as any other business owner will appreciate. As a Comox Valley realtor, I operate my own business.
Showing a home takes a real estate agent time, effort, and money. On average, it takes 2-4 hours out of the day of a real estate agent to show a home. First, the agent must contact the seller’s agent and request a viewing. The seller’s agent must then contact the seller with the information related to Courtenay real estate listing to coordinate and schedule the viewing. Sometimes this process is straightforward and quick. At other times, it is not. If a tenant is involved, the tenant must be notified of the request at least 24 hours in advance. If the requested time and/or day does not work for the seller (or tenant if applicable), additional coordination is required. The agent must then notify the person that requested the viewing, meet them to explain a form (the form is discussed below) to them, drive out to the home, show the home, and drive back.
Just like any other business person, Comox Valley estate agents (including buyer’s agents) expect to be adequately compensated for the services that they provide. They are not obligated to show homes whose sellers choose not to offer any (or adequate) compensation. Real estate agents would not stay in business for long if they provided professional services for free, or for that matter, did not generate enough revenue to pay for their expenses. For those related to the showing of a home, the agency does not pay for the agent’s gas or time. But, why meet at the office first?
The Real Estate Services Act (Rule 5-10) states that before providing trading services to someone (such as the showing of a home), the agent must disclose the nature of the representation that will be provided. The Law of Agency governs the relationships that can exist between an agent and the person to whom they are providing services. In June 2012, the Law of Agency changed in British Columbia. The nature of the representation that an agent can provide to a person is explained in the BC Real Estate Association (BCREA) brochure – Working With A Realtor – Designated Agency. The Realtor Code (Article 2) reinforces these laws by stating that agency disclosure shall be made at the earliest opportunity and in any event prior to the Realtor providing professional services which go beyond providing information as a result of incidental contact by a consumer.
In addition to agency disclosure, real estate agents are required by law to identify and document the identity of people before they engage in real estate transactions. This law was applied to real estate and came into effect on 23 June 2008. The form used for this purpose produced by the Canadian Real Estate Association (CREA) called the Individual Identification Information Record is the form most often used. Many agencies now use this form for the protection of sellers before homes are shown by a buyer’s agent. If it was your home, would you want someone walking through it if you (and the agent showing it) had no idea of the real identity of the person entering your private residence?
So, a real estate agent is required by law to explain agency before providing professional real estate services to any person. Since the showing of a home is defined in law as a professional real estate service, the agent will need to meet with the person before showing the home to do this. In many agencies, the agent will also be required to identify and document the identity of the person before showing them a home.
Are you thinking about buying or selling Comox Valley real estate? Wondering about the real estate considerations of selling a home? Contact Brett Cairns of RE/MAX Ocean Pacific Realty.
by Brett Cairns