ARE YOU THINKING OF BUYING OR SELLING REAL ESTATE IN THE FUTURE?
THE IDES OF MARCH FOR THE REAL ESTATE INDUSTRY IN B.C.
Original Post by In House Real Estate Team
The Superintendent of Real Estate, Mr. Michael Noseworthy has given directions to the Real Estate Council to implement new rules for the real estate industry effective March 15th, 2018. These new regulations are supposed to protect you, the public.
I am not sure that will be the case. Let’s look at an example of what could happen.
YOU ARE GOING TO SELL YOUR HOME
The first thing you need to do is find a REALTOR® to represent you. You call in 3 realtors and end up choosing Mr. Agent whom you have worked with over the years. He is a true professional and you have had a relationship with him for years.
He knows you and your family. He knows the neighborhood. He has listed and sold many properties in the area. He is ethical and trustworthy.
A good REALTOR® is one who forms a relationship with his clients that out lasts the sale or purchase of real estate. It lasts a lifetime. Mr. Agent has built a strong clientele and he might have buyers that would be interested in buying your property.
He is a hard worker and a fantastic negotiator who will represent you and guide you through the offer presentation, with your interests being his number one priority. He will look after you.
Mr. Agent puts your property on the Multiple Listing Service (MLS®). He confirms what he will do for you including showing the commission you agree to and what you will net if the property sells at the asking price.
You agree to this in writing and full disclosure has been made. It takes a great amount of time for Mr. Agent to review all the documentation with you since he wants to make sure he answers any questions or concerns you may have. He learns about the features of your property.
He reviews his marketing plan with your input and gets down to business to represent you 100%. Mr. Agent also contacts other colleagues of his to let them know your home is coming onto the market, does the advertising, has photos and brochures prepared, and plans an open house for this Sunday from 2:00 to 4:00 p.m. with your permission.
HERE IS ONE PROBLEM FOR YOU
You have asked Mr. Agent if he knows of any possible buyers for your property. He now has to explain the ‘new consumer protection rules’.
Limited Dual Agency has been banned. This means that Mr. Agent is ONLY allowed to represent you in the sale of your home. If he has any buyers that he has established confidential information with, he CANNOT represent them to buy your home.
So, any buyers Mr. Agent may have – he has to ‘fire’ them and refer them to another REALTOR®. What if they had been looking at homes with Mr. Agent for a few weeks and Mr. Agent knew that this was the perfect property for them to buy?
Even if you gave your written consent that it is okay for Mr. Agent to bring offers from any of his potential buyers, this will not be allowed under the ‘new consumer protection rules’.
Now consider: Mr. Agent has buyers that might want to buy your home, but he is not allowed to bring offers to you from them.
How does that protect or help you with the sale of your home? How is that helping the buyers who want to buy your home?
Okay, so let’s have Mr. Agent ‘fire’ his buyers that he had been working with and established a rapport with. Let him refer these buyers to another REALTOR® so he will only be looking after your interests.
Sounds great, BUT this will not be allowed, either.
Mr. Agent refers his buyers to Mrs. Buyers Agent. Mrs. Buyers Agent shows the buyers your home and they prepare a written offer to buy your home. Perfect; Mr. Agent will represent you the seller and Mrs. Buyers Agent will represent the buyers.
Under the ‘new consumer protection rules’, however, it is also not allowed. The new rules have created an even bigger problem for the public.
Mr. Agent does have some confidential information about the buyers and obviously has confidential information about you the seller, so if Mrs. Buyers Agent brings an offer, the rules state that Mr. Agent MUST NOT continue to represent you in the sale of your home for this buyer.
Mr. Agent would have to ‘fire’ you as his seller client and ask another REALTOR® to ‘step-in’ and handle the negotiations for you the seller.
Mr. Agent must ‘fire’ both his buyers and you the sellers. This is called Double-recusal.
Is this protection for buyers and sellers of real estate?
This is not going to help you sell your home nor help his buyers buy your home.
Now that Mr. Agent has ‘fired’ you, does the ‘step-in’ agent know your property, the neighborhood, the requirements you have told Mr. Agent about, your financial situation, what is included or excluded in the sale, what completion and possession dates you the sellers want, and are there any disclosures that must be made [often separate, in writing and prior to entering into a contract]?
Does this ‘step-in’ agent know how to represent you and your interests in the negotiation on the sale of your home? Do you trust him?
One of the main reasons that you hired Mr. Agent for was his negotiation skills. You knew he would look after you and he would negotiate hard to get you the highest price possible. You also hired Mr. Agent because he has been in the industry for years.
His business was built on referrals and recommendation and he has a large clientele base with perfect buyers for your home. Mr. Agent does in fact have the buyer for your property, but he is not allowed to sell it to them.
This is the most critical negotiation of your lifetime and you cannot have the REALTOR® you originally contracted with to look after your needs or negotiate on your behalf.
Please tell us how these ‘new consumer protection rules’ will protect a buyer or seller of real estate.