The short answer is no. You don’t have to sign a buyer representation agreement (BRA) with a brokerage, but you should consider the benefits it offers you as a home buyer.
A BRA defines the relationship between the buyer (you) and the real estate brokerage that is working on your behalf. It sets out the property type and geographic location for your potential new home, lists the services to be provided, addresses the issue of commission that may be payable to the brokerage, and it also specifies the duration of the agreement.
Signing a BRA confirms in writing that you are a client of the brokerage and documents the terms and obligations of the brokerage-client relationship. As a client, the brokerage has a special responsibility to follow your instructions, protect your confidential information and promote and protect your best interests.
To make the most of this relationship, it’s important to identify your needs and expectations. Discuss what services you are looking for and determine whether the brokerage and the salesperson or broker are the right match for you. To avoid misunderstandings later on, don’t make any assumptions and be sure to list all details in writing. You should also ask what the broker or salesperson expects from you and what your obligations are.
If you’re not comfortable with the terms of the BRA, you can enter into a Customer Service Agreement (CSA) with the brokerage instead. In this scenario, the obligations of the brokerage will be different. While they will still help you buy or sell a home, they won’t have the same level of responsibility to you as they would if you were a client. For example, the representative would still show you properties and help you fill out paperwork, but they wouldn’t necessarily provide advice. While the brokerage will have less of a commitment to you, so will you to the brokerage. Typically, CSAs are not legally-binding contracts.
Think of it as though a BRA is a wedding band, while a CSA is a promise ring. The level of commitment from both parties will be less with a CSA. Regardless of whether you sign a BRA or CSA, the brokerage will still have to act fairly, honestly and with integrity and provide conscientious and competent service. Keep in mind, a brokerage can choose to decline your business if you choose not to enter into a BRA.
As with any contract, take the time to read and understand each clause of the BRA or CSA. If you’re unsure about something, ask questions or consider seeking legal advice before signing.
And remember that while there are rights that come with any agreement, there are also obligations.
You are selling your house. Your real estate agent already has an interested buyer, but there’s a catch.
The salesperson represents the buyer as well as the seller. Is that allowed?
About one in five people believe — incorrectly — that real estate professionals can act only for one party in a deal.
Fewer than half know the facts: Ontario real estate agents can represent both sides in a deal if the parties agree to it in writing.
This Q&A is part of a public education campaign by the Real Estate Council of Ontario (RECO), a regulatory body for the real estate industry, to coincide with financial literacy month in November.
Your brokerage must disclose that it proposes to represent more than one client in the transaction and tell you about the differences in its obligations resulting from this arrangement.
What if one party refuses to give written consent?
It’s up to the brokerage to decide which client to keep. If you are the one who is released, you can ask the brokerage to give you a referral to another firm.
What if the broker offers to cut the commission as part of the deal? Is the saving worth trading off some of your client protection?
A conflict of interest can arise when a buyer and seller are clients of the same brokerage, writes RECO registrar Joseph Richer in a Toronto Star article.
For example, the broker may have information about your home and your selling strategy that could help the buyer put together an offer. Similarly, the broker may know something about the buyer’s circumstances that could be useful to you in your negotiations.
“No matter what happens,” he says, “the brokerage must always deal with you fairly, honestly and with integrity and provide you with conscientious and competent service.”
Here’s another question. Is the answer yes or no?
You find a home you love and you make a conditional offer, subject to financing. Your conditional offer is accepted, but the mortgage falls through.
You have already put in a sizeable deposit to make your offer more attractive. Will you get your deposit back?
More than half the survey respondents believe — incorrectly — that your deposit is refunded automatically if you place a conditional offer on a home and the deal doesn’t proceed.
In fact, your deposit is held in a brokerage’s trust account and can be released only if both the buyer and the seller agree. If the seller demands to keep the deposit, your only recourse is to obtain a court order.
Check out a new website, called RECO Fact or Fiction, where you can do a quiz as a buyer or a seller of a residential property. I found the questions written in a way that the answers were obvious, except for the two I cite in this column.
The quiz has links to RECO’s main website for information. For example, you can learn about an insurance program that protects your deposit from a brokerage’s fraud, solvency or misappropriation of funds. You are covered to a maximum of $100,000 per claim.
Here are other survey findings:
More than half of respondents think there are standardized representation agreements for buyers and sellers. This is not the case. Many terms and conditions, such as how long they will remain in effect, are to be discussed between brokerage and client.
Almost half say there were sections of the real estate contract they did not fully understand when they bought or sold a home.
More than one-third of Ontario homeowners believe — incorrectly — that a buyer or seller has a trial period in which to cancel a real estate contract after it is signed. Another third say they don’t know.
It’s good to see RECO try to educate the public on how the real estate law works for them and against them when making one of the biggest transactions in their lives.
The lesson: don’t rely on a real estate agent to protect your interests. Do your own research and be prepared
A home inspection may provide missing details about an estate-sale property.
By:Joseph RicherRegistrar,Published on Fri Oct 10 2014
I’ve found a great home that I want to buy but it’s being sold as part of an estate. How will that impact the purchase?
Typically, when you see a home listed for sale, the seller is the homeowner. But if the homeowner is deceased, the seller is the estate and is represented by the person in charge of administering the estate — the estate trusteea.
The basics of buying a home that is part of an estate sale are generally similar to buying any other resale home. But there are a couple of considerations you should be aware of.
First, your closing date might be a moving target. Since the home’s title is in the name of the deceased homeowner, the trustee may need to get permission from the courts to sell the home on behalf of the estate. This process is called probate. Sometimes this will already have been done before the property is listed.
Since the home may be listed for sale before probate is granted, the seller may ask for a closing date that is several months away, or may have a clause that allows the closing date to be delayed if probate isn’t granted in time.
As a buyer, you need to be aware of your own timelines and needs:
Have you already sold your existing home or given notice to your landlord?
If so, do you have a back-up plan if the closing date gets postponed?
How much flexibility do you have?
One potential solution is to add a clause to your offer stating that, if probate hasn’t been received in time for the sale to close on the selected date, you will be able to take occupancy of the home until the sale can close. Essentially, this means you will be renting the home from the seller at a particular price, until probate is granted and the sale is able to close. While this may not be appropriate in all circumstances, it’s something to discuss with your lawyer if you are considering it.
In addition to working with your registered real estate professional, you should seek the advice of a real estate lawyer when you draft your offer to ensure the appropriate terms and conditions are added.
The second consideration you should be aware of is that less information may be available about the state of the home than with a typical resale home. Since the homeowner is no longer around to offer insights about the age or condition of the home’s systems, such as the furnace, roof or plumbing, or the home’s history in terms of renovations, damage, fires, etc., a home inspection is a smart move.
Be sure to seek out a qualified home inspector to help you assess the condition of the home and its systems, and identify potential problems. Consider referring back to my two-part series on home inspections for more information. The articles, available on the Star’s website, were published July 18 and July 25.
Aside from these considerations, you’ll want to take the same steps as you would with any other property. Think about whether the home meets your needs and whether it fits within your budget.
As always, be sure to ask questions if something is unclear and get any details you discuss in writing.
Joseph Richer is registrar of the Real Estate Council of Ontario (RECO). He oversees and enforces all rules governing real estate professionals in Ontario. Email questions to firstname.lastname@example.org .
Which reno projects reap the richest rewards (and what does your neighbor's home have to do with it)?
You've just finished renovating your home from top to bottom. That means attic, basement, and every square inch of living space in between.
Okay, so your place now looks like the Palace of Versailles - but you also had about as much work done to it as the Queen did Buckingham Palace (and that little project just about bankrupt her!).
Sure, some of those expenses may well pay for themselves come resale time, but not all. You knew that - and that’s why you shied away from the skylight installation, the pool, and the new asphalt driveway.
But there’s more to it than that.
The Appraisal Institute of Canada compiles a report each year based on findings from a survey of its members to determine which reno projects offer the highest return on investment.
Perhaps the most significant findings from the survey are:
The expense you put forth for the project must be relative to the price of your home (for instance, a $30,000 improvement doesn’t belong in a $100,000 property).
The projects you undertake mustn't separate the home from other homes in the neighborhood too drastically.
You’ll recover a higher return from renovations if the value of your home is below the neighborhood average; those same renovations will yield significantly less if the value of your home exceeds the average.
The smartest improvements reside in a kitchen update worthy of the Duchess of Cambridge, a remodeled bathroom, and an interior paint job. These upgrades are the only ones that could potentially pay entirely for themselves. That roof replacement and new furnace or heating system might encourage up to 80 percent in recovered funds. Doors, windows, and a new deck may fetch back 75 percent.
But your wood fence, interlocking paving stones (cute - but not all that investment-smart), and unnecessary landscaping costs (a bush shaped like a deer - really?), could end up setting you back 75 percent in unrecovered costs.
These findings might be of particular note if you’re planning to spend an average of $21,000 or more on your home in the year following the purchase of your house - and many Canadians do, according to data by Canada Mortgage and Housing Corporation.
Why so much? One possible reason: Home renovations are in vogue. Of course, all you’d have to do is take one glance at television programming these days to arrive at that conclusion.
Where there’s smoke...
A recent Maclean's article that highlights the "dark side" of home renovations certainly supports the observation that home renovations are sweeping the nation in ever-growing numbers.
Shows like Property Brothers, Love it or List it, and Holmes on Homes are just a few that provide evidence of the growing trend: Home renovations have climbed 7 percent every single year since 2003. Roughly half that growth might be due to a “white-hot housing market,” according to Maclean’s. Economists have even given it its own name: the Wealth Effect.
For every $1 increase in wealth a homeowner makes due to real estate appreciation, notes TD, the homeowner doles out a nickel on home improvements. A Houzz survey further found that where just 14 percent of Canadians said they would take out a line of credit to finance their home renovation costs in 2013, a whopping 34 percent said the same a year later.
Okay, we get it - home remodeling is the new black. Still, don't get sucked into a black hole of debt over it.
One final tip
Keep your eyes on the prize and don’t get too consumed with the idea of transforming your home from top to bottom. Take it one project at a time and always keep the cost-to-value ratio in mind. Follow that advice and you’ll have both your palace and your bankbook looking tip-top in no time.
brampton homes for sale, toronto homes for sale, bolton homes for sale. www.bramptonTorontoHomes.com
There’s little hope of changing your offer once it’s accepted.
By:Joseph RicherRegistrar,Published on Fri Sep 12 2014
When buying or selling a home, the importance of doing your research before making decisions is critical. Understanding what you want, and what you can expect during the purchase or sale process, means fewer headaches when you go to close the deal — and no unfortunate surprises after you have signed on the dotted line.
Here are two situations that highlight the need to be informed:
I forgot to include a condition in my offer to buy a home. Can I add it after my offer has been accepted?
Any offer that has been accepted is considered a binding contract. Therefore, you cannot add or alter the terms or conditions after an offer has been accepted — unless the other party consents to these changes. This would typically be done through the use of an amendment form.
However, you should know that the seller may not consent to new conditions, especially if they conflict with their plans or are in any way detrimental to them.
That’s why it’s important to do your due diligence in advance. Talk to your registered real estate professional and make sure you include all of the conditions that are important to you in the offer you submit.
Client vs customer: What is the difference and why does it matter when you’re buying or selling a home?
Buyers and sellers may enter into one of two types of agreements with a brokerage: a representation agreement for clients, or a customer service agreement. Both are considered legally binding.
There are two big differences between the brokerage’s obligations to a client versus a customer.
If you are a client, the brokerage has an important obligation to you called fiduciary duty, and must promote and protect your best interests in the real estate transaction. If you are a customer, the brokerage does not have that obligation, but must treat you with fairness, honesty and integrity, and provide you with conscientious and competent service.
If you are a client looking to purchase a property, under a legislated code of ethics, the salesperson must take reasonable steps to determine, and then disclose to you, all material facts about the property.
If you are a customer, however, the salesperson only has to disclose to you the material facts that he or she already knows or ought to know, and they are not required to take any further steps.
There are a couple of other points to consider when deciding whether to become a client or a customer of a brokerage, especially if you are a seller.
A real estate agent must convey all written offers to a seller who is their client — unless otherwise specified in writing. A salesperson working with you as a customer, however, is not obliged to convey offers to you — unless your agreement provides for the brokerage to receive written offers on your behalf. In that situation, the buyer’s representative would have to contact you directly.
With all of these points in mind, your decision boils down to a basic question when considering the client versus customer relationship: What are my needs and which relationship best meets them?
If you have knowledge and a comfort level with buying and selling real estate, then perhaps the customer relationship is sufficient for your needs. If your knowledge and experience is limited, then the client relationship is likely your better option.
But one important factor remains the same for both clients and customers: No matter what you decide, remember to do your homework in advance.
Before you sign your agreement with the brokerage, make sure you know what you want, the services you expect to receive. For sellers, this could include staging, open houses, advertising and a marketing plan. For buyers, this could include must-have features, potential deal breakers, amenities and geographic considerations.
In both cases, make sure that it’s clear who will be paying for these additional services.
Be informed. Determine what you want and what you need. Understand your rights and obligations under your relationship with the sales representative.
If you prepare well in advance, this will help ensure there are no surprises during the buying or selling process.
Joseph Richer is registrar of the Real Estate Council of Ontario (RECO). He oversees and enforces all rules governing real estate professionals in Ontario. on YouTube at http://www.youtube.com/RECOhelps .
About 20 percent of households who would benefit from refinancing are not doing it — and they could be losing out on lessening their mortgage payments by thousands of dollars over the life of the loan, according to a new report from the National Bureau of Economic Research.
"Despite the large stakes, anecdotal evidence suggests that many households may fail to refinance when they otherwise should," according to the report. "Failing to refinance is puzzling due to the large financial incentives involved."In analyzing a large random sample of outstanding mortgages from December 2010, researchers found that the median household could save $160 per month over the remaining life of the loan, amounting to a total savings of about $11,500.
The report found that borrowers may fail to refinance because they are unable to calculate the full financial benefit to them, they fail to see the benefits over time, or the high amount of upfront costs may deter them.
"Our results suggest the presence of information barriers regarding the potential benefits and costs of refinancing," according to the NBER report. "Expanding and developing partnerships with certified housing counseling agencies to offer more targeted and in-depth workshops and counseling surrounding the refinancing decision is a potential direction for policy to alleviate these barriers for the population most in need of financial education."