This week?s article will focus on Real Estate Licensees or your Realtor. I have found talking with both my clients and the general public that there is a lack of knowledge regarding Realtors, who they work for and their role in a Real Estate transaction. Hopefully I will shed some light on the topic.
First of all it is important to understand that in the Province of BC, the person you hire to assist you in purchasing a property must be licensed under the provincial Real Estate Services Act.
In every real estate transaction there is a seller and a buyer. A real estate licensee may be employed as an agent for the seller, as an agent for the buyer, or both. Realtors should be providing you with full disclosure about the nature of their relationship with you. Real estate licensees work with a legal relationship called agency. The agency relationship exists between you the principal, and the brokerage, the company who the licensee is licensed. When a seller employs a real estate licensee to help sell their property, the licensee becomes the agent of the seller. As a buyer, you may select a Realtor of your choice to act as your agent. It is in your best interest to obtain the licensee?s consent to represent you. As a buyer, you become the principal and the licensee becomes your agent. Brokerages and their licensees are legally obligated to protect and promote the interests of their principals as they would their own. A brokerage has the following duties:
*undivided loyalty. The brokerage must protect the principal?s negotiating position at all times, and disclose all known facts which may affect or influence the principal?s decision.
*to obey all lawful instructions of the principal.
*an obligation to keep the confidences of the principal.
*to exercise reasonable care and skill in performing all assigned duties.
*account for all money and property placed in a brokerage?s hands while acting for the principal.
You can expect competent service from your brokerage, knowing that the company is bound by ethics and the law to be honest and thorough in representing a property listed for sale. Both the buyer and seller may be represented by their own brokerages in a single transaction.
Dual Agency, occurs when a brokerage is representing both the buyer and the seller in the same transaction. Since the brokerage has promised a duty of confidentiality, loyalty and full disclosure to both parties, it is necessary to limit these duties in this situation, as long as both parties consent. This relationship involves the following limitations:
a) the brokerage will deal with the buyer and seller impartially.
B) the brokerage will have a duty of disclosure to both the buyer and the seller except in the following regard: The brokerage will not disclose that the buyer is willing to pay a price or agree to terms other than those contained in the offer, or that the seller is willing to accept a price or terms other than those contained in the listing. The brokerage will not disclose the motivation of the buyer to buy or the seller to sell unless authorized by the buyer or the seller. The brokerage will not disclose the personal information about either the buyer or the seller unless authorized in writing. The brokerage will disclose to the buyer defects about the physical condition of the property known to the brokerage.
No agency relationship you may choose to use the services of a licensee without having any kind of agency relationship. This may occur, when you are being shown a property by the seller?s licensee. The licensee you choose to work with in this manner has a legal and ethical duty to provide you with accurate, honest answers to your questions and can provide the following:
*Explain real estate terms and practices
*Provide and explain forms used
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*Assist you in screening and viewing properties *Inform you of lenders and their policies *Identify and estimate costs involved in a transaction,
*Assist you in establishing your range of affordability, *Prepare offers or counter-offers at your direction, *Present all offers promptly. A licensee who is not your agent cannot: *Recommend or suggest a price, *Negotiate on your behalf, *Inform you of his or her principal?s bottom line, *Disclose any confidential information about his or her principal unless otherwise authorized. You should not provide a licensee who is not your agent with any information that you would not provide directly to his or her principal. It is possible to enjoy the benefits of a licensee?s knowledge and experience, regardless of who that licensee is representing. As a buyer you can expect licensees to provide you with such services as: *Helping you to clarify the type of property you need and can afford,*Providing information about available properties and sources of financing, * Arranging appointments to view available properties, *Provide accurate answers to any questions you may have about a specific property you are considering,* Explaining the forms used in a real estate transaction and assisting you in making a written offer to purchase, *Presenting your written offer to the seller, *Familiarizing you with the steps you must take to complete the purchase after the seller accepts your offer.
Important to Remember if the licensee you are working with is also the seller?s agent, any information you give to him or her must be passed on to the seller. It is in your best interest to discuss with that licensee only what you would discuss with the seller in person.