WORKING WITH A REALTOR®

Buying property can be a very exciting but also a stressful experience. For most buyers the purchase of a property is the biggest expense they will make. Add to the financial concerns the emotional involvement with buying and selling property and it can get a little overwhelming at times. Working with an experienced Real Estate Agent who is familiar with the community can ease the stress. Real Estate Agents are familiar with the legal considerations as well as the protocol of purchasing properties. They are familiar with the market and should be familiar with neighbourhood issues so they can guide buyers with the not so obvious concerns when considering a property. They can guide buyers with suggestions on what to put in an offer and direct them to the professionals who can assist with subject removals and completion of the purchase. They can guide sellers with current market information and current market value of the seller’s property and once listed they can insure the property gets the most advertising coverage possible. Many sellers do not want to be present during the showing of their home nor are they experienced in pre qualifying interested buyers and they rely on their Real Estate Agent handle these details as well as the marketing of the property. Most buyers and sellers prefer to enlist the services of a professional to assist them with the buying and selling process however they may not be familiar with the details of the client Realtor relationship. Here are a few of the most common questions regarding how Realtors work:

How do Real Estate Agents get paid?

Most Real Estate Agents work on a commission only basis.

This means if they don’t sell anything they don’t get paid. They do not get paid for their time spent with buyers until a buyer actually buys a property.

Who pays for Real Estate Agents expenses?

Real Estate Agents working on a commission basis cover all their expenses. This includes advertising such as, business cards, car signs, for sale signs, print and Internet advertising. Also: car expenses, insurance, licensing, real estate board fees, office expenses, client gifts and any other business related expense.

Does the Real Estate Agent get all the commission?

Commissions are always payable to the Real Estate Agent's Brokerage. The commission split within the office is determined by office policy and an agreement between the Real Estate Agent and their Brokerage.

How does the commission work? 

Sellers agree to pay a commission upon the successful completion of the sale of their property. If the property is listed MLS there will be a selling side of the commission for the Real Estate Agent working with the buyer and a listing side of the commission for the Real Estate Agent working with the seller. It is traditional but not mandatory that the commission be spilt 50/50.

What if the buyer is working with the agent who has the listing?

This is called a Limited Dual Agency relationship. Both parties must agree to this relationship in writing and understand the implications of the Real Estate Agent representing both parties. The limits of this relationship include confidentiality, which means the Real Estate Agent cannot discuss the bottom line of either party and in essence becomes a facilitator rather than a negotiator. There are advantages and disadvantages to working under a Limited Dual Agency relationship. It requires a lot of trust on the part of all parties and a willingness to work together to achieve a common goal. The listing agent knows the property and the sellers better than other agents and can therefore show the property to full advantage and guide buyers on seller wants and needs beyond price. There is more to an offer than just the price and often a successful outcome is reached when other concerns are addressed in the offer.

What is Exclusive Buyer Agency?

You may choose to enter into an Exclusive Buyer Agency relationship with your Real Estate Agent. You can formally enter into this agreement by signing a contract laying out the terms of your relationship. In this situation you agree to work with this Real Estate Agent for the term of the agreement and the Realtor agrees to work on your behalf in the purchase of a property. Should you wish to purchase a property listed with the Real Estate Agent you will have to change this agreement to a Limited Dual Agency Agreement.

Who ‘owns’ the listings?

When a property is listed it is actually listed with the Real Estate Company (the Brokerage) the Real Estate Agent works for. Although your Real Estate Agent is the listing agent the listing agreement is with the Brokerage.

What is MLS?

The Multiple Listing Service® or MLS® is a member based service, paid for by the REALTOR® members of the local real estate Board. The MLS® mark symbolizes the cooperation among REALTORS® to affect the purchase and sale of real estate, and is much more than a database of property information. It is the local real estate Board that actually administers and operates the local MLS® system. The Canadian Real Estate Association owns the trademark, and licences its use to Boards and Associations across Canada.

If you are selling a property, listing with a REALTOR® who uses MLS® means your property gets maximum marketing exposure to all other members of the local Board. You'll have REALTORS® everywhere trying to find a buyer for your property. It is the MLS® computer system that will provide other members of the real estate Board with detailed information about your property.

If you are buying a property, MLS® is a valuable research tool for your REALTOR®. They'll input the criteria you want and generate a list of all properties that meet your needs. These homes might be listed by other REALTORS® from five or ten other companies – to your REALTOR®, it doesn't matter. Their goal is to help you find the property you want. MLS® supplements the REALTOR®'s in-depth knowledge of the neighbourhood and current market conditions to help you make a wise buying decision.

Can a buyer work with more than one Real Estate Agent at a time?

Yes, however it is wiser to build up a good working relationship with one Real Estate Agent and have then help you view all the properties you are interested in. Conflict can occur between Real Estate Agents if a buyer views a property with one Real Estate Agent then asks another to write up the offer. Keep in mind most Real Estate Agent work on a commission basis only and if a Real Estate Agent takes the time to show you around to various properties and try to assist you in finding the right property then it is expected if you like one of the properties you viewed you will ask the Real Estate Agent who showed you that property to write up the offer.

What about Open Houses?

If you have built up a relationship with one Real Estate Agent you can attend open houses without your Real Estate Agent with you. You just need to advise the Real Estate Agent on duty at the open house you are working with someone and want to view the open house. If you like the home your Real Estate Agent can bring you back to view again and write an offer on your behalf. You are not obligated to work with the Real Estate Agent showing the open house.

What about For Sale by Owner properties?

Some property owners trying to sell without the assistance of a Real Estate Agent will co operate with agents. If a buyer finds a property they want to buy that is FSBO they would enter into an Exclusive Buyer Agency Agreement with their Real Estate Agent and the seller would have no agency representation. The Real Estate Agent would represent the buyer in the transaction and would guide the buyer on fair market value and concerns the buyer should have about the property. The buyer would pay the Real Estate Agents commission and details would be worked out in the Exclusive Buyer Agency Agreement.

WORKING WITH A REALTOR® (designated agency) brochure

When working with a Real Estate Agent in BC this brochure is handed out to all clients to help explain about agency relationships. The brochure was created by BC Real Estate Association and is a helpful guide to Working With a REALTOR®. Your Real Estate Agent will ask you to sign a copy of this brochure indicating you have received the brochure and discussed agency relationship.

I look forward to discussing agency representation and other real estate topics with you; please contact me at my home office on Cortes Island.

Phone/Fax 250-935-6716

Email:frances@cortesislandrealestate.com

Frances Guthrie

office: 250-935-6716

email: frances@cortesislandrealestate.com

Frances Guthrie