Last spring, RECA - the Real Estate Council of Alberta - announced that they were moving ahead with their plans to introduce mandatory written service agreements for all real estate transactions in the province. Now, anyone who has used the services of a real estate agent is familiar with a written service agreement, it's your listing contract with the brokerage that has the sign on your lawn. What is different, is that starting on February 4th (Tuesday), you are going to have to have a similar type of agreement when you are working with an agent as a Buyer.
So what does that mean? We all know (and accept) that you need a contract in place if you are going to sell your house, the MLS permissions, the fees, the details of the chattels included, and all the other little details needed to sell the home are contained in a formal contract. In many ways, a written service agreement (WSA) with a Buyer acts in a similar manner. In the WSA you will find all the main components of a contract you would typically see in a listing contract - parties to the contract, property the contract pertains to (in this case the search criteria), time frame of the contract (it has to have an expiry date just like a listing contract), the services provided, the responsibilities of the parties, and the compensation for fulfilling the contract. Whoa! Says you ... compensation? So now as a Buyer I have to pay to find a house?
Well, simply put yes, you may have to. Typically, the fee paid to the agents involved in a real estate transaction have always been dealt within the listing contract. There has always been provisions in it to pay the Buyer's Brokerage a fee on the successful closing of the sale. An argument has always existed that an agent really isn't working for the Buyer if the Seller is paying them. Having separate agreements for both parties that outlines the responsibilities an agent has to them separately and delineating who pays for what really goes along way to helping create a better understanding of the loyalty commitments everyone has to one another. Here's the good news ... most MLS listings still have an offering from the Seller to the Buyer's brokerage and the contracts contain a clause that allows the fee you would be expected to pay to your agent to be offset by this. So you get the benefit of having a formal structured relationship contractually written up AND it still will not cost you much if anything!
There are a lot of different ways that the new WSA will benefit you as a buyer, taking the time to go over it with me before we go look at homes is a great way to sit down and talk about what you a re looking for in an agent and in a home.
Give me a call and I'll buy you a beverage and we can get started!
Larry
780-919-7653
lwestergard@remax.net
Hey Larry,
ReplyDeleteJust wanted to let you know you have your dates mixed up. There are new forms coming out tomorrow. However, written service agreements are only mandatory for Designated Agents (they always have been for DA). Everyone else has until July before they have to start using written service agreements for buyers.
Thanks,
Sara.
Liv Real Estate.
Hi Sara,
ReplyDeleteThanks for that you are correct. The issue is (in my mind) that the forms are out and the content is mandatory - so people will be using them. RECA says that there will be a period to allow real estate agents to get used to them and to get educated on them before the July date. The concern for me is that it is a lot like give someone a car to drive then telling them they will give them lessons in a few weeks or months later. The process is flawed and not consumer friendly as it should be under RECA's mandate.