For those of you who are thinking of buying Real Estate in BC, at some point you will come across the phrases ' Buyers Agency' or 'Exclusive Buyers Agency'.
The following information is provided as a guide to help you understand these terms, and what you should expect from your Agent.
Disclosing the types of Agency Representation
The Okanagan Real Estate Board (OMREB) requires a Disclosure of Agency (a Working with a Realtor form, which is signed by the Buyer and the Agent) by which every registered Agent is required to explain their legal relationship with a Buyer at first substantive contact i.e. when you start discussing information with that Agent which would compromise your bargaining position in any way. The Agent should immediately explain 'Agency' and give you a choice in how you wish to proceed.
Any licensed Real Estate Agent in British Columbia can legally act as a Buyer’s Agent, while working for a brokerage focused on representing Sellers’ Listings. You should expect your Agent to ask you to sign an acknowledgement to this effect.
Why choose Exclusive Buyer’s Agency ?
While any Agent can and will arrange property showings, suggest sources of financing, provide accurate information, prepare contracts and agreements, and assist you through the entire process, an Exclusive Buyer’s Agent can perform services for you that many Seller’s Agents can’t.
An Exclusive Buyer’s Agent can -:
1. Provide an unbiased opinion on each property- remember a Listing Agent has a fiduciary duty (defined as - a legal relationship of confidence or trust regarding the management of money or property between two or more parties), to the Seller, and is therefore unable to discuss such sensitive issues as price.
2. Recommend and negotiate the best price and terms for you alone.
3. Ensure that the conditions placed in a Contract of Purchase and Sale protect you, rather than the seller.
4. Keep confidential any information that could compromise your negotiating position.
To work with your Agent and appoint them as an Exclusive Buyers Agent, you will need to sit down with them and discuss the 'terms' of this arrangement, which is usually done in the form of a standard written contract ( in the same way as you would sign a Listing Contract when you are listing your property with an Agent).
What if the house you want is listed by the same Agent or Real Estate Company that is representing you as Buyer’s Agent?
In that case, you can agree to 'Dual Agency', in which case the agent represents both the Buyer and the Seller, and has to be very careful not to breach the confidentiality of either party, or you can use an Agent from an alternative Real Estate Company.
Who pays the Real Estate Agents commission ?
In most cases, the Seller is going to pay a percentage of the sale price to the Listing Brokerage, as a commission fee. ( There are cases where the Buyer may agree to pay part of the commission under their Exclusive Buyers Agency agreement with their Buyers Agent).
Most Sellers agree to allow the Listing Agency to split the commission with the Buyer’s Agency, which means the Seller is paying the Buyer’s Agent to represent the Buyer’s interests.
Why would a Seller agree to allow a proportion of the commission to go to a Buyer’s Agent, who is representing a Buyer against the Seller? It is simple - the seller wants to sell! But it is really the transaction that funds the commission? Yes, the Seller is paying the commission, but without the Buyer’s money there would be no sale. The whole idea is to be fair and reasonable.If the Buyer is bringing the money to the table to buy the house, it is only fair that the Buyer has full representation.
I hope this guide helps?
If you have any further questions, on this or any other Real Estate topic, please do not hesitate to contact me.
Cell 250 864 1707
#14 – 1470 Harvey Ave, Kelowna,
British Columbia, V1Y 9K8