Residential Buyer Brokerage Agreement
Things in the Calgary real estate landscape (the Alberta real estate actually) are about to change. In 2014 there will be some new rules introduced that Alberta REALTORS® must follow. Specifically, in the way REALTORS® work with Buyers. Until now, when you called a REALTOR® to help you purchase a home, you met with the REALTOR®, discussed your needs and wants and away you went. That is completely different than if you wanted to sell a property. When selling, you would sign a "Residential Seller Brokerage Agreement" or "Listing Contract". But, there was no "Residential Buyer Brokerage Agreement". That is about to change.
Sometime in 2014 RECA (Real Estate Council of Alberta) will be introducing new rules mandating the use of a "Residential Buyer Brokerage Agreement" by all REALTORS® working with Buyers. What does this mean to you?
First of all it will bring clarity. It will define the roles and responsibilities of both the Buyer and the REALTOR®. Some of the highlights of the current incarnation of the agreement (real estate documents tend to change frequently) are:
- It identifies the parties including the Buyer(s), the Brokerage and the REALTOR®.
- It names the type of property and the market area.
- It specifies a commencement and end date of the agreement.
- It lays out the duties of the Brokerage and REALTOR® such as, agency, reasonable care and skill, disclosure issues, offers, counter offers and many other things.
- Privacy and distribution of Buyer's information.
- Remuneration. How much will the REALTOR be paid, when, how and by whom.
- The duties of the Buyer.
- Additional terms, warranties etc.
- Methods of ending the agreement.
- Representative Capacity, Definitions and other legal concepts.
What does all this mean to you, the Buyer? For the most part, things will remain the same. REALTORS® are still bound by the Real Estate Act, RECA and the rules and regulations and the Code of Ethics. What has changed is that the duties of both parties will be more clearly defined as will the payment for the services rendered by the REALTOR®. It will take a while for the general public to get used to the idea, but in the end it will be beneficial for all parties to have a document that outlines where everyone stand in what is probably one of the biggest purchases the buyer will ever make.