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Posted in: Buying a Home In Calgary
In most transactions, sellers are represented by a listing agent who manages these details for them and acts in their best interests (not only an individual agent, but the entire brokerage they represent - including ALL their agents represent the sellers' interests). As a buyer, don’t you also want someone to provide complete and honest representation in your real estate transaction? Real estate buyer’s agents are responsible for protecting the best interests of their clients—buyers like you—and can guide you through every step of the process. But the first step, and maybe the most important one, is finding a qualified buyer’s representative.
Defined most simply, a buyer’s representative (or buyer’s agent) is an advocate for the buyer—not the seller—in a real estate transaction. Real estate laws and regulations vary from province to province, but buyer’s representatives usually owe full fiduciary (legal) duties as they do here in Alberta, including loyalty and confidentiality, to their buyer-clients and must keep their clients’ best interests in mind throughout the entire transaction.
Most likely, the seller of the property you buy will be represented by a listing agent who provides expertise throughout the transaction to the seller. They could also be known as the "selling agent" since they're the one doing "the selling." Don’t you want to the same level of service as a buyer? A buyer’s representative can provide the expertise you need throughout the entire transaction, greatly improving your buying experience and potential results. Besides, retaining a buyer’s representative seldom adds any expense to your transaction.
Not all buyer’s representatives are equal. All REALTORS® (members of the Canadian Association of REALTORS®, or CREA; as well as their US counterparts, members of the National Association of REALTORS®, or NAR) must subscribe to a strict Code of Ethics, which helps ensure that you will be treated honestly. But a REALTOR® with the ABR® designation has gone a step further, by completing Accredited Buyer’s Representative (ABR®) training, specialized education offered by the Real Estate Buyer’s Agent Council (REBAC). In addition to knowing the dynamics of the local market, REALTORS® with the ABR® designation understand the special needs of buyers. They have additional knowledge and experience that takes them a step beyond an agent who only concentrates on listing property for sellers. An ABR® can provide you with valued assistance throughout the transaction and help you make informed decisions that will lead to a successful home purchase. To find a REALTOR® in your area who holds the ABR® designation, visit REBAC.net and look under the International members.
In real estate transactions, buyer-clients are entitled to a higher level of service than buyer-customers. While details vary by province, becoming a client typically involves signing a buyer representation agreement (or buyer agency agreement) with a buyer’s representative (or simply buyer’s rep), who then owes you fiduciary duties. This means that your buyer’s rep is expected to protect your confidential information and act in your best interests, while also adhering to very specific responsibilities, obligations, and high standards of good faith and loyalty. For example, if you’re a client, a buyer’s agent will seek to negotiate the most favorable transaction terms for you, and will not disclose any facts about your situation that could hurt your negotiating position. If, however, you are only a customer, an agent may not be in a position to answer even basic questions, such as “Why are they selling?” or “Is this home priced competitively?” This is because they are acting instead on behalf of the seller. Not every province requires a signed buyer representation agreement to create an agency relationship. In some cases, an agency relationship can be formed if both parties simply behave as if one exists. Ask your buyer’s rep to explain the details of agency that apply in your province, as well as their personal representation agreement. Knowing your agent’s responsibilities and obligations to you, and yours to them, helps to avoid any potential misunderstandings.
To help ensure a successful home purchase, it’s important to first choose a buyer’s rep. Narrowing your search to ABR®-designated agents is a good first step. Here are some of the most important issues to consider and questions to ask when interviewing prospective buyer’s reps.
Experience and Credentials
How long have you been a buyer’s agent? How long have you been an ABR®? What other real estate designations or credentials do you currently hold? Have you attained your broker's designation yet or are do you still hold only the initial license.
Can you share the names and contact details for three past buyer-clients who can provide references?
What are your areas of specialized knowledge? Which types of housing or neighbourhoods do you know best?
What representation choices do I have as a buyer? What is meant by fiduciary duties?
Please explain how you will assist me at each stage of the transaction. Do you have a written buyer representation agreement that details our obligations to each other?
How will you be compensated? If I hire you as my buyer’s agent will I be subjected to any additional costs in my transaction?
Do you have full access to the Multiple Listing Service (MLS® System database)? Will you try to find suitable properties beyond the MLS® System database?
Will you personally handle all aspects of my transaction, or will I be working through assistants? Who will explain and complete the various forms, agreements, and steps required to reach closing?
Will you counsel me on a negotiating strategy and appropriate contingencies? How will you present my offer to the seller?
Will you provide guidance on affordability, mortgage options, and choosing a lender? Why should I consider a mortgage pre-qualification or pre-approval?
Can you supply referrals for providers of other services related to my transaction, including mortgage brokers, home inspectors, real estate lawyers, appraisers, condominium document reviews, surveyors, movers and other service providers?
Many buyers wonder if they’ll pay more if they use a buyer’s rep. In almost every case, home sellers have already agreed to pay a commission to the buyer’s agent. Although buyers seldom pay real estate commissions, this is an important detail you should discuss with your ABR® and clarify in the representation agreement.