A new rule covering real estate agents (now called associates) can improve clarity for home buyers about the duties to them of their associate, and explains how the associate will be paid. In the past some home shoppers have wondered how their associate (usually a Realtor) could serve their exclusive buyer's interests when the Realtor's pay came from the home seller.
As of October 2007 the Real Estate Council of Alberta ("RECA") recommends and will soon require that all associates (most are members of the Canadian Real Estate Association, and thus are Realtors) sign an exclusive buyer-service or brokerage agreement with people shopping for a home, be that a house or a condo apartment or townhouse. The agreement is to detail what services the Realtor will provide, how the Realtor will be paid, and the duties of both parties to each other.
The goal is to create clarity in real estate relationships, and to avoid misunderstandings, disappointments or feelings of obligation where there might be none. The written service agreement must also say what degree of commitment the home shopper and the Realtor have to each other, and how that commitment can be changed or be ended. Add this written agreement to an explanation of agency duties, and home buyers today will have a clear picture of the services they are contracting for from a Realtor.
An interesting wrinkle is that the regulatory agency, RECA, knows that some home shoppers don't want a service contract with any particular real estate associate or Realtor, so gives them the right to opt out. Just scratch out the form and sign, or write in that you reject its use and sign that to put the buyer-service agreement aside. The bottom line is always to serve the education and consumer choice of the public. I can live with that.
In fact, I can live with that so well that I briefly used buyer-service agreements in my real estate work eight years ago. While then people often didn't understand the goal, today the new regulation (Rule 43 under Alberta's Real Estate Act) demands this clarity. The public today is also better informed. But while home shoppers can choose to shop with a Realtor without a service agreement, I and many other in-demand Realtors will not work with people who decline such a mutual commitment. In short, if a person won't commit to work with me toward their purchase, I can't commit to give them my time and the use of my car in shopping for a future home.
The new rules governing the home buyer and their licensed real estate representative parallel the clarity that home sellers and their agents have had for the past 100 years with their "listing" or seller-brokerage agreements. A Realtor can't spend time and money marketing a home to find a buyer without a written understanding of the fee that she or he and their brokerage will earn for the work. The same now goes for Realtors working for a prospective home buyer, unless the home shopper prefers to search out a Realtor with so little business the he or she will gladly work without a service agreement.
If you'll soon shop for a home and retain a Realtor, perhaps a condo-specialist Realtor, you could encounter different versions of buyer-service agreements. The regulator authority has created a standardized form, and the Alberta Real Estate Association provides Realtors with an easier-to-read but still quite legalistic form. For my part I read Rule 43 and drafted my own buyer-service agreement that covers all the points in layman's language, and which requires only a moral commitment from clients; there's no money up front and no continuing obligation, with verbal notice rather than written notice for termination. I go by the KISS rule.
The goals are the same: clarity about who is paying who else how much to perform what professional services within what time frame with what degree of obligation by each to the other. 'Want to read more and from the horse's mouth? Check out the web site of the Real Estate Council of Alberta: www.reca.ca.
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