I often lament how the real estate industry seems impervious to innovation compared to the rest of the economy, but this year we have seen some real change.
The Real Estate Council of Ontario has finally enacted new regulations surrounding agency representation in an effort to better clarify and outline for the consumer; when, what, why, and how you can form a working relationship with both an agent and/or a brokerage.
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What’s Different?
Agents are now required to provide a “Reco Information Guide” to any prospective client prior to providing any service or assistance, which has helped to add a lot more clarity and transparency around just how the industry works for the public.
There have also been some changes made around the types of representation agreements consumers can create with an agent or brokerage and some new disclosure regulations around offers which have further empowered the consumer within the industry.
Beyond having this added disclosure process for agents to educate the consumer, the two biggest changes within the new regulations are; 1) giving the consumer the ability to self represent and/or 2) create a designated representation agreement with a specific agent rather than that agents’ brokerage.
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How Does it Impact Buyers and Buyer’s Agents?
This gives both the client and agent both more clarity and control, but it has also caused some to reexamine the need and role of an agent within the transaction. I’ve had many inquires from clients this year around this topic and I’ve found that generally, the public doesn’t know or see, just how much work (a good) agent performs to service their clients.
This is perhaps less true on the listing side of the business, as there’s a lot of tangible, quantifiable work that both clients and the public can easily see within our listings. I have an entire team of handymen, painters, stagers, and photographers behind me when I enter into a listing agreement, so it’s easy to see effort here. When we list a property for sale and it looks like a showcase home, it would be hard not to assume there was a lot of work involved, but it’s also easy to look past all of the other intangible work that is necessary to sell and close that listing.
And similarly, when it comes to buyer representation it can be easy for the uninitiated to overlook just exactly what their agent does, and how crucial they can be to both their budget and general well being.
What Does Reco Say About Working with a Buyer’s Agent?
The Reco Information Guide outlines the risks of entering into a real estate transaction without representation as follows:
“If you choose not to work with a real estate agent, it will be your responsibility to look after your own best interests and protect yourself. This may include things like:
- making inquiries about zoning, permitted property use, or any other aspect of the property
- determining what you believe to be the value of the property you are buying or selling;
- determining how much you are willing to offer or accept;
- navigating competing offer situations;
- deciding what terms you want to include in an offer or agreement of purchase and sale;
- preparing all documents.
And the common retort here is something like, “anyone can open a door to a listing and house sigma can tell me how much to pay… why do I need an agent on the buy side? But there’s so much more missing here and if you are still asking just why you need a buyer representative, let me break it down further for you.
How Can Buyer’s Agents Protect You?
Beyond just buying a lemon or over paying for the largest purchase you’ll likely ever make, which alone makes the case to have knowledgeable and professional representation, there’s a lot more to the buy side than opening doors.
Do you have more questions about buying a home in Toronto? Read these posts next:
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- How to Choose the Right Type of Mortgage
How Toronto Realty Group Helps Buyers
Our typical process in a nutshell begins with a buyer consultation which not only helps to better define a buyers needs, wants, and objectives but sets up the foundation for success with connections to strong financing and legal advice.
From here we start into the property search and showing phase which involves searching for both on and off market properties that fit a buyers criteria and coordinating showings of any properties in a convenient and timely manner… in this market this step must often be done quickly before any opportunity is scooped up by someone else!
This is also the phase where we are really able to educate and inform home buyers on just about everything from pricing, types of properties, neighbourhoods and schools, construction and renovations, etc. The list goes on and on but this is usually the stage where many home buyers start to really understand just how much they didn’t know..
This process is iterative and the timeline depends on the client, but when the right opportunity does present itself, we enter into the offer phase, which not only consists of the negotiation aspect of the process which is crucial to any clients’ bottom line, but also requires a level of due diligence to make sure you avoid any number of pitfalls.
And beyond any successful offer there is a host of post sale support including the fulfillment of all conditions and/or waivers within prescribed deadlines, liaising with mortgage brokers in order to facilitate any mortgage commitments, providing solicitors with any and all information to ensure a smooth closing, filing all the necessary paper work with both our friends at the CRA and FINTRAC and of course getting our clients ready for their move and settled into their new home.
This is of course, just the tip of the iceberg, but on average the entire process can take between three to six months and involves a lot of time together, so not only should you make sure you have strong representation on buy side, you should also try and find an agent you’ll enjoy working with.
Looking for answers to your real estate questions? Get in touch with us directly by calling 416.642.2660 or emailing us at admin@torontorealtygroup.com.
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