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Last week I pointed out the first half of the value REALTORS® provide their clients. As I alluded to at the end of part 1, those values are all items that should steer you away from agents who are not REALTORS® and also provide you the expectations you should have when you are dealing with a REALTOR®. However, I also promised you that I would show you what REALTORS® can REALLY do for you when selling your home.

 

Keep in mind, these are the minimums. Each professional has a different “Schedule A” which will provide their own contractual commitment to you. Because this Schedule A is often written by someone else in their office (a broker, or someone in the head office), you will usually see most differences between different firms – with some additions made by the individual REALTOR®. Part of the reason I chose my brokerage was based on their strength of this document.

 

So, the question remains, how will a REALTOR® help me through the buying or selling process? Apart from what was already stated last week, what am I really paying for?

 

For starters, we are educators. I mean this is in the most positive sense of the word. We don’t just tell you what we think you should hear. We listen to your concerns, we ask questions to find out the details of your situation (financial, personal dynamics, expectations etc.), and we explain the real estate process based on your circumstances. This knowledge comes from experience, from research (I allot several hours of my work week solely to researching the market numbers), and business development courses which provide the most up to date information on real estate contracts, product knowledge, technology updates, and much more (which, of course, aren’t free).

 

Get your REALTOR® to explain how they came up with their market analysis of your property and make sure they provide you with their honest interpretation of the current market, specific to your area. If they don’t know what is going on in your neighbourhood, they shouldn’t sell your house. They should have a current statistic package provided to them by their real estate board, ask them what the numbers mean – their job is to understand these numbers and communicate their meaning to you.

 

While we are always enthusiastic to tell you about our marketing plans (the basics are usually the same, but the execution can differ quite radically), we MUST somehow put that marketing plan into our Schedule A so we can carry out those promises to you. There is no minimum requirement forcing a real estate professional to actually do any marketing, but at bare minimum, a REALTOR® puts your home on the MLS®. The Multiple Listing Service is NOT Realtor.ca, but is a powerful tool, now completely online, for REALTORS® to share legitimate, accurate, credible information, including the confidential information that is legally protected for your benefit. In a hot market, sometimes this is enough. I’ve seen places in Vancouver sell over asking price without even a picture or any marketing whatsoever. This is rare and not the case in most markets.

 

Get your REALTOR® to show you their detailed Schedule A. This should include marketing options such as print advertising, online advertising, social media, inter-office networking, agent tours, floor plans, virtual tours, open houses, professional signage, etc. The point is to get as many people looking at your property as possible. If there are 100 people looking at properties like yours, we want to get at least 10 in your home, and out of that 10, we want 1 good offer. Effective marketing will increase the odds.

 

Also in a REALTOR®’s Schedule A are other obligations, such as providing an accurate market analysis of your property (there is a bit of a game here – are you going to listen to an accurate assessment or are you going to go with the agent that gives you the highest list price? – more on that another week). A good REALTOR® will give a review of the property with suggestions and may even provide a home stager to come give a professional opinion. A REALTOR® will respond to buyer and REALTOR® inquiries with professionalism and show your home or arrange private showing times so that you don’t need to take time away from work. This itself is a major reason why homeowners who attempt to sell their home by themselves do not manage to sell, or do sell and end up losing money (more on this another week).

 

A good REALTOR® will also qualify their own buyers or keep in contact with a buyer’s REALTOR® to gauge the credibility behind an incoming offer – this can be very important when dealing with longer than average subject removals. Again, make sure all this, something similar is promised in your REALTOR®’s Schedule A – BEFORE LISTING YOUR PROPERTY!


Moving on, and this is where you’ll need to use your common sense, you need an agent who can negotiate. This doesn’t mean the agent is a slick talker. You want an agent who balances getting the deal done while maintaining the primacy of your interests. Selling your property for a discount price may get the deal done and the agent paid, but it may not be in your best interest to do so. So check your trust-o-meter going into business, because the negotiation is where your agent is your greatest asset. Your trusted REALTOR® will explain his/her opinion of an incoming offer, but must follow your instructions. Your REALTOR® can explain why he/she thinks a certain course of action will put you in the best position, but will follow your instruction and negotiate base on that decision. The best REALTORS® will find the data that will backup your decision to the best of their abilities.

 

Negotiation skills are directly tied to a REALTOR®’s ability to write a proper contract. Words mean [almost] nothing. If it isn’t in writing, it is nearly impossible to enforce. Make sure your REALTOR® explains what they are putting into that Addendum and why. Too many subjects may scare away the other party, too few may not protect you. Ambiguous terms may leave you (and your agent) liable for damages should something go wrong. Terms should be rock solid.

 

Finally, there are completion and post-completion services. Most offices that I know of streamline this process, but it is up to your REALTOR® do take the load off your back (which is where the industry has helped lower conveyancing costs), pass along the information required and address any possession problems that may arise, making sure that the contract is properly fulfilled. The REALTOR®’s liability is perpetual and they remain the conduit between all parties. You should never find yourself knocking on the door of the house you just sold 6 months ago with some sort of legal documentation.

 

Be protected, get the most money for your property, get a faster sale, use a REALTOR®.

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Real estate professionals do not live in a sheltered little bubble. While real estate cycles come and go, housing prices have risen astronomically in urban and suburban areas (rural Canada hasn’t done too shabby either). With that, the amount of money to be made in the real estate industry has been catching attention – especially during notable market spikes, such as in the early 90′s and again between 2002 and 2011. With this attention and focus on the money, a gross misunderstanding about what REALTORS® do has developed to the point that many wonder why they can’t just stick a sign in the ground and hire a lawyer to do the paperwork.

 

Under some circumstances, that might actually work – but the relatively low prices that lawyers currently charge for conveyancing are somewhat dependent on how the real estate trading industry has worked. I hope this two-part series explains this in a brief and concise way, because if certain lobbyists get their way and our industry is deregulated the way that some are suggesting, we will see more problems, more litigation, and less protection for home sellers & buyers.

 

As I have written about the importance of buyer agency before, and because buyer agency rarely costs the buyer anything, I will focus the majority of this article about selling property, although much can be said about buyer agency as well. I also won’t be speaking directly about average/common commission rates here – I’ll save that for another week.

 

The first and most important value REALTORS® provide to their clients is the legal obligation to protect their clients’ interests – even before their own. This means undivided loyalty, it means strict lawful obedience, it means confidentiality, it means competence, and it means accountability. Doubt it? If we don’t hold to these duties, we can be fined, suspended, and/or we can lose our license.

 

What else? How about strict licensing requirements that continues to uphold the interests of the public? We must renew our licenses every two years (considering the legalities of renewing your driver’s license – that’s not too bad). In order to renew, we must take mandatory professional development courses (these are NOT sales courses, they are meant to train us to write better contracts and understand the ever changing real estate rules). We must be also be law-abiding citizens to attain and renew our license.

 

REALTORS® are members of a professional organization that does its darnedest to keep us all in check. The purpose of this organization, represented by our local board (mine is the Fraser Valley Real Estate Board), is to provide leadership to its members, which really means using its resources to make sure its members are upholding the REALTOR® Code of Ethics. It is also part of the industry network that has spent decades building the Multiple Listing Service® (a separate entity from Realtor.ca) and upholding its integrity and credibility that some want to tear down and make into a Craigslist-like free-for-all and expect the sale of a house to be no different than a sale of a couch.

 

I mentioned this fabled REALTOR® Code of Ethics – this 20-page document and actually is extremely comprehensive in all matters of real estate services. Keep in mind, not all real estate agents are REALTORS®. While all licensed agents must meet the minimum standards of the Real Estate Services Act, if they are not a REALTOR®, they do not need to meet the much stricter Code of Ethics. Additionally, developers selling new real estate abide from different rules altogether (which is why it is good to bring your buyer’s agent with you even during the purchase of a new development).

 

Part of this REALTOR® Code of Ethics includes putting our promises into writing. When you agree to sell your property with a REALTOR®, the specific promises that REALTOR® makes is set out in their “Schedule A” – located at the back of the Multiple Listing Contract. If all it says is “I will sell you house”, guess what, that is a promise. If they fail to sell your house, they are in breach of contract. This, of course, is a silly promise. The same goes for an Exclusive Buyer’s Agency contract. This is what keeps REALTORS® accountable.

 

Now at this point you are wondering, this is all great and everything if I find a great REALTOR® who abides by all the rules, but so what? If I sell my own house, I don’t have to worry about all those things that a licensed professional should be doing anyway. What can you REALLY do for me?


Answers to come next week! Subscribe to my Fraser Valley Homes Journal to receive next week’s article in your inbox! And why not? I would totally subscribe to your newsletter if you told me about it!

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A couple of months ago I wrote about what legal obligations REALTORS® owe their clients: loyalty, obedience, confidentiality, competency, and accountability.

 

However, while REALTORS® do not owe the same obligations to the general public, we still have certain legal obligations. Let me first clarify what the difference in between a “client” and a “customer” in our world.

 

A client is someone who is in an agency relationship with their REALTOR®/Broker – this is usually through the signing of a Multiple Listing Contract or an Exclusive Buyer’s Agency Contract (although not necessarily – agency can be developed merely through action). A customer, on the other hand, is a “potential” client: you’ve walked into an Open House, or maybe you’ve called the listing agent about viewing a property – you are now a customer, but not yet a client.

 

There isn’t any easier way to explain the difference in obligation than making it in list form. So without anymore needless rambling from me, here it is:

The following obligations are those owed to the client, but NOT a customer:

  1. Performing mandate
  2. Obeying all legal instructions pertaining to real estate
  3. Act in person
  4. Disclose information concerning other party’s max/min price and/or terms
  5. Disclose information concerning other party’s motivation
  6. Disclose information concerning buyer’s financial ability to complete transaction
  7. Disclose information concerning other confidential information obtained from other party
  8. Provide confidential advice on any or all relevant matters
  9. Help negotiate and draft favourable terms
  10. Recommend relevant professionals/trades
  11. Fiduciary loyalty
  12. Not to act for both parties
  13. Not making secret profits
  14. Not to buy client’s property
  15. Not to sell own property to a client
  16. Not to act for parties whose interests conflict
  17. Not to misuse confidential information
  18. Disclose all personal conflicts of interest
  19. Client vicariously liable for misconduct of Brokerage (common law secondary liability)

The following obligations are those owed to the client AND the customer:

  1. Honesty
  2. Competency
  3. Disclose information concerning material defects in the property
  4. Present, in a timely manner, all offers, counter-offers, etc.
  5. Convey in a timely manner all information party wishes to have communicated
  6. Various statutory duties
  7. Provide real estate statistics, comparable property information, etc.
  8. Provide standard form agreements and other relevant documents
  9. Act as a scribe in the preparation of standard form agreements
  10. Provide the names of relevant professionals/trades (as opposed to recommending)

Any questions?

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