December 27, 2007
An agent … by any other name
The common usage of the term ‘real estate agent’ is, nine times out of ten, not technically correct.
The nice lady who leaves cards in your mailbox or talks to you about selling your home is not a real estate agent. According to the Real Estate Council of Ontario, which regulates real estate brokerage in the province, she is a salesperson or a broker.
Your “agent” is the brokerage firm that you hire to represent you — not a person.
So your mother-in-law is not really your agent — what a relief.
But then, a rose by any other name …
December 18, 2007
Should you remodel?
Many homeowners wonder, should I remodel my bathroom? Should I replace the carpets? Should I put on a new deck? Well, the answer to that question will depend on many factors. As a homeowner, you need to be weary of “over-improving” your house Here are a few factors to consider when remodeling:
How does your house compare to those in your neighborhood?
If every house in your neighborhood has a brand new kitchen and your kitchen is from another era, it may be a good idea to freshen up the look with some new flooring and/or a new countertop. There are simple ways to improve your kitchen without putting a hole in your pocket. Sometimes a new paint job or the re-facing of the cabinets will do the trick and make your kitchen look up-to-date. Does this mean that if every house on your street has an in-ground pool, then you should have the same? By no means! Having a pool at your house is an amenity and not a requirement for a home.
How long do you plan to stay at the property?
If you plan to stay in your house for many years to come, odds are that the money you are putting into your home will pay for itself in the long run. If you are thinking of moving right away, that doesn’t mean you shouldn’t make improvements, but it is about making the right improvements - ones that will attract buyers and get your home sold for a higher price. Areas to focus on are the kitchen and baths, painting and flooring. Homeowners tend to see a higher return on their investment when they focus on these areas.
How much did you pay for your house and how much would it sell it for?
If there is a big difference between what you paid for your home and what you can sell it for – you will have more room for improvements! So how do you know how much your house is worth? For about $300 to $400, you can get aprofessional appraisal done on your property. Another option is getting a Comparative Market Analysis for your home from a real estate agent. Although it is not an official appraisal, it can help the homeowner understand the current market conditions and the highest price the market would bear for your property.
Do you enjoy your home?
Sometimes, you just want to add to the house because you simply want to enjoy your home. And that is okay! Besides, you bought the house so you didn’t have to rent from someone else who tells you what you can and cannot do! So, if you’ve been dying for a bigger deck or a stone walk-way you’ve always dreamed of – go at it, but – I would rethink the hot-pink walls, but that’s just my opinion!
Happy Remodeling!
December 18, 2007
Agency and Representation
Although some lawyers might disagree, the real estate industry operates within the common-law conventions of Agency.
An agent is obligated to promote the best interests of the person he or she represents. The agent must be loyal to that person and follow their lawful instructions. A real estate brokerage may be your agent – if you have clearly established an agency relationship with that Realtor with a representation agreement. But often, you may assume such an obligation exists when it does not. It is important to understand when an agency relationship exists and when it does not – and understand what it means.
In real estate services, there are different forms of agency relationships:
1. Seller representation
When a real estate brokerage represents a seller, it must do what is best for the seller of a property. A written contract, called a listing agreement, creates an agency relationship between the seller and the brokerage and establishes seller representation. It also explains services the brokerage will provide, establishes a fee arrangement for the Realtor®’s services and specifies what obligations a seller may have. A seller’s agent must tell the seller anything known about a buyer. For instance, if a seller’s agent knows a buyer is willing to offer more for a property, that information must be shared with the seller. Confidences a seller shares with a seller’s agent must be kept confidential from potential buyers and others. Although confidential information about the seller cannot be discussed, a buyer working with a seller’s agent can expect fair and honest service from the seller’s agent and disclosure of pertinent information about the property.
2. Buyer representation
A real estate brokerage representing a buyer must do what is best for the buyer. A written contract, called a buyer representation agreement, creates an agency relationship between the buyer and the brokerage, and establishes buyer representation. It also explains services the brokerage will provide, establishes a fee arrangement for the Realtor®’s services and specifies what obligations a buyer may have. Typically, buyers will be obliged to work exclusively with that brokerage for a period of time. Confidences a buyer shares with the buyer’s agent must be kept confidential. Although confidential information about the buyer cannot be disclosed, a seller working with a buyer’s agent can expect to be treated fairly and honestly.
3. Multiple representation
Occasionally a real estate brokerage will represent both the buyer and the seller. The buyer and seller must consent to this arrangement in writing. Under this multiple representation arrangement, the brokerage must do what is best for both the buyer and the seller. Since the brokerage’s loyalty is divided between the buyer and the seller who have conflicting interests, it is absolutely essential that a multiple representation relationship be properly documented. Representation agreements specifically describe the rights and duties of everyone involved and any limitations to those rights and duties.
4. Customer service
A real estate brokerage may provide services to buyers and sellers without creating buyer or seller representation. This is called "customer service." Under this arrangement, the brokerage can provide many valuable services in a fair and honest manner. This relationship can be set out in a buyer or seller customer service agreement. Real estate negotiations are often complex and a brokerage may be providing representation and/or customer service to more than one seller or buyer. The brokerage will disclose these relationships to each buyer and seller.
Who’s working for you?
It is important that you understand who the Realtor® is working for. For example, both the seller and the buyer may have their own agent which means they each have a Realtor® who is representing them. Or, some buyers choose to contact the seller’s agent directly. Under this arrangement the Realtor® is representing the seller, and must do what is best for the seller, but may provide many valuable customer services to the buyer. A Realtor® working with a buyer may even be a “sub-agent” of the seller. Under sub-agency, both the listing brokerage and the co-operating brokerage must do what is best for the seller even though the sub-agent may provide many valuable customer services to the buyer. If the brokerage represents both the seller and the buyer, this is multiple representation or dual agency.