Multiple representation means a designated representative or brokerage represents more than one client, with competing interests, in the same transaction. This can happen in different ways, depending on the type of representation agreement you and the other clients have with the brokerage.
Under brokerage representation, multiple representation happens when:
the brokeragerepresents both the buyer and seller in the same transaction, or
the brokerage represents two or more competing buyers interested in the same property.
This is true even when the clients are working with different real estate agents.
Under designated representation, multiple representation happens when:
the same real estate agent is the designated representative for both the buyer and the seller in the same transaction, or
the same real estate agent is the designated representative for two or more competing buyers interested in the same property.
Multiple representation is not permitted unless each of the clients involved agrees. You should seek independent professional advice (for example, from your real estate lawyer) before proceeding.
The brokerage or your designated representative has a duty to promote and protect your best interests and avoid conflicts of interest. If your brokerage or designated representative enters into an agreement with another client who has an interest in the same property as you, this places both clients in multiple representation. Multiple representation introduces risks you and the other client should consider.
It’s important to understand the risks. If you agree to multiple representation, the brokerage or designated representative:
Must treat each of the clients involved in an objective and impartial manner;
Cannot maintain undivided loyalty to you or promote and protect your interests over the interests of the other client; and,
Cannot offer advice to you about such things as the price you should offer or accept or terms that should be included in an agreement of purchase and sale.
What to expect before you agree to multiple representation
The brokerage is required to provide you with a written disclosure that explains:
how the brokerage’s duties or the designated representative’s duties to you will change;
the differences in the services you will receive;
any change to how much you pay the brokerage.
Until this information is disclosed in writing to all clients or prospective clients in the transaction, and they all agree in writing, the brokerage or designated representative cannot not take any further steps on behalf of any of the clients or prospective clients.
Confidential information you provided to the brokerage or the designated representative when you were represented cannot be shared without your written consent.
You can refuse multiple representation
If you don’t agree, the brokerage or your designated representative is not allowed to proceed.
Ask the brokerage or real estate agent about alternatives to multiple representation. For example, if you are a buyer, the brokerage could refer you to another brokerage or another designated representative to help you make an offer on the property.
Agreeing to multiple representation significantly reduces what the brokerage and its agents can do for you, which could have consequences and costs.
Your representation agreement should describe the duties owed to you, the services you will receive, your rights and responsibilities, what you will pay, and specific terms of the agreement, including how long the agreement will last and whether you can cancel it.
Here are some key things to look for.
Type of representation
There are two kinds of representation agreements in Ontario:
Brokerage representation agreement
Designated representation agreement
The brokerage and all its agents represent you and must promote and protect your best interests, but one of the brokerage’s real estate agents may be your primary contact.
One (or more) of the brokerage’s real estate agents is your designated representative. The agent(s) represent(s) you and must promote and protect your best interests. The brokerage and its other agents are required to treat you impartially and objectively.
An important aspect of designated representation is that it reduces the likelihood of multiple representation. You can read more about multiple representation.
Designated representation was introduced in Ontario on December 1, 2023. Ask the real estate agent what type of representation the brokerage offers.
Name of your designated representative
If the contract is a designated representation agreement, the name of your designated representative will be included. More than one real estate agent working at the brokerage can be identified as your designated representative.
Scope
Your agreement should specify the scope of the engagement.
If you are a seller, this means the agreement will identify the specific property.
If you are a buyer, you should consider the scope of the agreement carefully. Your agreement might identify a specific property, a geographic area you are searching in, a type of property you are looking for, or other specific requirements. For example, if you are looking for both a house in a particular city, and a cottage property near a lake, and want to work with different real estate agents with local and property type expertise for each property, the scope should be clear in each of the agreements to avoid disputes about who you might have to pay if you buy a property.
Services
The agreement must clearly set out the services you will receive. There is no standard set of services – brokerages offer a variety of service options. You choose the services you want that best meet your needs.
You might enter into an agreement with a brokerage for a specific purpose like, for example, having an agent prepare an offer on a property you want to buy, or viewing a specific property. Some sellers enter into an agreement solely for the purpose of having their property advertised on a local listing service.
Ask the real estate agent about the available services or combination of services that may be right for you and your situation. If there are specific services you need or expect to receive, make sure they are included in the agreement or as a schedule to the agreement. Don’t assume a particular service will be provided if it’s not included in the agreement.
Payment amount and terms
You and the brokerage decide the amount you will pay for services. The amount is not fixed or approved by RECO, any government authority, or any real estate association or real estate board.
You can agree to pay a fixed dollar amount, a percentage of the sale price, or a combination of both. The representation agreement cannot specify an amount based on the difference between a property’s listing price and what it sells for.
Agreements must also identify circumstances in which the amounts agreed to might change and how they will change in each circumstance.
If you are a seller, your agreement needs to clearly indicate:
the amount you agree to pay your brokerage (or how it will be calculated) for the services and representation you receive;
the amount (or how it will be calculated) you agree to pay, if any, to compensate the buyer for their brokerage fees; and
Important note for buyers: A seller might not offer any amount to cover the fees you owe to your brokerage under your agreement. This could affect the amount you are able to offer for a property. Depending on your financial circumstances, you may not be able to afford to buy a property when the seller does not agree to pay your brokerage fees.
Termination provisions
The agreement should list all circumstances when the agreement can be terminated. Review when the brokerage can terminate the agreement, and make sure you are aware of any penalties or costs that might apply in each case.
Two important circumstances to be aware of:
Multiple representation:You do not have to agree to multiple representation, and your agreement should be clear about what happens in that situation. For example, the agreement could terminate completely, or you might be referred to another brokerage or designated representative for the specific transaction but otherwise remain under the agreement with the brokerage.
Changing your designated representative:If you have entered a designated representation agreement, the brokerage cannot appoint a different designated representative unless you agree. The brokerage may ask to appoint someone else if, for example, your designated representative stops working with the brokerage, or is otherwise not available to provide the services and representation outlined in the agreement.
Expiry date
The agreement’s expiry date must appear prominently on the first page. There is no set time or standard term for a representation agreement: it can be in place for a day, a few weeks, or months. Consider how long you want the agreement to remain in place, and make sure you know when your agreement will expire. Keep in mind that a holdover clause could mean you owe money even after the expiry of the agreement.
Holdover clause
Most representation agreements include what is often called a holdoverclause. The clause may require you to pay the brokerage fees for a purchase or sale even when the transaction happens after your representation agreement expires. The clause will specify the time the holdover clause is in effect from the date the agreement expires.
A holdover clause is designed to protect the brokerage, and there is no minimum or set time for a holdover period. If your agreement includes a holdover clause, make sure you agree to the length of the holdover period before you sign it.
For example, let’s say you are a seller, and your agreement includes a 30-day holdover clause. This means that even if your agreement has expired, under certain conditions, you might be obligated to pay the brokerage commission if you sell your home during the 30-day holdover period.
Similarly, assume you enter into a buyer agreement that includes a 30-day holdover clause and the agent shows you a home before the expiry of the contract. If you buy the home after the expiry of the agreement, but during the holdover period, you might be obligated to pay the brokerage commission.
http://kandoorealty.ca/wp-content/uploads/2024/04/cropped-Kandoo-Wide-e1714310491697-300x57.png00Abbas Jafarniahttp://kandoorealty.ca/wp-content/uploads/2024/04/cropped-Kandoo-Wide-e1714310491697-300x57.pngAbbas Jafarnia2024-04-30 11:25:292024-04-30 11:52:51What to look for in a representation agreement?
An open house is an event where you open your home to potential buyers and allow them to tour the property without an appointment. It is a common marketing strategy used by realtors and homeowners to attract more interest and exposure for a home that is for sale. However, the effectiveness of open houses is debatable. Open houses may not lead to many sales, as only a small percentage of buyers visit them. Most buyers nowadays rely on the internet to search for homes and view photos and videos online. Open houses may also attract people who are not serious buyers, such as curious neighbours, window shoppers, or thieves. On the other hand, some sources suggest that open houses may have some benefits for sellers, such as: • Increasing the visibility and awareness of the home in the market • Creating a sense of urgency and competition among buyers • Generating feedback and insights from visitors • Showcasing the home’s features and potential in person • Selling the home for a higher price and in a shorter time Therefore, the answer to your question may depend on various factors, such as: • The location, condition, and price of your home • The demand and supply of homes in your area • The preferences and habits of buyers in your market • The quality and experience of your realtor and their marketing plan • The costs and risks involved in hosting an open house Ultimately, the decision to have an open house is up to you and your realtor. You should weigh the pros and cons of this strategy and consider your goals and expectations. You should also prepare your home and yourself for the open house, such as cleaning, staging, securing valuables, and finding a place to stay during the event. I hope this answer helps you understand the impact of open houses on home sales. If you have any other questions, please feel free to ask me.
http://kandoorealty.ca/wp-content/uploads/2024/04/cropped-Kandoo-Wide-e1714310491697-300x57.png00Abbas Jafarniahttp://kandoorealty.ca/wp-content/uploads/2024/04/cropped-Kandoo-Wide-e1714310491697-300x57.pngAbbas Jafarnia2024-04-28 21:45:292024-04-28 21:45:29Does an open house increase the chance of selling my home?
That is a good question. A pre-approval is a process where a lender evaluates your income, debts, assets, and credit score to determine how much mortgage you can qualify for and at what interest rate. A pre-approval can help you establish your home buying budget, lock in a favourable rate, and show sellers that you are a serious and ready buyer. While a pre-approval is not mandatory before you contact me, it is highly recommended. Having a pre-approval will make your home search easier and faster, as you will know exactly what you can afford and what kind of properties to look for. It will also give you an edge over other buyers who may not have a pre-approval, especially in a competitive market where multiple offers are common. A pre-approval will also save you time and hassle when you are ready to make an offer, as you will already have most of the paperwork and documentation done. If you do not have a pre-approval yet, I can help you get one from a reputable lender. I have access to a network of mortgage professionals who can offer you the best rates and terms for your situation. All you need to do is provide some basic information and documents, such as your income, debts, assets, and credit report. The pre-approval process can take as little as an hour, depending on the lender and your circumstances. So, to answer your question, no, you do not need to have a pre-approval before you contact me, but it is a smart and beneficial move to get one as soon as possible. If you are interested in getting a pre-approval, please let me know and I will be happy to assist you. blush
http://kandoorealty.ca/wp-content/uploads/2024/04/cropped-Kandoo-Wide-e1714310491697-300x57.png00Abbas Jafarniahttp://kandoorealty.ca/wp-content/uploads/2024/04/cropped-Kandoo-Wide-e1714310491697-300x57.pngAbbas Jafarnia2024-04-28 21:45:002024-04-28 21:45:00What is a pre-approval and do I need to have one before I contact you?
