Nowadays, we have access to almost every listing online giving buyers an advantage when it comes to finding a home.
But, there’s a lot more that goes into it than just finding a property. Here are some key things you might not have thought about.
Two types of Realtor-Buyer relationships exist: Client vs. Customer. You may think of these terms being used synonymously, however in real estate, that is NOT the case and can have very different implications.
A Realtor has a fiduciary duty to their client(s).
Meaning, if you are a “client”, Realtors and the Brokerage have an obligation to promote and protect your best interests at all times, particularly in a real estate transaction. They are ethically obligated to negotiate on your behalf and work FOR you.
Alternatively, your relationship can also be that of a “Customer” if you decide not to “officially” hire a realtor. An example would be if you were approach a listing agent and ask them to submit an offer for a property on your behalf for that property.
If you chose not to “hire” a realtor, you would likely remain as a “customer” if you decide to buy a house listed on MLS or Realtor.ca.
As a “Customer”, a Realtor and Brokerage will provide you with some level service, but might not necessarily be looking out for your best interests. They are also not obligated to keep your real estate search information confidential. This could translate into them drafting the offer, but not going above and beyond to make sure you are protected. Or advocating on your behalf during negotiations.
How can this hurt you as a buyer? For any home listed by a Realtor, the Seller would naturally be a “client” of the listing Agent. As such, they have a legal obligation to the SELLER to promote and protect their best interests in a real estate transaction. This includes getting them the best price possible, and also complete transparency.
So, by contacting listing agent directly, there’s a good chance their obligations are to the seller, and not to you. Translating into you potentially paying a higher price. Also, anything information, personal or other you may share with the listing agent could potentially be passed on to the Seller’s, putting you at a disadvantage during negotiations.
You might not be aware of, or have access to all of the clauses that should be included in your offer during negotiations. Realtors have been trained to know exactly what things should be included to avoid problems, or potentially legal issues down the line. Without knowing what you should be including in an offer, you open yourself up to future liability or even litigation.
- COMPARATIVE MARKET EVALUATIONS (CMA’S)
When it comes to purchase price, Realtors are experts in pricing strategies and knowing the comparables. Without access to all of the information, stats and tools a Realtor has, and without knowing how to analyze the comps, you risk overpaying for a home by tens of thousands of dollars or more.
In Ontario, the Real estate industry is highly regulated. The provincial government writes the rules that both Realtors & Brokerages must follow. RECO (Real Estate Council of Ontario) enforces the rules on the government’s behalf, and has laid out legislation and regulations that govern the entire profession. You can be assured that in most cases, you’ll be working with a dedicated, licensed professional bound to a strict code of ethics. And, you’ll have recourse for any wrongdoings or complaints through RECO.
These are just a few of the many reasons why having a Realtor by your side is imperative when searching for a home. Don’t put yourself at a disadvantage when it comes to purchasing the biggest asset you’ll ever own.