Buyer representation: Are you a client or a customer?
You Now Have A Choice!
Effective January 1st 1995, in the Province of Ontario, the Buyer has the right to hire their own sales representative to represent their interests when buying a home. Prior to 1995 this privilege was only offered to sellers, and every sales representative selling homes in the Province of Ontario was either agent for the seller or sub agent to the seller. The Buyer did not or could not have their own representation. Now that has all changed and the Buyer does have a choice. So which to choose? Hopefully the following will help.
Represents you, the Buyer and is working to protect your interests during the home buying process. The Buyer’s Representative has a fiduciary responsibility to represent your best interest by structuring the transaction to your advantage.
Difference between Client and Customer Service
Do you want ”Client” Service from YOUR Real Estate Salesperson?
The Client is a party, individual or individuals who hire and contracts a Sales Representative and their real estate company, under a Buyer Representation Agreement, to represent the Buyer’s interests when buying or renting real estate.
Do you want ”Customer” Service from YOUR Real Estate Salesperson?
The Customer is the party that receives Services from a Seller’s Sales Representative, and the Sales Representative is representing the interests of the Seller in the transaction while providing customer service only to the Buyer.
What does ”Buyer/Client” Representation mean TO YOU?
Provide the Buyer with information on all properties available in the market place for sale that will best suit the Buyer’s needs.Provide the Buyer with sources of financing best suited for the individual or individuals and the property being funded.
Provide the Buyer information on prices of sold homes in any given market or neighborhood.
Provide the Buyer with an Evaluation (Comparative Market Analysis) of the property, they are considering buying or renting.
Advise the Buyer on Market Value of the property and recommend initial offer price when commencing the negotiating process.
Advise the Buyer or assist with all negotiating options in a multiple offer situation.
Prepare the Offer of Purchase to protect the Buyer’s interests.Advise the Buyer on the terms to offer on the home.
Under a Buyer Representation Agreement the Salesperson shall promote and protect the best interests of the Salesperson’s Client.
Fiduciary Duties to a Client
Undivided Loyalty – prohibits the agent from advancing any interests adverse to the client’s interest or conducting the client’s business to benefit a customer, a subagent, the agent or any other interests to the detriment of the principal. It is the duty of undivided loyalty that establishes the obligation to act solely in the best interest of the client.
Obedience – requires the agent to act subject to the client’s continuous control by not exceeding the scope of authority conferred by the client and obtaining and following all lawful instructions.
Reasonable Care and Diligence – requires the agent to protect the client from foreseeable risks of harm and recommend that the agent obtain expert advice or assistance when the client’s needs are outside the scope of the agent’s expertise.
Confidentiality – prohibits the agent from communication key personal information about the client which was given to or acquired by the agent within the scope of employment as an agent to the client. Personal information must be kept confidential unless the client releases the agent or sub-agent from this duty.
Full disclosure – requires the agent to disclose affirmatively all information concerning the transaction which might affect the client’s best interests.
Accounting – requires the agent to promptly report to the principal all money and property received and paid out, and upon request, to render an accounting. Also requires the agent to safeguard any and all money or property held on behalf of the client.
Basics of Buyer Customer Service
We give you all the information you need, but you have to decide on your own what price and terms to pay for the home.
We are working for the Seller and we must do what is BEST for the Seller.
What does ”Buyer Customer” Service mean TO YOU?
Provide the Buyer with information on properties for Sale
Provide the Buyer with sources of financing best suited for the individual or individuals and the property being funded.
Provide the Buyer with information on prices of Sold homes in any given area, so you can make an informed decision on what to pay.
Prepare the Offer of Purchase
Under a Buyer Customer Service Agreement, the Salesperson owes fiduciary duties to a client (Seller), while treating a customer fairly, honestly and with integrity.
Fiduciary Duties to a Customer- There are None!
Under a Buyer Customer Representation, the Salesperson owes fiduciary duties not to a Buyer but to the Seller (client), however must treat a customer fairly, honestly and with integrity.
If the Sales Representative is not representing the Buyer as a client in a transaction the Sales Representative is always representing the interests of the Seller (client) whether or not the property is listed with the Sales Representative.
Responsibilities to a Customer
Honesty – no fraud or misrepresentation (disclose material facts)
Fairness – make timely agency disclosures so that customers can protect their interests plus explain the difference between customer and client.
Accounting – honoring licensing laws requiring care of moneys of others.
Reasonable Care and Diligence – obey laws/regulations pertaining to transactions.
Our Commitment to You as a Buyer Client
Right Home: Making available to you every home in the market place today that will suit your family needs or lifestyle.
Right Price: Negotiate on your behalf the Best Price and Terms.
Locations: Ensure that the home you’re buying has no adverse site influences that will affect the value of your home.
Neighbourhoods: Identify the Best Neighbourhoods.
Amenities: Location of Schools, Churches, Recreation Facilities and Shopping. Builders: Construction: Advise on Builders Reputations and Track Record Transportation: Availability of Busing, Train, Air and Auto Routes
Financing: Arranging for the Best Mortgage Interest Rates and Terms.
Agreement of Purchase & Sale: Creating an Agreement of Purchase and Sale that will protect your interests during and after the sale and executing all subsequent related documents.
Building Inspection: Advise & recommend reputable home inspectors.
Septic Inspection: Advise & recommend reputable engineers and septic inspectors.
Well Pump & Pressure System Inspections: Advise and recommend reputable water system companies.
Water Tests: Ensure Safe Drinking Water.
Seller Property Information Statement: Why necessary and identifying Patent and Latent Defects.
Legal: Recommend Reputable Lawyers and advise on their role & job description. • Title Insurance: Why Necessary and Who are the Providers.
House Insurance: Some homes are uninsurable, resulting in your Mortgage Lender not advancing the monies on closing. Identify potential construction, location and environmental problems and protect you from future liabilities.
Mortgage Insurance: Three Types: Life, Job Loss and Mortgage. Make recommendations on what would suit your lifestyle the best and which ones are necessary.
Costs: Advise on all costs that you will incur through the buying process including inspection costs, mortgage insurance costs, closing costs, lawyers costs etc.
Government Programs: Advise on Government Programs and Incentives. Possession Day: What to Expect and when do you get the keys.
Moving Day: Advise on how to arrange your moving day so as to