I recently wrote the following note for a client, and thought you might find it helpful in understanding the pros and cons of signing a Buyer Representation Agreement. From the buyer’s perspective, there are more pros and cons, and I think all buyers should be willing to sign one of these when working with a professional Realtor. Of course from the Realtor’s perspective, there are only pros since this document helps ensure the Realtor will get paid for their services. But, is that a bad thing? Do buyers really want Realtors to work for nothing? I believe that buyers are reasonable and will agree that when they see value, they don’t mind paying professional fees.
I would appreciate hearing your thoughts on this. I have changed the names in the e-mail, but everything else is the same as what I sent to my potential clients. I will let you know how it works out.
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Good Morning Steve and Nancy,
Hopefully you will find the following points helpful as you make a decision to work with me to find your Beach house.
Advantages to You of Working with George O’Neill:
1. I will send you listings as soon as they are available. It can take 2-4 days before listings appear on MLS.CA, and by that time the most desirable properties may already be sold. South of Queen in the Beach is one of the most desirable locations in the city, and properties sell in short order if they are priced right. I will make you aware of those properties as soon as they are listed.
2. I live and work in the Beach, so some people have said I am an expert in this area. I will put my knowledge to work for you to help ensure you buy a property that meets your needs, and try to help avoid problem areas. For example, some of the properties on Glen Manor have had foundation problems, since there is an underground river in that area.
3. I work in real estate full-time and will use my expertise and resources to assist you in the absolute most professional way that I can. Both of you have other jobs, and cannot dedicate the time I can to perform the search and stay ahead of the market. I know you are not in a rush to purchase, and we can move as fast or as slow as you wish, but we do not want to miss anything because if the right property comes along, you said you will buy it under the right conditions. We need to be in front of all the potential properties, so you can make a decision before someone else scoops it up. I will help keep you ahead.
4. I have a network of lawyers, contractors, inspectors, and other professionals and trades that you may need prior to and after the purchase. These referrals can give you some comfort that you will be served well.
5. Some have asked me why am I in this business, when I am so highly educated (MSc. Engineering, MBA Marketing and Finance). The reason is I love real estate and I love helping clients buy and sell homes. I grew up in this business and have invested in real estate for over 20 years. I own properties in Toronto, Montreal and Fredericton. My parents owned a very successful brokerage in New Brunswick, so when I choose to leave the corporate world, I decided to come back to my roots to do this full time. This will be the last job I have, and that dedication, enthusiasm, knowledge and skills benefit clients like you.
Disadvantages to You of Working with George O’Neill:
1. As with any professional, there is a reasonable expectation to be paid for our expertise and the results we deliver. When I was a management consultant with Deloitte and PricewaterhouseCoopers, we always had engagement letters in place prior to starting any client work, which outlined the deliverables and the fees. I do not see what I do now that different. Since I work on a fee for service basis, I only get paid when there is a successful transaction. Almost always the seller pays the brokerage fees, but there can be instances when that fee is not adequate or non-existent in the case of some For-Sale-By-Owners. In those cases, what we can do is make the offer conditional upon the seller still paying the fee, and this often works if the offer is reasonable. If you still wish to purchase the property when the fees are not adequate we can discuss where the fees come from, and by that point in time I have never found it to be an issue because I will have already delivered lots of value and I will have demonstrated to you the benefits of working with me.
I trust this is helpful. You will find some realtors who do not ask you to sign the Buyer Representation Agreement early on, but all must have it filled in prior to any offer being presented (by Ontario law as outlined by RECO). Personally, I find it better to deal with this up front so everyone is aware of the arrangement and so there are no surprises. As professionals I think you understand the need for a two-way commitment – me to you and you to me – so afterward we can focus totally on getting you the house you love.
The Real Estate Council of Ontario (RECO) has produced an overview sheet to help explain the Buyer Representation Agreement. That information can be found at:
http://www.reco.on.ca/publicdocs/Buyer%20Representation%20Agreements.pdf
I look forward to your decision, and hope we do work together. I would be pleased to answer any questions to help you in your decision. A low-risk way to get started is for us to sign the agreement to cover a short period of time (say 2-3 weeks) to see how things go.
George
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I promised I would let you know how it turned out. Indeed I now have two new buyer clients, looking for a great home in the Beach. Thank you "Nancy" and "Steve" for putting your faith in me. We will find that perfect home for you!