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Document you will see when buying and selling a home
"Working with a Real Estate Agent"
Buyers and sellers will be presented with this brochure at the earliest contact with a real estate agent. Industry regulations have now made it mandatory for agents to explain at the beginning of the client relationship the options of agency representation you have, and to disclose the capacity in which the agent will be working with you: i.e. as a buyer's agent, a seller's agent, as a sub-agent to the seller, or as a dual agent. The agent will then ask you to sign a statement acknowledging that this disclosure of agency representation has taken place. He or she will then tear off and keep the signed statement and give you the brochure for future reference.
Signing the disclosure statement in the Working with a Real Estate Agent brochure does not bind you to any obligation to that real estate agent. It merely confirms that you have discussed your agency representation options with the agent. You will have a contractual arrangement with your agent when you sign the listing agreement (as a seller) or the exclusive buyers' agency agreement (as a buyer).
LISTING-RELATED DOCUMENTS
MLS® Listing Contract
The Multiple Listing Service Listing® Contract outlines the terms of the listing contract, including the length of time for the listing, the price, the commission to be paid, all the parties to the listing, the address and the legal description of the property to be sold, how the seller is to be paid, the preferred possession date, the financial obligations, and other information regarding the property.
The listing agreement is the seller's agreement with the listing agency, not the salesperson individually. If the salesperson leaves that company, it is up to the seller and the listing company to decide whether or not the listing will go with the salesperson, or whether it will stay with the original company and be assigned to another salesperson.
The standard MLS® Listing Contract explains that the seller is liable to pay a commission if the listing agent or a cooperating agent brings an offer which meets all of the stated terms and conditions of the seller. Even if the seller introduced (during the listing period) the person who eventually buys the property, a commission is owed to the listing agency.
As with other services, there is GST (but not yet PST) payable on commission, so when you are calculating your proceeds, take that into consideration.
Data Input Form
The Data Input Form is the sheet the REALTOR® fills out with all of the information about the property, plus the comments the other REALTORS® read in the MLS® catalogue and computer print-outs.
The comments section is used to give your REALTOR® written permission to disclose to buyers and cooperating agents certain information, such as your reason for selling your home.
Exclusive Listing Contract
The Exclusive Listing Contract is used when a property is not going to be on the Multiple Listing Service®. The listing is publicized by advertising and the sign alone, without the benefit of the catalogue/computer. At times, the seller will prefer an exclusive listing in the belief that there will be fewer "lookers," rather than buyers. Actually that is not the case. An exclusive listing is often overlooked by REALTORS® working with buyers, because the first place they look is in the MLS® catalogue/computer. The more people who know about a property, the greater the chance of a larger number of serious buyers viewing the property and making offers until the acceptable price and terms are reached.
Listing Amendment
A Listing Amendment form is used whenever a change is made to the original MLS® or Exclusive Listing Contract. This may involve extending the date, changing the price, altering wording on the print-out, correcting measurements or tax or financial information, etc. It must be signed by all owners, as on the original listing contract, as well as by the manager of the listing agency.
Listing Cancellation
From time to time a listing is cancelled for various reasons. The Listing Cancellation form used in most areas has a preprinted clause which states that if the property sells within 60 days of cancellation, or before the natural expiry of the listing (whichever comes first), the seller is liable for commission. The reason behind this clause is that, at times a seller may be told by a buyer to cancel the listing so that the seller will not be liable for the commission and the buyer will pay less. This dishonest approach tries to cheat the REALTOR® out of a commission, even though the REALTOR® may have spent hundreds of dollars on advertising and hours at open house and other showings trying to sell the house.
If the seller is very dissatisfied with the service of a REALTOR® , the seller should speak to the manager of the listing agency and outline his/her concerns. The listing agency will make every effort to achieve satisfactory results.
Hold Action Form
At times, it is necessary to stop the marketing of a property for awhile because of illness or other personal circumstances of the seller. By definition, when your home is listed on MLS®, all REALTORS® have an opportunity to find a buyer for your property. The Hold Action Form communicates your wishes to all REALTORS® who have access to MLS® that you wish to delay the sale of your home.
Property Condition Disclosure Statement (PCDS)
Every residential listing placed on the MLS® must be accompanied by this form which is filled out by the seller and signed, as acknowledgement, by the buyer. If the signed PCDS is not submitted to the real estate board with the listing contract, the listing will not be placed on the MLS®. The seller indicates his knowledge of various aspects of the property, defects of which he is aware, and any upcoming expenses, (as in special assessments in strata-titled properties).
The REALTOR® is not permitted to fill out the form. The REALTOR® will keep a copy, and may file a copy with the MLS® listing at the real estate board, but it goes no further. The buyer receives a copy after signing and dating it.
The form does not cover every aspect of the property. A buyer is still advised to consult an independent inspector if there are questions or concerns that are not adequately answered.
PURCHASING-RELATED DOCUMENTS
Exclusive Buyer's Agency Contract
Many listing contracts for properties listed for sale on the Multiple Listing Service® stipulate the compensation offered to the agent who obtains a buyer for the property. However, many listing contracts do not provide for the remuneration for the buyer's agent. To ensure that they will be adequately compensated for their service to you, some REALTORS® may request that you as buyer enter into a written agreement with them. The remuneration to the buyer's agent will still come from the transaction and will be able to be financed as part of your mortgage. REALTORS® who use buyer's agency contracts feel that this commitment on the part of both REALTOR® and client enables them to provide better service and offer the buyer a wider selection of property from which to choose.
The Exclusive Buyer's Agency Contract outlines the services you will receive from the REALTOR® , and the obligations of both you as buyer and the REALTOR® in the buying transaction.
Limited Dual Agency Agreement
This form is used when the agent represents both the buyer and the seller in a single transaction. It is used when the situation involves either one salesperson who represents both the buyer and the seller, or when two salespersons from the same company are involved.
This agreement modifies the prior Listing Contract and the Buyer's Agency Contract (or verbal buyer's agency agreement) and gives the agent the authorization to represent both parties in a limited capacity. It authorizes the agent to maintain both parties' confidences regarding motivation, negotiating positions and personal information (unless either party gives the agent written permission to disclose such information).
Contract of Purchase and Sale
The Contract of Purchase and Sale standard form is the basic contract signed by the parties (the sellers and the buyers). It outlines every aspect of the transaction, including the price, the terms and conditions, the dates, the inclusions and exclusions, the handling of existing tenancies, the deposit and increase (where applicable) and other legal matters as described in the preprinted contract and added as clauses.
Addendum (with printed clauses)
The basic contract will be accompanied by a special addendum form with preprinted clauses where there is either financing to be cleared from the title before the seller can provide clear title, or where there is financing to be put into place after the title is registered in the buyer's name.
Addendum (without printed clauses)
The basic blank addendum for is used to write additional clauses on the contract when there is not adequate space to do so on the contract itself.
Amendment to Contract of Purchase and Sale
This form is used to remove conditions (subject removal) when they have been satisfied, as in the situation where a buyer has to find financing by a certain date. When that has been done, the buyer signs this form indicating that this clause is being removed.
OTHER DOCUMENTS
Leases
Usually leases are used more in commercial transactions than in residential ones, but you may be a landlord or a tenant who prefers to use a lease for a specified time period for any number of reasons, including stability of tenure. A commercial lease is very involved and should be drawn up by a specialist in the commercial field and reviewed by a lawyer for each party.
A residential lease is less complex and normally involves little more than a standard rental agreement with an outline of the rules and regulations of the building or complex, or expectations of the owner and tenant above and beyond what the Residnetial Tenancy Act sets out. If you have any doubts about how to draw a lease or how to interpret specific clauses, consult a lawyer or a REALTOR®.
Mortgages
Mortgages come in a wide variety of formats, depending on the lending institution. Now, many institutions use a simplified form and make reference to the larger form where any deviations from clauses in their standard form may occur. The buyer should check that the document matches the commitment letter they have signed outlining the terms, including the interest rate, the term, the amortization period, the prepayment privilege ("penalty"), the options (if any) for increasing the number of payments or making lump sum payments, the assumability of the mortgage if the property is sold, and the portability of the mortgage if the seller wishes to use it on another property.
If you are a seller who is carrying financing for a buyer of your property, make sure that your lawyer reviews the documents before you sign them. If you are a buyer who is asking a seller to carry financing, make sure your own lawyer reviews the documents as well. Many serious issues may arise where the parties are unfamiliar with the law concerning mortgage financing.
This article was originally published by the B.C. Real Estate Association in 1994 and has been reprinted with permission and updated by the Fraser Valley Real Estate Board in 1995 for the information and benefit of consumers. The Fraser Valley Real Estate Board is a non-profit association of 2,600 REALTORS® who live and work in the communities of North Delta, Surrey, White Rock, Langley, Abbotsford and Mission. For further information please call the Communications Department at the Fraser Valley Real Estate Board, 588-6555 or 853-4492.
(This document is provided by the Land Centre courtesy of the Fraser Valley Real Estate Board)
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