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Ontario|Real Estate LawGeneral 387 Role of Real Estate Agents
- What does a Real Estate Agent do for a seller?
Real estate agents generally help buyers find homes and help sellers market and sell their homes. If you are selling your home, a real estate agent can help you determine the fair market value, advertise your home to potential buyers, arrange for interested buyers to view your home, and guide you through the process of negotiating an agreement.
Most sellers sign a listing agreement with their real estate agent. This is a written contract between the seller and the real estate agent that sets out most of the duties and obligations of the relationship. It includes how the real estate agents will market the property and how much they will be paid for their services. In most cases, real estate agents are paid a commission, or percentage of the selling price. Commissions can vary from about 3% to 8%, although 5% to 6% commissions are typical in most areas of Ontario. If your property does not sell, you do not have to pay anything.
- What does a Real Estate Agent do for a buyer?
If you are buying a home, a real estate agent can help you find the right type of home at the right price, help prepare your offer to purchase, and present your offer to the owners. In most cases, there is no direct cost to a purchaser for the agent's services. The agent you work with will normally be paid part of the commission paid to the listing agent. In law, both the listing agent and the purchaser's real estate agent are working for the seller.
Unlike a seller, a buyer does not normally sign a written agreement with a real estate agent. However, there is a growing trend in many areas for real estate agents to ask buyers to sign what is called a purchaser agency agreement. These agreements generally commit purchasers to use only one agent for their purchase. Although agents with this type of agreement may provide better service to the purchasers, it is not usually necessary to sign a purchaser agency agreement.
- Obligations of Real Estate Agents
Real estate agents are held to certain standards and ethics under the Real Estate Business Broker's Act. Overall, they are required to use reasonable care when carrying out all of their duties. For example, they must perform the obligations in their agreement, and they must present all offers from potential buyers to the seller. Real estate agents must also be completely honest at all times, and must always follow your instructions. If you have a complaint about a real estate agent, you can contact the real estate board in your area for more information.
- Do you need a Real Estate Agent?
There is no legal requirement for home buyers and sellers to hire real estate agents. However, most people prefer the services and assistance of a professional. If you decide to contact a real estate agent, make sure you select someone you trust who has a good reputation and who is familiar with your neighbourhood and type of home. If you do not use a real estate agent, you can have a lawyer review any 'offers to purchase' or draft your offer.
Although most real estate agents can explain the basics of an Agreement of Purchase and Sale, you should have a real estate lawyer review the agreement before you sign it.
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