Buyer Representation–To Sign or Not to Sign, that is the question

Signing3This is just a general discussion on the Buyer Representation Agreement…I’ll delve into the specifics in future Blogs.

Buyers, you just spent 3-5 hours driving to your scheduled appointment with a real estate agent who has the listing on the property you want to see.  When you arrive, the agent says “sign this or I won’t show you any properties”.  How do you feel?

Sellers, your agent has just refused to show your listing.  How do you feel?  Frankly, chances are you will never know this transpired.

So Buyers, what do you do?  Turn around and go home?  Nope, likely you will sign that paper and likely without fully reading or understanding it.

ShotgunWeddingYou’ve just had a “Shotgun” wedding and you don’t even know your bride (or groom)!  You’ve just entered into a legal and binding contract for a determined set of time with someone you don’t know and you are starting off your search for one of the most important purchases of your life in an enforced relationship!  How do you think the rest of your decisions are going to go with your new “bride” (or groom)?

There is no requirement, no law or rule that says you must sign a Buyer Representation Agreement before an agent shows you a property.  The purpose of the Buyer Representation Agreement is for you to hire an agent to work on your behalf to help procure an acceptable offer on a property of your choice.   Would you hire someone to work for you at your workplace without an interview, or a series of interviews, or without seeing their resume?  Would you buy a pair of pants without trying them on?  No?  So, why “get married” to someone you don’t know and may not like? 

The difference between signing the agreement or not is that without a contractual agreement the agent can not give you advice.  When you are just beginning your search you are gathering information–are you really at the stage where you need advice?

If you are looking at property with an agent without a signed Buyer Representation Agreement they must answer all of your questions to the best of their ability.  Would this be adequate for your initial search?  Would this give you an opportunity to get to know the agent?  Would this help you determine his/her skill level, give you some insight into his/her personality, and allow you to make an educated decision regarding whether or not you want to continue to work with this person?

So, before you “get married” or sign that document determine what stage you are at in your relationship.  Do you have enough information on this agent to make that kind of commitment? Are you comfortable with this person? Have you established a good and comfortable working relationship?  If not and you are still being asked to sign, “try on another pair of pants”.  Seek out a more suitable agent…there are others who will accomodate you (and on short notice if need be)!

Once you have had a chance to “try out” an agent, ask yourself these questions:  Am I ready to buy and need advice?  Does this person listen to my needs and wants?  Does this person understand what I am looking for?  Is this person answering my questions in a skilful and knowledgeable manner?  Will this person look after my best interests and not pressure me into making an ill advised decision?  Is this person genuine?  Is this person successful?

If the answer is yes, then sign…and live happily ever after!  You will have a much more comfortable mutually respectful relationship and you will ultimately have a happy purchasing experience.  After all, this is a major purchase in your life…you want to enter into it wisely.

Respect and loyalty are earned…they’re not gained through pressure tactics or contractual obligations.

ALWAYS READ AND UNDERSTAND WHAT YOU ARE SIGNING.  If in doubt…ask for clarification and/or seek legal advise.

Watch for my next Blog on….

Northern Bruce Peninsula Trailer By-law

Don’t forget to send your comments, stories, or ideas, in the comment section below or via email at dimaline@amtelecom.net.

.
.


.
Kathy Dimaline is a Real Estate Broker for RE/MAX Grey Bruce Realty Inc.  T
he comments on this Blog are the opinions, only, of Kathy Dimaline and do not constitute any legal advice or legal opinion and does not represent the interests or opinions of RE/MAX Grey Bruce Realty Inc., brokerage.

© Copyright Kathy Dimaline, All Rights Reserved

Demystifying the Agreement of Purchase and Sale–Title Search Clause #8

ContractMy last Blog was about Title Search Clause #10 in the Agreement of Purchase and Sale, which is a conditional clause allowing for the Buyer’s lawyer to search for any valid objection to Title and other Title issues.  Clause #8 sets out the actual date for this conditional clause.

What most people don’t notice and it is often overlooked, is that there are actually two dates in this clause.

The first date is a date that is entered by your real estate agent.  This date refers only to any valid objection to title.

Usually this first date is set for approx 5 to 10 days prior to closing.  Not all lawyers will wait until the last minute of your condition date to begin their search, but many do.  And when that happens your closing can be put in jeopardy…

Buyers, you firmed up all of your other conditions weeks ago and now you are approaching closing…you may have already sold your house and started packing…and 7 days before closing your lawyer tells you about a major issue with title on the place you plan to move into in 7 days.  How do you feel?

Sellers, you’re confident your property has sold, you’ve purchased a new place and have started packing and now you find out about a major issue with title on your property, just before it’s due to close.  How do you feel?

A little pressured?  A little stressed?  And, what happens when you are pressured or stressed?  You make poor decisions!

You can renegotiate the deal, delay closing or walk away.  Any of these can have serious consequences and costs to either party.

So, Buyers and Sellers, how do you protect yourselves?

Set the Title Search Date for a week to 10 days after the date of all of the other conditions in the Agreement (don’t wait until the last 5 to 10 days before closing).  Then, set the closing date for 30 days after the Title Search Date.  This will ensure that you know of any problems well in advance and will give you lots of time to deal through all of the issues.

The second date in this clause actually allows more time for the Buyer’s lawyer to check work orders, deficiency notices, use of the property and if fire insurance on the principal building (if there is one) can be obtained.  The Buyer’s lawyer has up to 5 days prior to closing to satisfy these four points.  If this is all left until the last 5 days…in my opinion this puts you back into the pressure cooker.  Now you are srambling to fix things and it may mean delays or worse.

Here’s a solution… remove all reference to this other date and have all of the search requirements completed by the first dateThis, again, will ensure you have plenty of notice and can make timely and effective decisions. If you don’t remove this portion of the clause, then, at the very least keep after your lawyers to make sure you have plenty of notice of any issues.   Don’t leave yourself short.

Present use must also be filled in, in this clause.  What does that mean?  It means, the buyer is purchasing the property based on current permitted uses as per Municipal and County zoning.

Sellers, it’s important that you disclose current zoning of your property, both on the listing and here in this clause on the Agreement.

Buyers, if you plan to use the property for something other than the “Present use” declared, you should do your due diligence in advance of firming up on the deal. Include a conditional clause in the Agreement on satisfying yourself on any potential zoning change or required building permits you may want to explore in future.

There are significant implications if there are issues on Title.  You need to know the importance of these two clauses (#8 and #10) and how they affect you, whether you are the Buyer or the Seller.  Be sure you understand  them and what the consequences can be if there is a problem.

Here’s the clause in its entirety:

Title Search Date

A last minute discovery of a Title problem can be devastating!

ALWAYS READ AND UNDERSTAND WHAT YOU ARE SIGNING.  If in doubt…ask for clarification and/or seek legal advise.

Watch for my next Blog on….

Buyer Representation–To Sign or Not to Sign, that is the question!

Don’t forget to send your comments, stories, or ideas, in the comment section below or via email at dimaline@amtelecom.net.

.
.


.
Kathy Dimaline is a Real Estate Broker for RE/MAX Grey Bruce Realty Inc.  T
he comments on this Blog are the opinions, only, of Kathy Dimaline and do not constitute any legal advice or legal opinion and does not represent the interests or opinions of RE/MAX Grey Bruce Realty Inc., brokerage.

© Copyright Kathy Dimaline, All Rights Reserved

Tamarac Island Waterfront Home–$599,000

Click on Photo for full listing details.

Click on Photo for full listing details.

Spectacular executive waterfront home on exclusive Tamarac Island in Stokes Bay.  114` of beautiful Lake Huron waterfront with deep water at the shore, featuring a private boat launch, removable dock, marine rail. Open concept living/dining/kitchen area with pine beam and Cathedral ceiling. Designer kitchen with lots of maple cabinets. Walk out from dining room. Gorgeous floor to ceiling stone propane fireplace in living room. Exceptional lake views for all main floor rooms including the large master bedroom.  Upper level has Large open loft entertaining area, three more bedrooms and  4 piece bathroom, and so much more…