The GTA housing market remains red hot. If you are one of those looking to either buy or sell a home then one of your first jobs will probably involve finding a real estate agent.
Selling a Home
Although you are not legally required to employ the services of a real estate agent when selling your home, most sellers will decide to hire a professional. Once you have found an agent you are comfortable with, you will be asked to sign a listing agreement. A listing agreement1 is a binding contract between you and the agent’s real estate company. This agreement gives the realtor an exclusive listing of your home for a fixed period of time and the right to list your property on the Multiple Listing Service (MLS).
The listing agreement spells out the terms under which you are willing to sell your home as well as the commission to be paid. Another important provision in the agreement is the hold over period, typically 60 to 90 days. The reason for this clause is to prevent a seller and a purchaser, who was introduced or shown the property during the contract period, from by-passing the agent and avoiding the commission.
It is important to understand that the listing agreement is not an offer to sell and you have no legal requirement to accept any offer, including what you originally set out in the listing agreement. However in the latter case you may still be liable to pay the realtor’s commission.
Buying a Home
When you are selling your home you expect to sign an agreement with your realtor. These days, buyers are also being asked to sign a representation agreement. You will have the choice of signing either a Buyer Representation Agreement or a Buyer Customer Service Agreement.
The Buyer Representation Agreement states that for a designated period of time, the buyer has engaged a specific real estate company to work exclusively on his or her behalf. The agreement also indicates that the realtor will make his or her best efforts for the buyer.
The Buyer Customer Service Agreement is an acknowledgment by the buyer that he or she has been provided with written information explaining agency relationships including Seller Representation, Sub-Agency, Buyer Representation, Multiple Representation and Customer Service.
Regardless of whether you are buying or selling, prior to signing an agreement you should read it over carefully and understand what you are agreeing to. In addition, you should firmly establish the level of service you will receive and the commission you will be required to pay. If you are unsure about the agreement speak to your lawyer before signing on the dotted line.
Our lawyers would be pleased to assist you.Share