Murray Brown

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What Is Buyer Agency?

If you're working with me to help you find the ideal home in the Kamloops area, I recommend you enter into a Buyer Agency agreement.  


It's simple, when you list a Kamloops house for sale with a REALTOR®, you sign a listing contract... when you are going to buy a Kamloops home  you should enter into a Buyer Agency Contract.  Under Buyer agency agreement you are protected in numerous ways. 


Buyer agency is defined legally, as a principal-agent relationship in which the broker is the agent for a buyer, with fiduciary (loyalty) responsibilities to the buyer.  What does that mean? It means that as a buyer's agent I am tied to you the buyer... that all of my loyalties are to you the buyer not to the party selling the home we may be looking at.  Part of my duties are to get you your new home at the best price I can negotiate for you.  I will only disclose information to the Seller about you, that you tell me to.  Under Buyer Agency I can even represent you on homes that are for sale privately. Buyer agency is a relatively new concept in the real estate world.

In the not too distant past (prior to 1993 in BC), agents were Seller's Agents, working for the person who signed a contract employing them to sell real estate.  Part of the legal theory was that if a home seller was paying commission to the agent who brought a buyer to write and offer on his home, then both the listing agent and the buyer's agent were legally working for the home seller.  Guess what? This left the home buyer with ZERO legal representation.


Over time that arrangement resulted in too many misunderstandings and law suites. "Joe the REALTOR®" could be driving a "Ted the Buyer" all around Kamloops for several months, showing him lots of homes.  The Buyer would tell his friends, "oh yeh, I'm working with Joe The Realtor... he's great, he's been showing me tons of homes"... now where the problems arose was when a Buyer would make statements to Joe when they got into an offer on one of Joe's listings... something like, "Joe I love this house, and I'm preparted to pay full price for it, but just see what you can do with the seller, to get it for me for a lower price".... well Joe because he was legally working for the seller (the client paying the commission) would have to disclose to the Seller the fact that this buyer is offering this low amount but has already disclosed to me that he's willing to pay full price.  A Buyer working with a Seller's Agent under the old system, often regarded that person as his agent, and felt free to make confidential statements, not understanding they would be passed on to the seller.


All across North America complaints were made to real estate commissions, and lawsuits were filed. As a result, around 1993, all Canadian provinces (and most US states) the Law of Agency changed and now require us to explain agency status to the buyer. In British Columbia we must make this disclosure at the first significant contact. As you can imagine, Agents in our offices talk with a great number of long-distance buyers, so that means we often disclose agency status over the phone.

In today's present BC real estate world, you'll find agents who work as Seller's Agents and Buyer's Agents, and also Dual Agents and Designated Agents.  This will change  in the Spring of 2018.


Under Dual Agency the REALTOR® is working for both the Seller and the Buyer.  This situation could happen when you come across a home for sale that is listed with your agent who is showing you homes.  The dilema that REALTOR®S find themselves in is how can they represent both parties... the home seller and the home buyer?   Truthfully and legally in my opinion, (and many lawyers) a REALTOR® can't represent both.  


So, about 5 years ago, personally I made the decision that I would no longer work under Dual Agency.  Ethically I just couldn't do it. Now (2018) the decision has been made for REALTORS by Michael Noseworthy the BC Superintendent of Real Estate... that Dual Agency will no longer be permitted (except for some remote geographical areas where there is only one realtor) 


In the process of finding you a home if you want to write an offer on one of my listings (which would mean I would be operating as a Dual Agent for both you and my seller), I will only be able to represent one of you (either you as the Buyer or the client of mine that has listed their home with me).  Obviously I still want you as my client, and I also want the home seller (that I've had my relationship with for sometimes years) to remain my client.... but I can only represent one of you.  


The way I solve this dilema, is I will represent which ever client I've been in a working relationship longer.... So if you and I have been out searching for a home for say 3 months, and just then I get a listing that you like enough to write an offer on, I will choose to work with you instead of the home seller, because we've been working together longer.  In this case I would refer my seller to my managing broker for my seller's legal representation.  This way you'll each have your own representation during the offer and purchasing process.  Now, vice versa, if you and I have been working for 3 months trying to find a house and you find one of my listings you want to write on that has been on the market for say 6 months, because I've been working with the seller longer than you the buyer, I would then refer YOU to my managing broker for your legal representation.  I truly believe this is the only ethical way to resolve this conflict.  I've used this with many clients since my decision to never work as a Dual Agent, and I've had no issues or conflicts.  In fact I've received praise from both the seller and buyer when ever this situation has arisen.



Our provincial organization the British Columbia Real Estate Association has a resource document called "Working With A Realtor" (soon to be updated) which explains the Law of Agency in plain easy to read English.  I've added this document to my website and you can access at the bottom of the page it by clicking on this link.


I recommend all my clients who are Home Buyers enter into a Buyer Agency contract.  You deserve and will receive full legal representation.  If you would like to contact me for more information on Buyer Agency agreements please use this link to set up an appointment.