Just as with any other major purchase, buying a home involves comparison shopping with an eye on price, product attributions and quality. Your Realtor can help you find what you are looking for and help you secure the purchase.
The relationship between a real estate brokerage and a client is called an ‘Agency’. There are three major kinds:
1. Seller (vendor) agency
The real estate brokerage and all its Realtors represent the seller exclusively and it’s their job to get the best offer on the home. They are legally obliged to tell the seller anything known about a buyer. Your Realtor earns a commission for the seller.
2. Buyer (purchaser) agency
The real estate brokerage and all its Realtors represent the buyer exclusively. They seek out homes that meet the buyer’s needs and help assess the merits and defects of potential homes. They keep the buyer’s information confidential and never disclose information such as the maximum amount their buyer is willing to pay.
You may be asked by your Realtor to sign a buyer agency agreement. In fact, in some provinces, Realtors are required to ask you – for your own protection. This agreement ensures that the Realtor and the brokerage can look after your best interests.
3. Dual agency
Sometimes, a brokerage may have an agency relationship with the buyer and the seller. Both the seller and the buyer must give their informed consent, and the Realtor must always provide full and timely disclosure of all pertinent information to both parties.
The Offer
Realtors are expertly trained and will prepare the offer for you. Here are some terms you will see in the offer:
- Buyer or purchaser: that’s you
- Seller or vendor: the present owners
- Purchase price: the amount you offer
- Irrevocability of the offer: the length of time you give the seller to consider your offer
- Deposit: a payment you make to the seller’s broker, who deposits it in a trust account. This is your way of saying ‘my offer is serious;’ the size of the deposit is negotiable, the amount will be counted as part of your down payment
- Clauses particular to this agreement: every transaction is unique and your Realtor may add conditions important to you. Offers that are conditional upon a proper home inspection for financing approval are common
- Fixtures included and excluded: be sure you know what is included with the house, such as the washer and dryer, the microwave, draperies and light fixtures. Don’t leave anything to chance because chances are it won’t be there when you move in
- Completion date: the day you take possession
Your Realtor will now present your offer to the seller’s Realtor. The seller can do one of three things:
a) accept your offer; or
b) reject your offer; or
c) counter your offer
Often the seller will counter your price by crossing out your offer and writing a higher number. This can go back and forth until either party decides to either accept or reject one of the counters. Now it is up to you to make sure all your conditions are finalized or met. If you requested a home inspection, you can go ahead and order one from a qualified professional. Or if it was conditional to financing, it is time to go back to your lender at Synergy Credit Union with the accepted offer and get a final approval letter. After all your conditions are met, you will sign a removal of conditions letter.
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