The Real Estate Council of Alberta (RECA) has been threatening to do it for a long time and quite frankly, a lot of agents never thought it was going to happen. But as of July 1, 2014, Alberta REALTORS® will be mandated to get written service agreements with their buyer clients. It’s not a choice. It’s a rule, Rule 43 of the Real Estate Act Rules, to be precise.
Our role as your REALTOR® doesn’t change. In fact, even without a written agreement, our actions alone can create an agency relationship with buyers. The moment our conversation goes from an exchange of pleasantries and some basic market info to the provision of advice and/or acquisition of your confidential information, you become a “client.” This creates implied agency.
And when there is agency, there is an obligation by the real estate agent to act in your best interests. If agency does not exist, then you’re ultimately representing yourself. The public generally doesn’t understand this, or the implications of it in a real estate purchase.
A written agreement between agent and buyer creates explicit agency, much the same as a listing agreement between seller and agent establishes who is representing whom and on what terms. RECA has decided that all agency relationships—and ultimately the commitment between buyer and agent—should be established in writing, upfront.
If you don’t want representation or if you meet an agent for the first time and don’t wish to work with him, that’s fine too. The key is understanding the difference between being a represented “client” and an unrepresented “customer.”
REALTORS® will have the choice to use “Exclusive” or “Non-Exclusive” agreements in their business. In a non-exclusive agreement, the agent is not asking the buyer for a commitment and the agent’s fee is not specified. (In most real estate transactions, the fees are paid by the seller.)
Do You Need Someone to Unlock Doors So You Can “Just Look?”
Or Do You Want Professional Representation from the Beginning?
While real estate agents will have to revise their business models substantially, the public will likewise have to shift its thinking about REALTORS®. I’ve always run my own business from the perspective that I am a professional. Jumping out of my skin and into my car to show a virtual stranger a home, without any discussion about their needs and how I can best help them… well, that’s not a part of my repertoire. “Sales” is an important but proportionately small part of what I do for a living.
(I often wonder if people know that real estate agents don’t get paid to show houses?)
Regardless of what I think about the “need” for written service agreements, I DO believe it’s time we clearly establish the purpose of using a real estate agent to help buyers be successful with the purchase of a home.
The video below is a pleasant, albeit simplified, reframe. 😉