Tips for 1st Time Home Buyers in Vancouver Episode 6: Working with a Realtor, FINTRAC and the Remuneration Disclosure
Part 6 in a series of videos that provide advice to Vancouver Buyers on the purchase of their first home. Your comments and questions are important to me and other readers of this blog. Write to me and I will reply!
You’ve found the home you're looking for... What next?
You have an idea of what this dream home is worth, as discussed in Vancouver First Time Home Buyer Tips Episode 5, now you and your Realtor need to draft up an offer or Contract of Purchase and Sale as it is officially referred to in BC, that will be submitted to the Seller and that informs the Seller that you are serious about buying the property.
STOP! Time for your Realtor Disclose EVERYTHING IN WRITING to you, the Buyer.
Prior to a Realtor preparing and submitting an offer on your behalf, there are important documents to consider. These documents are a constant source of confusion and questions from First Time Home Buyers and its one of the major reason I created the First Time Home Buyer Guide for Vancouver.
What needs to be filled out and signed and what it means!
» Working with a Realtor (WWR) – A home Buyer and their Realtor/Buyers Agent enter into whats called the Agency Agreement when they start to work together. This document lays out the A) obligations and duties of the Realtor to the Client and B) the Rights of the Client.
The salient points of the Agency Agreement as laid out in the WWR Brochure (click the link to the left for a view of the WWR document with a video explanation) The salient points of the Client/Agency Relationship are as follows:
1) Undivided loyalty: The Brokerage must protect the principal’s (read: client's) negotiating position at all times, and disclose all known facts which may affect or influence the principal’s (read: client's) decision.
2) To obey all lawful instructions of the principal (read: client).
3) An obligation to keep the confidences of the principal (read: client).
4) To exercise reasonable care and skill in performing all assigned duties.
5) To account for all money and property placed in an Brokerage’s hands while acting for the principal (read: client).
» What it Means: The Realtor works for the Client (First Time Home Buyer) and only the Client, no matter who is paying the Realtor and has to tell the Client EVERYTHING!
2) The Client/Buyer is the BOSS! No ifs, ands, or buts!
3) The Buyer's Real Estate Agent CANNOT talk about the clients affairs with ANYONE, unless given permission by the Client.
4) The Realtor has to do his/her job correctly or face serious consequences.
5) Everything given to the Realtor becomes the Realtor's personal responsibility (ie deposit cheques, keys, photos...anything.
» FINTRAC - Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) gathers, analyzes, assesses and discloses financial intelligence and requires all Realtors in Canada to ascertain the identity of the their clients and submit it to< FINTRAC. (click this link to view a FINTRAC document with a video explanation)
» What It Means: Big Brother/the Government of Canada wants to know if buyers of real estate in Canada are funding terrorism or laundering money and wants all of the personal information of these Buyers. Failure to submit the required information to FINTRAC can result in prison time for both the Buyer and the Realtor.
» Disclosure of Remuneration - BC Realtors have a duty to disclose to their Clients, in writing, how he/she is getting paid, by whom and how much. All Buyers working with a Realtor must initial or sign a Disclosure of Remuneration that informs the Buyer of these things.
» What it Means – For First Home Buyers, perusal and comprehension of the Disclosure of Remuneration is how they come to understand how and how much their Realtor gets paid
. This is how it works: The Seller agrees to pay their Realtor (or Seller's Agent) a commission to sell their property (via a Disclosure of Remuneration document between that Seller and that Seller's Agent/Realtor). The Seller's Agent/Realtor then offers about half of this commission to the Buyer's Agent/Realtor in the event that their offer is accepted and the deal reaches the date of Completion. The Buyer's Realtor/Agent must get it in writing that the Buyer is aware of how much the Buyer's Realtor/Agent is getting paid and by whom. PLEASE NOTE – Buyers do not pay the Buyer's Realtor/Agent! For a more detailed explanation check out my Disclosure of Remuneration video blog.
Once all these documents are signed and filled out its time to prepare the offer or Contract of Purchase and Sale, so stay tuned for Episode 7 of the First Time Home Buyer Tips Vancouver: The Contract of Purchase and Sale!
I Strongly Encourage Questions and Comments!
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