One of Real Estate’s Best Kept Secrets

[Devils Advocate]

Why Hire An Agent ?

WELL, HOW ABOUT .......PEACE OF MIND AND INSURANCE (the agents insurance)

The Consumer for his own protection, must establish in writing that they have engaged the services of the Agent in a fiduciary relationship, whereby the Agent is legally bound to protect and promote the best interest of their Client, together with many other duties imposed upon them under the Law of Agency.

The Retainer Agreement engaging the services of the real estate agent is in this instance generally described as either the “Listing Agreement” executed by a Seller or a “Buyer Representation Agreement” executed by a Buyer, either one of these standard forms in Ontario will establish a fiduciary relationship between the designated parties and their Agent.

Now ..... to the best of my knowledge, a consumer acting for themselves in a residential real estate transaction, cannot purchase errors & omission insurance, per se or even afford it if they could, but they can gain protection under their Agents insurance coverage by hiring and holding their Agent liable for any error & omission as may have been committed by their Agent, while acting on their Client's behalf.

Simply put, when a Client get sued, they in turn sue their Agent (Cross-action) because the Agent was specifically engaged, because of his knowledge and experience to prevent such errors and omissions from occurring and that he had a legal and fiduciary obligation to his Client to do so.

When considering that court awards can be in the thousands of dollars or that the legal litigation costs (fees and disbursements) can also run into the thousands of dollars, hiring an Agent is a cheap form of insurance that protects the Client.

Smart and knowledgeable Agents, will take great care to avoid their liability by fulfilling their fiduciary duty to their Client, especially when they are aware that their client will hold their feet to the fire should they fail to do so.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

 

[daveto]

Gosh, if only I could find an agent...
gee, where oh where could I find one...

Devil's Advocate? Could you offer any suggestion?

 

[cabbagetowner]

Why Hire An Agent ?

WELL, HOW ABOUT .......PEACE OF MIND AND INSURANCE (the agents insurance)

The Consumer for his own protection, must establish in writing that they have engaged the services of the Agent in a fiduciary relationship, whereby the Agent is legally bound to protect and promote the best interest of their Client, together with many other duties imposed upon them under the Law of Agency.

The Retainer Agreement engaging the services of the real estate agent is in this instance generally described as either the “Listing Agreement†executed by a Seller or a “Buyer Representation Agreement†executed by a Buyer, either one of these standard forms in Ontario will establish a fiduciary relationship between the designated parties and their Agent.

Now ..... to the best of my knowledge, a consumer acting for themselves in a residential real estate transaction, cannot purchase errors & omission insurance, per se or even afford it if they could, but they can gain protection under their Agents insurance coverage by hiring and holding their Agent liable for any error & omission as may have been committed by their Agent, while acting on their Client's behalf.

Simply put, when a Client get sued, they in turn sue their Agent (Cross-action) because the Agent was specifically engaged, because of his knowledge and experience to prevent such errors and omissions from occurring and that he had a legal and fiduciary obligation to his Client to do so.

When considering that court awards can be in the thousands of dollars or that the legal litigation costs (fees and disbursements) can also run into the thousands of dollars, hiring an Agent is a cheap form of insurance that protects the Client.

Smart and knowledgeable Agents, will take great care to avoid their liability by fulfilling their fiduciary duty to their Client, especially when they are aware that their client will hold their feet to the fire should they fail to do so.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

wrong. not even close.

 

[Solaris]

Why Hire An Agent ?

MODs ... I believe this thread screams advertisement and deserves to be deleted

 

[Devils Advocate]

Best Kept Secrets Exposed

Update - At the risk of offending those affiliated with the real estate industry about being exposed to possible liability, I submit that this post has been simply submitted as Basie Educational Information Only and is not a solicitation

I am not aware of any valid reason of why a Consumers should not be made aware of laws relating to how the agent must treat and deal with the public in general and specifically his or her clients with stringent penalties imposed by the regulatory authorities via an administrative tribunal for a breach thereof.

Rather than to delve into the complex matter of agency law, I shall briefly state what I believe are the fundamental and key elements of any professional relationship, primarily whether it is a fiduciary relationship or a non-fiduciary relationship.

LIABILITY

A fiduciary relationship embodies and imposes upon the agent as a matter of the common law of agency the following duties: Loyalty, Obedience, Disclosure, Confidentiality, Reasonable Care and Diligence, and Accounting , together with all the various elements of each duty.

An agent in a fiduciary relationship may be held legally and financially liable in the event he or she fails to fulfill all elements of their fiduciary duty to their client, and may result, depending upon the infraction, in prosecution by the regulatory authorities, by a crown attorney on behalf of the crown for a violation of the Provincial Offences Act and/or a violation of the Criminal Code of Canada.

Further, the agent may be sued civilly for damages, all of which could involve insurmountable legal costs for the agent and which in most cases is not covered by his or her insurance.

RISK REDUCTION

Therefore, because of the extended liability connected with representing buyers in a fiduciary relationship, some agents prefer to reduce their risks of liability by choosing not to represent buyers, who are known to be the plaintiffs in the majority of litigated real estate actions, but to represent only the sellers, by acting as the sub-agents of the seller’s listing broker.

A non-fiduciary relationship on the other hand, imposes none of the aforementioned fiduciary duties upon the agent and therefore none of the corresponding liability other than to treat the consumer fairly and allows the agent’s to work “WITH†the consumer as a customer, as opposed to working “FOR†a consumer as a client in a fiduciary relationship. In essence, the consumer is without representation and is legally deemed to be self-represented.

INFORMED DECISION

In Ontario, and in order for a consumer to make an “informed decision†the governing Real Estate and Business Brokers Act, 2002 requires an agent to make full and timely disclosure in writing, of the various types of relationships agreements available, together with both the positive and negative factors of each type of relationship, thus enabling the consumer to make an informed decision with respect to whether or not he or she choses to engage the services of the real estate agent and the type of relationship they desire.

In the event the consumer declines to execute an acknowledgement that he or she has been so informed, or to recognize his or her status as a customer as opposed to being a client, a prudent agent would ensure that a registered “non-engagement letter†is mailed to the consumer without delay, the purpose of which is to confirm that the agent is not representing the consumer and to circumvent any future claims of an “Implied Agency Relationship†in which the agent breached his or her fiduciary duty to the consumer. Currently a “Customer Representation Agreement†is basically a formalized non-engagement letter.

Representation Agreement

Over the years, representation agreements have progressed from what was initially a “unilateral agreement of authority†binding only upon the client, namely the seller, to what are now "bilateral agreements" binding upon both client and agent.

Currently, Buyer Representation Agreements or Seller Representation Agreements are clear evidence of a fiduciary relationship between the parties.

Note that a consumer without "documentary evidence" would perhaps find it difficult to successfully sue an agent for an alleged breach of the agent’s fiduciary duty, without such documentary evidence.

Further, as in all contracts, the parties can agree to the insertion of a “Termination Clause†by which either party may at their sole and absolute discretion and/or for a specified cause terminate the agreement without cost, obligation and/or liability.

This also would apply to a consumer contemplating entering a binding bilateral Buyers Representation Agreement with an added "termination clause" and the clear understanding that you will not only expect but will demand that the agent fulfill all his or her fiduciary duties to you.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

 

[Devils Advocate]

Best Kept Secrets Exposed

Update - At the risk of offending those affiliated with the real estate industry about being exposed to possible liability, I submit that this post has been simply submitted as Basie Educational Information Only and is not a solicitation

I am not aware of any valid reason of why a Consumers should not be made aware of laws relating to how the agent must treat and deal with the public in general and specifically his or her clients with stringent penalties imposed by the regulatory authorities via an administrative tribunal for a breach thereof.

Rather than to delve into the complex matter of agency law, I shall briefly state what I believe are the fundamental and key elements of any professional relationship, primarily whether it is a fiduciary relationship or a non-fiduciary relationship.

LIABILITY

A fiduciary relationship embodies and imposes upon the agent as a matter of the common law of agency the following duties: Loyalty, Obedience, Disclosure, Confidentiality, Reasonable Care and Diligence, and Accounting , together with all the various elements of each duty.

An agent in a fiduciary relationship may be held legally and financially liable in the event he or she fails to fulfill all elements of their fiduciary duty to their client, and may result, depending upon the infraction, in prosecution by the regulatory authorities, by a crown attorney on behalf of the crown for a violation of the Provincial Offences Act and/or a violation of the Criminal Code of Canada.

Further, the agent may be sued civilly for damages, all of which could involve insurmountable legal costs for the agent and which in most cases is not covered by his or her insurance.

RISK REDUCTION

Therefore, because of the extended liability connected with representing buyers in a fiduciary relationship, some agents prefer to reduce their risks of liability by choosing not to represent buyers, who are known to be the plaintiffs in the majority of litigated real estate actions, but to represent only the sellers, by acting as the sub-agents of the seller’s listing broker.

A non-fiduciary relationship on the other hand, imposes none of the aforementioned fiduciary duties upon the agent and therefore none of the corresponding liability other than to treat the consumer fairly and allows the agent’s to work “WITH†the consumer as a customer, as opposed to working “FOR†a consumer as a client in a fiduciary relationship. In essence, the consumer is without representation and is legally deemed to be self-represented.

INFORMED DECISION

In Ontario, and in order for a consumer to make an “informed decision†the governing Real Estate and Business Brokers Act, 2002 requires an agent to make full and timely disclosure in writing, of the various types of relationships agreements available, together with both the positive and negative factors of each type of relationship, thus enabling the consumer to make an informed decision with respect to whether or not he or she choses to engage the services of the real estate agent and the type of relationship they desire.

In the event the consumer declines to execute an acknowledgement that he or she has been so informed, or to recognize his or her status as a customer as opposed to being a client, a prudent agent would ensure that a registered “non-engagement letter†is mailed to the consumer without delay, the purpose of which is to confirm that the agent is not representing the consumer and to circumvent any future claims of an “Implied Agency Relationship†in which the agent breached his or her fiduciary duty to the consumer. Currently a “Customer Representation Agreement†is basically a formalized non-engagement letter.

Representation Agreement

Over the years, representation agreements have progressed from what was initially a “unilateral agreement of authority†binding only upon the client, namely the seller, to what are now "bilateral agreements" binding upon both client and agent.

Currently, Buyer Representation Agreements or Seller Representation Agreements are clear evidence of a fiduciary relationship between the parties.

Note that a consumer without "documentary evidence" would perhaps find it difficult to successfully sue an agent for an alleged breach of the agent’s fiduciary duty, without such documentary evidence.

Further, as in all contracts, the parties can agree to the insertion of a “Termination Clause†by which either party may at their sole and absolute discretion and/or for a specified cause terminate the agreement without cost, obligation and/or liability.

This also would apply to a consumer contemplating entering a binding bilateral Buyers Representation Agreement with an added "termination clause" and the clear understanding that you will not only expect but will demand that the agent fulfill all his or her fiduciary duties to you.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

 

[Solaris]

(moral of the above story)

Best Kept Secrets - Hire a Real Estate Agent now !!

note: double posting the same adversarial ?? ... now that may just be trying a little too hard

 

[watewate]

I usually never post on the forum (not an expert in urban planning or architecture) but am compelled to post here.

Let's throw out the legalese and speak plain English. Basically, as long as you disclose all KNOWN dangerous defects, you, as the seller, will be fine. This holds true in most cases with some exceptions.

So basically, this horse dung about spreading risk is relevant only if you're deliberately trying to mislead the buyer.

In any case, it's a terribly expensive "insurance policy" to purchase. By engaging an agent, you're 100% certain to pay out the commission (let's say $20K based on 5% of $400K sale) for a problem that you believe not to exist. That sounds like a crappy deal for any honest seller who is acting in good faith.

 

[cdr108]

So Devils Advocate, would the seller and realtors be on the hook to the homebuyers we see on 'holmes on homes' who bought from a seller thinking it was safe and up to code ???


Personally, I take more value on the disclaimer of your advertisement:

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

 

[cabbagetowner]

Update - At the risk of offending those affiliated with the real estate industry about being exposed to possible liability, I submit that this post has been simply submitted as Basie Educational Information Only and is not a solicitation

I am not aware of any valid reason of why a Consumers should not be made aware of laws relating to how the agent must treat and deal with the public in general and specifically his or her clients with stringent penalties imposed by the regulatory authorities via an administrative tribunal for a breach thereof.

Rather than to delve into the complex matter of agency law, I shall briefly state what I believe are the fundamental and key elements of any professional relationship, primarily whether it is a fiduciary relationship or a non-fiduciary relationship.

LIABILITY

A fiduciary relationship embodies and imposes upon the agent as a matter of the common law of agency the following duties: Loyalty, Obedience, Disclosure, Confidentiality, Reasonable Care and Diligence, and Accounting , together with all the various elements of each duty.

An agent in a fiduciary relationship may be held legally and financially liable in the event he or she fails to fulfill all elements of their fiduciary duty to their client, and may result, depending upon the infraction, in prosecution by the regulatory authorities, by a crown attorney on behalf of the crown for a violation of the Provincial Offences Act and/or a violation of the Criminal Code of Canada.

Further, the agent may be sued civilly for damages, all of which could involve insurmountable legal costs for the agent and which in most cases is not covered by his or her insurance.

RISK REDUCTION

Therefore, because of the extended liability connected with representing buyers in a fiduciary relationship, some agents prefer to reduce their risks of liability by choosing not to represent buyers, who are known to be the plaintiffs in the majority of litigated real estate actions, but to represent only the sellers, by acting as the sub-agents of the seller’s listing broker.

A non-fiduciary relationship on the other hand, imposes none of the aforementioned fiduciary duties upon the agent and therefore none of the corresponding liability other than to treat the consumer fairly and allows the agent’s to work “WITH†the consumer as a customer, as opposed to working “FOR†a consumer as a client in a fiduciary relationship. In essence, the consumer is without representation and is legally deemed to be self-represented.

INFORMED DECISION

In Ontario, and in order for a consumer to make an “informed decision†the governing Real Estate and Business Brokers Act, 2002 requires an agent to make full and timely disclosure in writing, of the various types of relationships agreements available, together with both the positive and negative factors of each type of relationship, thus enabling the consumer to make an informed decision with respect to whether or not he or she choses to engage the services of the real estate agent and the type of relationship they desire.

In the event the consumer declines to execute an acknowledgement that he or she has been so informed, or to recognize his or her status as a customer as opposed to being a client, a prudent agent would ensure that a registered “non-engagement letter†is mailed to the consumer without delay, the purpose of which is to confirm that the agent is not representing the consumer and to circumvent any future claims of an “Implied Agency Relationship†in which the agent breached his or her fiduciary duty to the consumer. Currently a “Customer Representation Agreement†is basically a formalized non-engagement letter.

Representation Agreement

Over the years, representation agreements have progressed from what was initially a “unilateral agreement of authority†binding only upon the client, namely the seller, to what are now "bilateral agreements" binding upon both client and agent.

Currently, Buyer Representation Agreements or Seller Representation Agreements are clear evidence of a fiduciary relationship between the parties.

Note that a consumer without "documentary evidence" would perhaps find it difficult to successfully sue an agent for an alleged breach of the agent’s fiduciary duty, without such documentary evidence.

Further, as in all contracts, the parties can agree to the insertion of a “Termination Clause†by which either party may at their sole and absolute discretion and/or for a specified cause terminate the agreement without cost, obligation and/or liability.

This also would apply to a consumer contemplating entering a binding bilateral Buyers Representation Agreement with an added "termination clause" and the clear understanding that you will not only expect but will demand that the agent fulfill all his or her fiduciary duties to you.

Important Notice: This information is provided as basic educational information by the author and is not a substitute for the advice of an expert and/or the advice of a lawyer. There is NO representation as to legality, accuracy, correctness of the herein information and the reader is strongly urged to consult a lawyer in the relevant jurisdiction to ensure accuracy before acting on this information .

seriously - how often have you been sued?

 

[slickpete83]

Why Hire An Agent ???? good point !!! , who needs an agent ( middle man)
Best Kept Secret ---> http://www.bytheowner.com/ ----> no commission hahahaha... skip the middle man

what do you guys think of this ????

 

[rbt]

Why Hire An Agent ???? good point !!! , who needs an agent ( middle man)
Best Kept Secret ---> http://www.bytheowner.com/ ----> no commission hahahaha... skip the middle man

what do you guys think of this ????

I think the $450 listing fee (mid-range package) is crazy given it gets you on a website with 800k visitors monthly who are looking at all Canadian real-estate. That's a very small number of eyeballs looking in the Toronto region and more than half of those will be weighing their options to list, not buy.

There are discount brokerages in Toronto that will list you on MLS for a similar fee which receives many times more eyeballs looking for Toronto real-estate.


If going For Sale By Owner, I think buying your own sign and spending the money on newspaper classifieds and local marketing (local neighbourhood newsletter, etc.) would be a far better way to spend your money.