On July 1, 2014, the Real Estate Council of Alberta (RECA) will require industry members who establish a client relationship with a buyer who is trading in residential real estate to enter into a written service agreement with that buyer.
RED DEER, AB – Alberta is following in the foot steps of Ontario with changes to section 43 of the Real Estate Act that will make it mandatory for a buyer who wants to be a client of a real estate agent to sign a contract for services. This change comes years after sellers have been signing written service agreements to list their home on the MLS® System but these types of agreements with buyers have been optional. Susan Rochefort, owner and co-founder of Lime Green Realty, said the intent of making the contracts mandatory is to continue to elevate the level of professionalism in the real estate industry, “I see this change as something really positive for our industry. Working with a real estate professional has evolved dramatically over the years and this next step continues to improve our industry. These written service agreements will better define the agents roles and responsibilities in representing buyers and ultimately create a more professional environment.”
The mandatory contracts give the consumer the option to enter into an exclusive or non-exclusive contract. These contracts are between the real estate brokerage and the buyer just as listing contracts are between the brokerage and the seller. Therefore, the real estate brokerage will need to agree on the type of contract that a buyer and their agent enter into. An exclusive contract requires the buyer to work with only one agent and a non-exclusive contract allows the buyer to work with multiple agents. Susan believes that most agents will want to be working under exclusive contracts, “Imagine waking up every morning and wondering if you are going to get paid for the work you did yesterday. We all perceive that our time is worth something or we wouldn’t be working in the business and a non-exclusive contract puts the agent at risk of not getting paid for their time and expenses.”
The Real Estate Council of Alberta (RECA) will be providing agents with standardized exclusive written service agreements for residential transactions, which can be found on their website at www.reca.ca. “I am sure there is going to be a transition period in educating consumers but if you have ever sold a house through the MLS® System, you have signed a written service agreement. This should make written service agreements with buyers a relatively simple adjustment,” explained Rochefort. “The best explanation I have heard regarding these contracts is that this is just a loyalty agreement. Buyers want their agents to be loyal to them and we as agents want our clients to be loyal to us. This just makes sense.”
ABOUT LIME GREEN REALTY INC.
Lime Green Realty offers free money to all buyers on possession day in the form of a cash back cheque which equals 25% of the commissions earned by Lime Green Realty on a buyers purchase. Most real estate offices do not offer a cash back incentive to buyers. An example of the calculation for the cash back on a $300,000 purchase would be a cheque in the amount of $1,500 to the buyer. Lime Green Realty opened in Red Deer, Alberta in May 2009 as a full service, low commission real estate brokerage. To date, Lime Green Realty has kept $2.08 Million dollars in sellers pockets in Central Alberta by offering lower commissions than a typical rate of 6% on the first $100,000 and 3% on the balance but still providing consumers with full real estate agent services. Lime Green Realty has also given over $446,000 back to buyers through their buyer loyalty program.
Data obtained from the CARA MLS® System. 25% cash back based on a commission paid of 3% on the first $100,000 and 1.5% on the balance. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.