Nov. 9, 2022
Working with a Real Estate Agent:
Buyers and sellers are presented with the brochure “Working with a Real Estate Agent” when they first meet a REALTOR®. Industry regulations have now made it mandatory for agents to explain immediately the kind of relationship you can have with your REALTOR®, also known as agency. The agent will ask you to sign a statement in the brochure acknowledging this discussion has taken place, tear off and keep the signed statement, and give you the brochure for future reference.
Signing the disclosure statement does not give you any obligation to that REALTOR®. It merely confirms that you have discussed your agency representation options. If you decide to buy or sell with that REALTOR® you will sign a contractual agreement: the listing agreement (as a seller) or the exclusive buyers' agency agreement (as a buyer).
MLS® Listing Contract:
Sellers will sign a Multiple Listing Service® Listing Contract with their REALTOR®. This contract outlines the terms of their listing, including the length of time for the listing, the price, the commission to be paid, all the parties to the listing, the address and the legal description of the property to be sold, how the seller is to be paid, the preferred possession date, the financial obligations, and other information regarding the property.
The MLS® Listing Contract is the seller's agreement with the listing agency, not the salesperson. If the salesperson leaves that company, it is up to the seller and the listing company to decide whether or not the listing will go with the salesperson, or whether it will stay with the original company and be assigned to another salesperson.
The standard MLS® Listing Contract explains that the seller is liable to pay a commission if the listing agent or a cooperating agent brings an offer which meets all of the stated terms and conditions of the seller. As with other services, there is HST payable on commission, so when you are calculating your proceeds, take that into consideration.
Data Input Form:
Your REALTOR® will fill out the Data Input Form, which asks for all the necessary information to list your property. This includes the number and size of rooms, lot size, construction type, house style and more. Data from this form is entered into the MLS® database, where other REALTORS® are able to match your home with buyers.
Exclusive Listing Contract:
You and your REALTOR® will use an Exclusive Listing Contract if you choose not to list your property on the Multiple Listing Service®. An exclusive listing publicizes by advertising and the sign alone, without the benefit of the catalogue/computer. Sellers sometimes believe an exclusive listing will encourage fewer "lookers," and more buyers. However, an exclusive listing is often overlooked by REALTORS® working with buyers, because the first place they look is in the MLS® catalogue/computer. The greater the number of people who know about a property the greater the chance a larger number of serious buyers will meet your terms and asking price.
A Listing Amendment form is used whenever a change is made to the original MLS® or Exclusive Listing Contract. A change may involve extending the listing date, changing the price, altering wording on the print- out, correcting measurements, or tax or financial information to name a few. All the owners and the manager of listing agency will need to sign this form.
Sometimes it is necessary to cancel a listing. You and your REALTOR® will need to fill out a Listing Cancellation Form. This form usually has a preprinted clause stating if the property sells within 60 days of cancellation, or before the natural expiry of the listing (whichever comes first), the seller is liable for commission. This is to ensure a REALTOR® receives compensations for the advertising dollars and hours spent showing a home prior to a listing cancellation. If the seller is thinking of canceling a listing because they are dissatisfied with the service of a REALTOR®, the seller should speak to the manager of the listing agency and outline their concerns. The listing agency will make every effort to achieve satisfactory results.
Hold Action Form:
Sometimes the personal circumstances of a seller changes, and it is necessary to temporarily stop marketing a home. If this happens, your REALTOR® will help you fill out a Hold Action Form. This form tells other REALTORS® who have access to your listing through the MLS® system that you wish to delay the sale of your home.
Property Disclosure Statement (PDS):
A seller is legally responsible to provide accurate information about the property they are selling. This includes all knowledge about the property, defects about which the owner is aware, and any upcoming expenses (such as special assessments in strata-titled properties). This information is provided on the Property Disclosure Statement form, and is filled out by the seller. The REALTOR® is not permitted to fill out the PDS on behalf of the seller.
Answers on the PDS must be correct and complete. The buyer will rely on this information if they decide to purchase the property, and any incorrect or incomplete information can make the seller liable. The PDS does not cover every aspect of the property, and the buyer must still make their own inquiries. The buyer can also hire an independent, licensed inspector.
Limited Dual Agency Agreement:
When an agent represents a buyer and a seller in a single transaction, it’s necessary to complete a Limited Dual Agency Agreement. This form gives an agent authorization to represent both parties in a limited capacity, while maintaining both parties' confidences regarding motivation, negotiating positions and personal information (unless either party gives the agent written permission to disclose such information).
This form is also used when two salespersons from the same company are involved.
Contract of Purchase and Sale:
The Contract of Purchase and Sale standard form is the basic contract signed by the parties (the sellers and the buyers). It outlines every aspect of the transaction, including the price, the terms and conditions, the dates, the inclusions and exclusions, the handling of existing tenancies, the deposit and increase (where applicable) and other legal matters as described in the preprinted contract and added as clauses.
Addendum (With Printed Clauses):
A special addendum form with preprinted clauses will be added to the basic sales contract if there is either financing to be cleared from the title before the seller can provide clear title, or where there is financing to be put into place after the title is registered in the buyer's name.
Addendum (Without Printed Clauses):
A basic blank addendum form is used to write additional clauses on the contract when there is not enough space on the contract itself. When that has been done, the buyer signs this form indicating that this clause is being removed.
Amendment to Contract of Purchase and Sale:
This form is used to remove conditions (subject removal) when they have been satisfied. An example might be where a buyer has to find financing by a certain date.
A lease is used more often in commercial transactions than in residential ones. However, you may be a landlord or a tenant who prefers to use a lease for stability of tenure. A commercial lease is a complex document and should be drawn up by a specialist in the commercial field and reviewed by a lawyer for each party. A residential lease is less complex and normally involves a standard rental agreement with an outline of the rules and regulations of the building or complex, or expectations of the owner and tenant above and beyond what the Residential Tenancy Act sets out. If you have any doubts about how to draw a lease or how to interpret specific clauses, consult a lawyer or a REALTOR®.
Mortgages come in a wide variety of formats, depending on the lending institution. Many institutions use a simplified form, and refer to the larger form where any deviations from their standard form may occur. The buyer should check that the document matches the commitment letter they signed outlining the terms of their mortgage. This will include the interest rate, the term, the amortization period, the prepayment privilege ("penalty"), the options (if any) for increasing the number of payments or making lump sum payments, the assumability of the mortgage if the property is sold, and the portability of the mortgage if the seller wishes to use it on another property.
If you are a seller who is carrying financing for a buyer of your property, make sure that your lawyer reviews the documents before you sign them. If you are a buyer who is asking a seller to carry financing, make sure your own lawyer reviews the documents as well. Many serious issues may arise where the parties are unfamiliar with the law concerning mortgage financing.