4 Most Frequently Asked Questions
By Mark Weisleder
As you may know by now, there have been recent changes to the Trust in Real Estate Services Act, 2002 (TRESA) that governs the relationship between a real estate agent and potential buyers and sellers. With that in mind, I’d like to give you some answers to the most common questions I’ve received since the Act was passed.
1. What is the Real Estate Council of Ontario (RECO) Information Guide?
The RECO Information Guide gives information on everything a buyer or seller can expect when they are considering receiving services from a real estate agent. The guide explains the benefits of being a client and the risks involved if a consumer wants to represent themselves. The guide describes the services you will receive, the real estate commission you may pay, and the different kinds of Agency, such as the regular Brokerage Agency or Designated Agency.
2. What is the difference between Brokerage Agency and Designated Agency?
Under a common Brokerage Representation, the brokerage and all its agents are working in the best interests of the client. Under Designated Representation, the designated representative identified in the agreement is responsible for providing all advice and representing the best interests of the client. For the consumer, this is likely what they would expect…that the agent they hire is supposed to be the one to answer all their questions, provide timely advice, and guide them when it’s time to make any important decision to buy or sell
3. Can I receive real estate commission if I am a self-represented buyer?
No. You cannot receive any real estate commission when you are a self-represented buyer.
4. What are the main changes made to bidding wars?
Under TRESA, sellers can now disclose the contents of competing offers to buyers. The seller can now authorize their agent to disclose to other bidders any or all of an offer’s details including: the highest price, highest deposit, shortest closing date, and whether an offer is conditional or not. The seller can choose what details they want to disclose, and this must be shared with every buyer who makes an offer. While sellers can still choose a blind bidding process, they have the right to decide during the offer presentation to change the process to open bidding.
Buyers can make their own offer confidential or include a clause that the contents can only be shared under certain circumstances. Buyers must review this very important strategy with their agent before participating in any bidding war.
