Answers to four key real estate questions in 2017

As a longtime reader of your column, I’m curious: What do you think were the big issues that emerged in 2017?

As the year draws to a close, I can think of four key issues that occupied a lot of our attention at the Real Estate Council of Ontario: entry fees, backing out of a deal, lowball offers and multiple representation. Entry fees: There was a lot of chatter earlier in the year about salespeople who asked unsuspecting buyers to pay for early access to pre-construction properties. There were reports that some agents insisted upon cash payments and refused to provide receipts.

I wrote that if you are ever asked to pay an entry fee before being allowed to see a property, it’s important to find out how the money is being handled and what it’s being used for, insist upon written documentation and never be afraid to say no.

As well: if you pay an entry fee to a real estate professional and you don’t buy the property, it’s expected the money will be returned to you. Backing out of a deal: There were a number of stories this past year about buyers who agreed to purchase a home, and later tried to walk away from the deal. If you try this, you could find yourself on the hook for a lot more money than your initial deposit — you might find yourself on the receiving end of a lawsuit.

Whenever you buy or sell a property, you must sign legally binding documents. That’s why you need to understand everything, and ask questions. You would also be wellserved to get legal advice about any documents relating to a real estate transaction from a lawyer who knows real estate law.

Speaking of legally binding documents, this past November I wrote a column about Buyer Representation Agreements. When you work with a real estate salesperson, you might be asked to sign a BRA, which is an exclusive contract that binds you to your salesperson’s brokerage for a certain length of time. If you make an offer on a property and that offer is accepted, the brokerage could take legal action if you attempt to back out of the deal. You may eventually owe the brokerage a commission, or damages in lieu of commission. Lowball offers: Back in February, I responded to a reader whose elderly mother was regularly approached by house hunters and real estate salespeople who wanted her to sell her home. I replied that the reader’s mom needed to remember it was her house, she was in the driver’s seat and to watch out for lowball offers. And if she really wanted to sell, she ought to shop around for a real estate representative.

As well, it was up to her to carefully read the listing agreements and any other documents. A fair price for her home could be determined by consulting with her sales representative, or an independent appraiser. Multiple representation: This refers to a brokerage representing more than one party in a single transaction. A common example involves the same salesperson representing both the buyer and the seller.

This year RECO urged the Ontario government to tighten the rules that allow this. It’s been announced that the rules will change, and we are expecting more details in 2018.

RECO had a busy year, and I’m pleased to announce that 2017 ended on a high note for us with the arrival of our new CEO, Michael Beard.

Welcome aboard, Michael! Joe Richer is registrar of the Real Estate Council of Ontario (RECO). He oversees and enforces all rules governing real estate professionals in Ontario. Email questions to askjoe@reco.on.ca. Find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at youtube.com/RECOhelps.