New Real Estate Rules Released!

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It’s been quite a week for us Real Estate Agents. There have been some major changes in how we’re to interact with Buyers and Sellers. There is a lot to learn to ensure that we’re compliant, but at the end of the day, this doesn’t affect the core of our business – we always did, and always will, strive to be supportive, knowledgeable, hard working agents focused on finding our clients the best possible home.

The new changes I’ll discuss below came into effect on June 15th 2018. We’ve had a few months to analyze the proposed changes and prepare for them, though our line of work is so fluid that it’s hard to be prepared for every possible scenario. These changes were instituted by the Real Estate Council of BC which is the organization in charge of enforcing licensing and conduct requirements of every agent in the province. They’re introducing these rules to increase consumer protection and ensure that everything that happens in a Real Estate transaction is above board. There are a lot of terrible agents out there, and having to interact with many of them on a regular basis, I can understand why the Council thought these rules were needed. Unfortunately, due to the thorough nature of these rules, we will encounter some odd situations.

New Changes to BC Real Estate Rules

For a more thorough review of the new rules:

No More Dual Agency!

This means we can’t represent both the Buyer and the Seller in the same transaction or we can’t help 2 different Buyers offer on the same property. These deals are rare, but it does occasionally happen where one of our Buyers is the perfect fit for one of our Sellers properties. If this situation were to come up, one party, likely the Buyer, would have to find new Realtor representation in order to offer on the property. If two of my Buyers want to offer on the same property, one set of Buyers will have to find a different agent to act on their behalf.
If neither party is willing to find a different Realtor to represent them, then I would have to walk away from both parties, and each one would have to find a new Realtor.
My question: Does this work in their best interest? Forcing our clients to work with an agent they don’t have any history with in order to buy a property they love?
We would have to maintain the privacy of all of our current and former clients, and keep their information confidential from the party we continue working with.

Upfront Conversations about Representation

We will now need to ensure every Buyer or Seller we speak with understands the relationship we (will) have, i.e. the type of agency. So when I have a listing and Buyers want information beyond factual answers or advice, I need to show each Buyer a form indicating the relationship I intend to have with them: either represented (as in, I work in their best interest) or unrepresented (as in, I don’t have any special legal duties towards this person).
Don’t be alarmed if an agent tells you that they can’t continue their conversation with you at an Open Houses, or about their listing, until you review this form. Along with this form indicating our relationship, I’ll also have to ask my clients to sign a “Privacy Consent” indicating what information we need to perform our duties and how it will be use during the transaction.
I will be sending these forms to my existing clients (indicating that I’m working in their best interest) the next time we interact. As for Open Houses, I’ll be limited to offering factual answers to questions until Buyers are willing to acknowledge that they understand that I’m working in the best interest of the Seller.

Increased Protection Against “No Agency”

Some Buyers elect to have a “No Agency” relationship with a Realtor. This typically happens when a Realtor has a great listing, and a Buyer either doesn’t have a Realtor or wants to use the Listing Agent to purchase the property assuming they’ll get a “deal”. Buyers who agree to a “No Agency” form of representation give up so many of their rights that it really is not in their best interest, so we are now required to ensure that these unrepresented Buyers understand what they’re agreeing too through mandated forms explaining their rights, what they can expect in this situation and encouraging them to not follow through with this plan and find a Realtor who can represent them.

Increased Disclosures about Fees Earned

The standard Listing Contract has been changed to detail exactly how much commission goes to the Listing Brokerage and the Buyers Brokerage. In addition to this, with each offer and counter offer we receive on one of our listings, we need to present the Seller with the exact number they’ll be paying in commission if they accept the given offer.
There will be some growing pains as we get used to all of these new rules, but hang tight, we’re just doing what we’re required. At the end of the day, the entire purpose of the rules is to make sure that you’re protected as a consumer making the biggest purchase of your life, and you can do that by working closely with an agent who has your best interests at heart.