The Real Estate Brokerage Act: New Rules to Protect Buyers
*This article was originally published on moncoindevie.com *
On June 10, 2022, modifications to the Real Estate Brokerage Act and its regulations came into effect. These changes’ main objective is to provide stronger safeguards for buyers during a real estate transaction. In this way, those acquiring a property will henceforth be better protected. Which is great news! But how will this work, exactly? Read on to find out.
A review of the Real Estate Brokerage Act has been carried out to include new buyer protection rules.
No More Verbal Contracts A buyer can currently be represented by a real estate agent based on a simple verbal agreement. But as of June 10, of this year, a buyer will have to sign a written brokerage contract with a real estate agent for the latter to act as the buyer’s representative. In other words, without a written brokerage contract, the real estate agent can no longer represent the buyer nor defend their interests. This means that the agent is barred from:
Advising the buyer on how much to offer for a property
Submitting a promise to purchase in the buyer’s name
Negotiating the transaction’s amount and terms for the buyer
However, the agent can, in a general manner, counsel the buyer, or in technical terms, provide “fair treatment.” What Constitutes Fair Treatment? Fair treatment means providing unbiased information to the buyer in any situation where the real estate agent is obligated to do so. Specifically, the agent must demonstrate that the information presented to the buyer who is not represented by their own real estate agent is accurate. The agent is also required to notify the buyer of any negative aspects regarding the property in question. The agent cannot, however, act in the buyer’s name nor defend their interests. Prohibition of Double Representation
Have you signed a brokerage contract with an agent and would like to submit an offer to purchase for a property they have been mandated to sell? To protect your interests as a buyer, this agent will have to terminate the brokerage contract to purchase they have with you, free of charge. This agent is likewise required to recommend that you be represented by another real estate agent during the transaction. If you choose to go ahead on your own, they will again have to treat you fairly, as explained above.
For the buyer, signing a brokerage contract - purchase with their agent means they can benefit from formalized terms, for example.
The Advantages of Signing an Exclusive Brokerage Contract - Purchase
The real estate agent’s obligations are clearly stated in the contract.
The agent is focused on meeting the buyer’s needs since they are set out in the contract.
The buyer has a greater choice of properties since the agent can approach owners’ whose homes are not on the market.
The agent can submit a promise to purchase in the buyer’s name.
The agent can guide the buyer on the amount to offer.
The agent can negotiate the price as well as the transaction’s terms in the buyer’s name.
To summarize, these legislative amendments will ensure that a buyer who has signed an exclusive brokerage contract - purchase is well represented by their real estate agent who can in turn actively defend and protect their buyer’s interests. For more information, please visit the Why Choose a Real Estate Broker to Buy your Property? section of RE/MAX Quebec’s website.