New realtor rules should be a good thing
A past-president of the Central Alberta Realtors Association doesn’t anticipate problems from a new requirement that Realtors and their buyer-clients must enter into written service agreements.
“Things aren’t going to really change, in terms of the service they get,” said Dale Russell, broker-owner of Re/Max Real Estate Central Alberta. “It’s just that now there will be a written agreement that outlines what we’re going to do.”
Effective July 1, the Real Estate Council of Alberta will require that buyers sign an agreement with their Realtor — or more accurately their Realtor’s brokerage firm — stipulating the services to be provided by the Realtor, the obligations and responsibilities of both parties, the basis upon which the Realtor will be compensated, and permission to collect and use the client’s personal information. Currently, only sellers of residential real estate typically enter into such agreements with their agents.
Russell thinks it’s a positive development that home buyers and their Realtors will now be required to do the same.
“This clarifies things for everybody involved,” he said, explaining that buyers often don’t know the nature of their relationship with a Realtor.
“We have no understanding with them or any discussion about exactly what it is that we’re going to do for that person.”
Problems that result include situations where a Realtor commits considerable time and resources to helping a buyer-client, only to see the buyer close a deal with another Realtor and leave them with no compensation.
“I don’t think that people intentionally set out to abuse the system or to abuse the process,” said Russell.
Instead, he said, it was a lack of understanding of how the industry works and how buyers’ agents are compensated.
There will be two types of service agreements: exclusive and non-exclusive.
Under an exclusive contract, the buyer will commit to work with one agent only; under a non-exclusive agreement, the buyer can deal with multiple agents.
The agreements can also specify the buyer’s obligation to compensate a Realtor, such as when there is no commission being paid by the seller.
Russell said the Real Estate Council of Alberta indicated in 2006 that it planned to implement mandatory service agreements for buyers, so brokerages and Realtors have had time to prepare.
“We’ve been doing it in our brokerage for six or seven years and we’ve never had a problem with anybody,” he said. “In my experience, people like to know how things work and what the rules are.”
But Russell also knows that many firms and Realtors will be implementing the agreements for the first time.
“There’s no question there’s going to be a little scrambling.”