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The real estate industry sometimes uses language that appears
at first glance to be clear, but do you as a consumer know what some
terms really mean? At first glance, the words
"Client" and "Customer" seem pretty clear-cut, but they mean completely different
things to a
REALTOR®.
It also means a tremendous difference in how seriously you are taken as a Buyer. Think we’re splitting hairs? The words
"Client" and "Customer" and the way they relate to the
REALTOR®
as individuals make a tremendous difference in the types and level of service
you receive. After you read why, you’ll know absolutely whether you want to be
one or the other.
First, let’s
start with a little history.
REALTORS®
have always worked with home Sellers to list their homes for sale on the market.
Along with this service comes the responsibility to advertise the homes, network
with other
REALTORS®
to find a Buyer, negotiate the sales contract and guide the Sellers to
successful closings. Because of the time and expenses incurred by the sales
representative and broker which will not be reimbursed until the closing of the
home, Sellers have always been required to sign a listing contract. This
contract enables the sales representative/Broker enough time to properly market
the property, find a Buyer, negotiate a contract and get the property to closing
within the time frame allowed. It also protects the agent from home owners
who wish to use services without fairly compensating the professional.
The real benefit, however, is for the home owner. Once
the home owner has signed the contract, the sales representative/Broker has the fiduciary
responsibility to get the highest price possible for the home and to protect the
Seller’s interests above all else. The sales representative must also follow provincial and
federal mandated regulations as to ethics and legalities that are enforceable by
a provincial council in conjunction with the local Real Estate Association.
In other words, the contract is legally binding with the
REALTORS®
performance at stake. Now that a contract has been signed, the home owner is a
"Client" of the sales representative/Broker, and enjoys the full privileges of a close, working
relationship.
Buyers have
historically worked with
REALTORS® too, but it
wasn’t until fairly recently that they have been asked to sign "Buyer
Representation
Agreements". This is a change that has come about because of two reasons...abuse
to Buyer’s agents and increased consumer awareness. Without a
contract the Buyer’s agent was particularly vulnerable to working without
getting paid. Too often, Buyers would ask them to show them house after house,
and then buy from another sales representative. One favorite Buyer trick is to
attend open houses without their
REALTOR® and tell the listing
sales representative
they aren’t working with anyone. Buyers mistakenly believe that they are
learning about more homes without a sales rep. at their side, or that they may
possibly get a better deal. The truth is...they don’t!
They usually pay
more for the home than they have to when they buy from the listing sales
representative directly.
Then consumer awareness
dawned. Buyers began to realize
that whoever represented them at the closing table was on the side of the
Seller, not theirs. They realized that they deserved to have a true advocate,
and the Buyer’s Representative was born. The only way was to create a binding agreement
that protected both parties. Good
REALTORS® didn’t want to be burned again so the "Buyer
Representation Agreement" was created. Again, it was a protection for the
REALTOR®,
but
it generates much more benefit for the Buyer. The main advantage is that it
releases the agent from a fiduciary responsibility to the Seller and enables the
agent to pursue the Buyer’s goals without any agenda.
Once the contract
is signed, the sales representative goes into motion searching the
MLS® for homes, and seeking homes through other avenues -
foreclosures, FSBO’s, and their own database. At negotiations, the contracted
Buyer’s representative becomes a "bulldog for the Buyer", unrestricted
by the Seller or Seller’s agent. Now they can make more demands, get a better
price and better terms of sale for the Buyer. Despite these advantages, some
Buyers are still reluctant to
sign. They don’t want to be "tied down"
or they may mistakenly think that getting several
REALTORS® to work with them will get them a
better home or deal. They won’t. Part of the strength of the industry is the
REALTOR® communication network.
A Buyer working with several
sales rep's will
quickly become a joke.
Without a contract, the
Buyer is clearly not a "Client". He/She
is a "Customer"
and when a good listing comes on the market either by word of mouth, e-mail from
another
REALTOR®,
or on the
MLS®, who do you
think the Buyer’s agent will notify first...the uncommitted Buyer
(Customer) or the contracted Buyer (Client?). A contract makes
a difference in other ways. For example, there are things the Seller may not
want disclosed to the Buyer such as their urgency to sell, which could
compromise their bargaining position. A
REALTOR® who
then discloses this information is in ethical violation and can be brought
before the Real Estate Council of Ontario (RECO) on charges. Some offenses are serious enough to have a
REALTOR®
license to practice suspended or revoked completely.
But the Buyer has
no such protections without a contract! Anything they say to an un-contracted
REALTOR®
may be passed along to the Seller. Why? Because, any
REALTOR® who works for the Buyer without a contract automatically
becomes a sub-agent for the listing broker, and is therefore working on behalf of
the Seller. Surprised? It’s all spelled out - in the listing
contract and in the "Buyer
Representation Agreement". A contract makes
the difference in whether you are a "Customer"
or a "Client"
in a real estate transaction. Which do you want to be?
If you are shopping for a home in the near future and would like
Future
Homes to represent you exclusively as a "Client" call us
today, we will
save you thousands of dollars!
and a whole lot of hassle. Please remember this
service provided through a "Buyer
Representation Agreement"
 costs you absolutely nothing,
our fee is paid by the seller of the property you purchase through
Future
Homes & Real Estate Ltd. Brokerage. Don’t settle to be just a "Customer"
expect and get more,
be a "Client" !
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