Updated June 26, 2019 by Mike Stewart PREC
This post is part of a series discussing Tips for First Home Buyers in Vancouver. Remember, there is no such thing as a stupid question! I strongly encourage questions and comments!
You’ve found your Dream Home, What next?
You finally found a property you want to buy and you have an idea of what its worth with a Comparative Market Analysis as discussed in Vancouver First Time Home Buyer Tips Episode 5. You and your Realtor will need to draft up an offer in writing to signal to the Seller that you are serious about buying the property.
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STOP! Time to for the Realtor Disclose EVERYTHING to the Buyer IN WRITING!
Before a Realtor can prepare an offer or Contract of Purchase and Sale as its officially referred to in British Columbia, several very important documents need to filled out and signed by the Buyer. These documents are a constant source of confusion and questions from First Time Home Buyers and its a major reason I created the First Time Home Buyer Guide for Vancouver.
What needs to be filled out and signed and what it means!
- Disclosure of Representation in Trading Serves (DORTS) – A home Buyer and their Realtor (or Buyers Agent in the Jargon) enter into whats called the Agency Relationship when they start to work together. This document needs to be explained by the Realtor and signed by the client once the Realtor starts working with the client. This document lays out the obligations and duties the Realtor owes a Client and the Rights of the Client. The salient points of the Agency Relationship as laid out in the Disclosure of Representation in Trading Services (DORTS) (the link to the left takes you to an example of the document and a video explanation) are as follows; 1) Loyalty. The Brokerage and Realtor must put the clients interests first even before the interests of the Realtor 2) Avoid conflicts of interest, which is basically the Realtor must avoid any situation that would affect their duty to act in the clients best interest 3) Full Disclosure – The Realtor has an obligation to all fact which may affect a clients decision 4) An obligation to keep the confidences of the principal.
- What It Means – 1) The Realtor works and acts for the Client and only the Client, no matter who is paying the Realtor 2) The Realtor has an obligation to tell the Client EVERYTHING about ANYTHING terms of the deal! Including things the Realtor may not want to tell the client. Full Disclosure. 3) The Client/Buyer is the BOSS! No ifs, ands, or buts!
- FINTRAC – Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) gathers, analyzes, assesses, and discloses financial intelligence and requires all Realtors in Canada to ascertain the identity of the their clients and submit it to FINTRAC. (the link to the left takes you to an example of the document and a video explanation)
- What It Means – Big Brother/the Government of Canada wants to know if buyers of real estate in Canada are funding terrorism or laundering money and wants all of the personal information of these Buyers and will throw these Buyers and their Realtors in jail for not giving this personal information.
- Disclosure of Remuneration – Realtors have a duty to disclose to their Clients in writing how the Real Estate Agent is getting paid, by whom, and how much. All Buyers working with a Realtor must initial or sign a Disclosure of Remuneration.
- What it Means – For First Home Buyers, the Disclosure of Remuneration is very often when they come to understand how their Buyers Agent gets paid. This is how it works: The Seller offers to pay their Sellers Agent (Listing Agent) a commission to sell their property. The Sellers Agent then offers about half of this commission to Buyers Agents to bring their Buyers to bring accepted offers that Complete. The Buyers Agent has to get it in writing that the Buyer is aware of how much the buyers agent is getting paid and by whom. PLEASE NOTE – Buyers do not pay the Buyers Agent! For a more detailed explanation of check out my Disclosure of Remuneration Video.
- Privacy and Consent Document – Realtors have an obligation to maintain their clients privacy and and to be transparent on how the clients information and data is used and shared. The Privacy and Consent Document confirms the requirements in writing to the client.
- What is Means – 1) The Real Estate Agent CANNOT talk about the clients affairs with ANYONE, unless given permission by the Client, 2) The Realtor can’t share info about their client or their motivations. 3) The Realtor need permission from their client to disclose their personal information to anyone. 4) The Realtor must be transparent in how the clients information & data is shared and used.
Once all these documents are signed and filled out its time to prepare the offer or Contract of Purchase and Sale, so stay tuned for Episode 7 of the First Time Home Buyer Tips Vancouver: The Contract of Purchase and Sale Overview!
I Strongly Encourage Questions and Comments!