There’s a growing misconception that buying from the listing agent means getting a better deal. In many cases, buying from the listing agent saves the Seller money, and causes you unnecessary risk. I’d say 95% of sales close without a hitch, but it’s the 5% that will put you through the strainer. Did you know there are over 190 forms relating to the sale of real estate in Ontario? Now we don’t use all of them, but we gosh darn know them, and when to use them. In the 5% of sales that run into issues, if there is a single mistake in the contract, a single timeline past, or a single signature or initial out of place, it can spell out disaster.
Before we outline those risks, let me explain how real estate works in Ontario.
When you hire a real estate agent, you’re actually hiring their company to represent you. Our clients are represented by Sotheby’s International Realty Canada Brokerage, and Sotheby’s as a brokerage is working in your best interests. This is where we might insert that the brokerage your agent works for is important…
When you hire a real estate agent, and brokerage, they are legally required to:
- promote your best interests (we call this fiduciary duty)
- treat you ethically and fairly
- ensure an arms-length transaction
If you decide not to hire an agent. (We’re not biased, but realtors are licensed, insured, educated, and regulated.) You can expect fair and honest representation from the listing agent, but it ends there.
The listing agent is legally obligated to tell you material latent defects. IE, if the house has mold or the basement is shot. But, if you believe you can build a garage on the property, it’s not the listing agent’s job to tell you that you can’t. That is the buyer’s realtor’s job, or yours if you don’t have a realtor.
The listing agent isn’t trying to sell you the right house, they are trying to sell you their listing.
You also lose your distance in the negotiations. When you’re buying a home through a Realtor, the sellers do not know your motivation. If the seller’s agent knows your motivation to move, and your budget, chances are they are sharing that information with their sellers in an effort to push up the price.