The Documents Involved When Selling Real Estate
WORKING WITH A REAL ESTATE AGENT
Buyers and sellers are presented with this brochure at the earliest contact with a real estate agent. Industry regulations have now made it mandatory for agents to explain at the beginning of the client relationship the options of agency representation you have, and to disclose the capacity in which the agent will be working with you: i.e. as a buyer's agent, a seller's agent, as a sub-agent to the seller, or as a dual agent. The agent will then ask you to sign a statement acknowledging that this disclosure of agency representation has taken place. He or she will then tear off and keep the signed statement and give you the brochure for future reference.
Signing the disclosure statement in the Working with a Real Estate Agent brochure does not bind you to any obligation to that real estate agent. It merely confirms that you have discussed your agency representation options with the agent. You will have a contractual arrangement with your agent when you sign the listing agreement (as a seller) or the exclusive buyers' agency agreement (as a buyer).
MLS® LISTING CONTRACT
The Multiple Listing Service® Listing Contract outlines the terms of the listing contract, including the length of time for the listing, the price, the commission to be paid, all the parties to the listing, the address and the legal description of the property to be sold, how the seller is to be paid, the preferred possession date, the financial obligations, and other information regarding the property.
The listing agreement is the seller's agreement with the listing agency, not the salesperson individually. If the salesperson leaves that company, it is up to the seller and the listing company to decide whether or not the listing will go with the salesperson, or whether it will stay with the original company and be assigned to another salesperson.
The standard MLS® Listing Contract explains that the seller is liable to pay a commission if the listing agent or a cooperating agent brings an offer which meets all of the stated terms and conditions of the seller.
As with other services, there is HST payable on commission, so when you are calculating your proceeds, take that into consideration.
DATA INPUT FORM
The Data Input Form is the sheet the REALTOR® fills out with all of the information about the property, such as number and size of rooms, lot size, construction type, house style and more. The data is entered into the MLS® database, where other REALTORS® are able to search for specific criteria. As well, this form includes any descriptive comments that will be included for the public websites or private comments, only for other REALTORS®.
EXCLUSIVE LISTING CONTRACT
The Exclusive Listing Contract is used when a property is not going to be on the Multiple Listing Service®. The listing is publicized by advertising and the sign alone, without the benefit of the catalogue/computer. At times, the seller will prefer an exclusive listing in the belief that there will be fewer "lookers," rather than buyers. Actually that is not the case. An exclusive listing is often overlooked by REALTORS® working with buyers, because the first place they look is in the MLS® catalogue/computer. The more people who know about a property, the greater the chance of a larger number of serious buyers viewing the property and making offers until the acceptable price and terms are reached.
A Listing Amendment form is used whenever a change is made to the original MLS® or Exclusive Listing Contract. This may involve extending the date, changing the price, altering wording on the print-out, correcting measurements or tax or financial information, etc. It must be signed by all owners, as on the original listing contract, as well as by the manager of the listing agency.
From time to time a listing is cancelled for various reasons. The Listing Cancellation form used in most areas has a preprinted clause which states that if the property sells within 60 days of cancellation, or before the natural expiry of the listing (whichever comes first), the seller is liable for commission. The reason behind this clause is that, at times a seller may be told by a buyer to cancel the listing so that the seller will not be liable for the commission and the buyer will pay less. This dishonest approach tries to cheat the REALTOR® out of a commission, even though the REALTOR® may have spent hundreds of dollars on advertising and hours at open house and other showings trying to sell the house.
If the seller is very dissatisfied with the service of a REALTOR®, the seller should speak to the manager of the listing agency and outline his/her concerns. The listing agency will make every effort to achieve satisfactory results.
HOLD ACTION FORM
At times, it is necessary to stop the marketing of a property for awhile because of illness or other personal circumstances of the seller. By definition, when your home is listed on MLS®, all REALTORS® have an opportunity to find a buyer for your property. The Hold Action Form communicates your wishes to all REALTORS® who have access to MLS® that you wish to delay the sale of your home.
PROPERTY DISCLOSURE STATEMENT (PDS)
The seller is legally responsible for the accuracy of the information which appears on the PDS. The seller indicates his or her knowledge of various aspects of the property, defects of which he or she is aware, and any upcoming expenses (as in special assessments in strata-titled properties).
Not only must the answers be correct, but they must be complete. The buyer will rely on this information when the buyer contracts to purchase the premises. Even if the PDS is not incorporated into the Contract of Purchase and Sale, the seller will still be responsible for the accuracy of the information on the PDS if it caused the buyer to agree to buy the property. The REALTOR® is not permitted to fill out the PDS on behalf of the seller. The buyer receives a copy of the PDS after signing and dating it. The PDS does not cover every aspect of the property. The buyer must still make the buyer’s own inquiries after receiving the PDS. The buyer can hire an independent, licensed inspector.
LIMITED DUAL AGENCY AGREEMENT
This form is used when the agent represents both the buyer and the seller in a single transaction. It is used when the situation involves either one salesperson who represents both the buyer and the seller, or when two salespersons from the same company are involved.
This agreement modifies the prior Listing Contract and the Buyer's Agency Contract (or verbal buyer's agency agreement) and gives the agent the authorization to represent both parties in a limited capacity. It authorizes the agent to maintain both parties' confidences regarding motivation, negotiating positions and personal information (unless either party gives the agent written permission to disclose such information).
CONTRACT OF PURCHASE AND SALE
The Contract of Purchase and Sale standard form is the basic contract signed by the parties (the sellers and the buyers). It outlines every aspect of the transaction, including the price, the terms and conditions, the dates, the inclusions and exclusions, the handling of existing tenancies, the deposit and increase (where applicable) and other legal matters as described in the preprinted contract and added as clauses.
ADDENDUM (WITH PRINTED CLAUSES)
The basic contract will be accompanied by a special addendum form with preprinted clauses where there is either financing to be cleared from the title before the seller can provide clear title, or where there is financing to be put into place after the title is registered in the buyer's name.
ADDENDUM (WITHOUT PRINTED CLAUSES)
The basic blank addendum for is used to write additional clauses on the contract when there is not adequate space to do so on the contract itself. When that has been done, the buyer signs this form indicating that this clause is being removed.
AMENDMENT TO CONTRACT OF PURCHASE AND SALE
This form is used to remove conditions (subject removal) when they have been satisfied, as in the situation where a buyer has to find financing by a certain date.
Note: The Above Information Has Been Distributed To The Public By The FVREB. For More Information Please Visit www.fvreb.bc.ca