Realtors in Ontario have been found to be discouraging home purchasers from going for houses with lower commission rates as found in an investigation by CBC's marketplace. This practice is referred to as "Steering" in the industry. It is an illegal practice for real estate agents who are supposed to act for clients' best interests.
A Prohibited Practice
The real estate business brokers act (REBBA) prohibits this practice in their code of ethics section 19 which regulates real estate sale and purchase in Ontario.
If the code of conduct is not followed, real estate agents can face acute consequences such as losing their license, payment of fines etc. They might even be jailed on the basis of the extent of offence. The CBC report has made the Toronto Regional Real Estate Board, Real Estate Council of Ontario and other real estate bodies reach out to members to emphasize that steering is a prohibited practice. But consumers might still be concerned that the realtor they hire might not be acting in their best interests. As a home-buyer, these are some rights that you should have an understanding about.
Buyer's Rights against Steering
In most cases, home buyers do not have to be concerned about paying the BRA commission which is generally offered by the seller in-full. If a property that is listed for sale for a lower commission than stipulated in the BRA of a buyer, he could be in a tough situation.
In case the property purchaser wants to go ahead with buying the home, he is responsible for:
* Either topping up the payment of the agent,
* Or making negotiations with the seller for inclusion of a higher commission in the property deal
* Or making re-negotiations with the realtor of the purchaser to agree on a lower payment than originally agreed on.
Properties with lower commission can lead to a negotiation circumstances which might be difficult for property purchase to deal with. That being said, the purchaser is the one who needs to choose whether to give up on buying a home due to this.
How Can Property Buyers Keep Themselves Safe From Steering?
You should have proper knowledge of your Buyer’s representation agreement (BRA). It is the basis of your rights as a property buyer. Your realtor is responsible for ensuring that you understand the whole agreement completely. You need to ask as many questions as required while reviewing this document with your real estate agent. It is important for you to have a clear idea about the obligations that your realtor has towards you as well as the obligations you have towards your realtor.
It is also important to find out how your realtor has handled properties with lower commission earlier. An honest agent will definitely tell you how exactly he has dealt with a similar situation if you are thinking of buying a property with a lower commission than what is mentioned in your buyer's representation agreement (BRA).
With the implementation of these important tips, it can be easier to safeguard your interests and keep yourself protected against the malpractice of steering.
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Author Resource:-
Rick advises people about real estate, property investment and affordable housing schemes. Visit this website if you are looking about homes for sale in London, Ontario.