Time for a practical approach to agency
BY JOE BARKER
I recently attended one of the Ontario Real Estate
Associatin courses advertised as A Practical Approach to Agency. I approached the event with the intention of
learning about the new forms and how to use them effectively.
I understood the information presented and got my three
credit points, but unfortunately found that it had little to do with being a
practical approach. I asked the following questions:
1. Why is it mandatory for us to present the information in
the Agency Pamphlet to the seller, get their signed acknowledgement and then cover the
same ground with the listing form they will also sign?
2. Similarly for buyers, why have them sign both the Agency
Pamphlet and the Buyer Agency Agreement?
The only answer I received to these questions was that it is
like when you drive a car, you wear a seat belt. You need the protection and it
is the law, so you must do it.
We were shown a video on the subject of agency and
disclosure with emphasis on protecting the public, but it is really just about
protecting our own butts. What credibility do we have when we ask them to sign
forms that require them to acknowledge statements like the following added
paragraph in the New Buyer Agency Agreement that says: “I acknowledge that
I may not be shown or offered all properties that may be of interest to
me.” Before signing this form, the buyer may well ask, “What is this? An
advance waiver for not doing a good job?”
An added paragraph in the new listing form asks the seller
to state: “I acknowledge that you may be listing other properties that may
be similar to my property, and you may market such properties without any claim
by me of conflict of interest.” What's the problem? Here I thought they
were listing their property with me because they know I am in the real estate
business and we have signs on a number of properties.
Our forms have become a litany of the collective paranoia of
the industry and the imaginings our legal advisors. Can we honestly present
these forms to the public without telling them that this is really all about
trying to protect ourselves from every possible eventuality that the most
paranoid among us can imagine?
Here is a new one. What happens if I am taking a buyer out
to look at a property and a black cat crosses our path? Depending on the
superstitious bent of the buyer, I could be in big trouble. Or should have a
Waiver of Responsibility for Bad Luck Resulting from Black Cat Encounters added
to the Buyer Agency Agreement?
How many sheets of paper do we really need to handle each
seller or buyer transaction? Our current listing form (Niagara Falls Fort Erie
Real Estate Association) is three pages. The added paragraphs for the OREA 2001
format will probably make it a four-page form.
The Appraisal Institute has a two-page Appraisal Report
Form, while the OREA form is four pages. Is it that we have more legal advice
than other organizations or is it that we just take their advice too
Let’s also take a look at the Sellers Property Information
Statement. Here we have the two-page list of the questions for us to ask the
seller about their property and have them place initials in the appropriate box
beside each question, plus place their full signature and date on page two. It
is my opinion that half the questions on page one of this form fall into one of
the following categories:
1. Questions that the seller does not usually know. The
salesperson may know the answers to these questions or may need to find the
answers. But the seller does not know the answer and it is the seller who is
being asked to sign the form.
2. Questions that so seldom apply to any of the properties
we list that it wastes our time
to deal with it on every listing.
3. One question seldom has an answer. It is: “Does GST
apply to this transaction?” Of course, the seller does not know if GST
applies. The salesperson often finds it difficult to be sure whether GST
applies and the government GST office will often not give a reliable answer.
How many of these Seller Property Information Statements are completed with
anywhere near the degree of diligence intended by the designers of the form?
In the 20-plus years I have been in this business, I and/or
the office I manage have had very few legal proceedings launched against us. I
will not go into any detail on the nature of the disputes, lest someone decide
to protect us by adding a few more clauses and pages to our paperwork. I can,
however, say that none of the new forms would have made it possible for us to
have avoided those legal battles we did have.
I hope that most real estate salespeople are not ready to
accept that we must get forms signed because it is the law of our governing
body unless we also have some confidence in the logic of the process. Yes, we
must handle agency and other issues in our forms, but our current bundle of
overlapping paperwork is, in my view, a major overkill.
Joe Barker is a broker with Prudential Key‑Crest Realty in
Ridgeway, Ontario. (905) 894‑4014