Hi,
--> I was wondering about the "Roles & Responsibilites" of Buyer's Agent and a Seller's Agent and the relationship between them. (Job Function of Buyer's Agent vis-a-vis Seller's Agent)
--> What is the advantage of having a Buyer's Agent (from Buyer's Point of View) ? Apart from educating me about identifying a better deal, will it help me in negotiating the House Price as well.
--> If Buyer's Agent offers a Cash-Back - then what is the Cash-Back Percentage (a Buyer will get from the Buyer's Agent) ? Does most offer a Cash-Back ?
--> Is is wiser to buy thru a Buyer's Agent rather than the Seller's Agent ? And what would be the reasons ?
--> How to judge your Buyer Agent ? How to find someone you can trust ? What are the pointers ?
Your advice is appreciated
Regards

There is an article on Buyer Agency that I had submitted some time back. Please read it here:

http://www.canadiandesi.com/article.php?AID=59&SID=4


To read more about Seller Agent's role, visit my site:

http://www.realestate-ontario.com/agency.htm

Cash-back or lower property price, what do you want?

How does this sound, you are negotiating a property listed at $199,000, after some sign backs/counter offers etc. the seller says to your agent that the last price they can accept is $194,000. You agree and accept the offer.

How do you know that was the best price? How do you know that what was being told to you was right? All you got some $500 or so cash back or your agent paid your lawyer's fee.

A good agent will go many steps forward, he will show you many comparables and negotiate the best price for you. And it is quite possible that you end up buying the above property for $191,000 or lower. Strong effective agents DO NOT give kick backs but offer best service.

The above example is a hard fact and I can offer you live testimonials from some of my buyers, who had indicated some kind of cash back deal, before they actually saw the real value in working with a true, honest and professional Realtor. And there are many of us out there.

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Amit Kalia, Broker, REALTOR®
RE/MAX Real Estate Centre., Brokerage
independently owned & operated
100 City Centre Dr, Unit 1-702
Mississauga, ON L5B 2C9
Phone No.: 905-339-5111
Website: https://www.realestate-ontario.com/
Condo Blog: https://condopundit.com/blog/

Thanks Amit. Appreciated. Shaibal

Hi Shaibal,

Judging from your well described questions, I presume that you have done lots of research on the subject yourself.

While Amit has addressed Cash-back quite well, I would like to add my own views about the same here. The term "There are No Free Lunches" is quite prevalent in North America. You have to understand that none will give anything to you out of generosity. They will in fact make you pay for the same without you being aware of it. Cash-back in fact may be coming out of your own pocket. If an agent believes that he/she ALWAYS works in the best interest of the CLIENT, there is no need for him/her to offer any cash-back as he/she would have ensured BEST deal for their CLIENT, saving more money for the client than the cash back value.

In the world enundated with Real-Estate agents, it should not be difficult to spot the right agent. All agents can access MLS and find you the right (same) home. However, not all of them will be able to get you the home for its TRUE VALUE or less. NEGOTIATION is the BEST SKILL of a REAL ESTATE agent and if the person cannot negotiate a better commission for self (and has to resort to discount his/her services), you can well imagine how far this person would go in protecting your interests. Besides, their services may come with strings attached, like, mortgage provider, home inspector and lawyer must be of their choice.

While choosing an agent, ask them to show their track record of their negotiating skills. An agent should be able to show listings where they negotiated lower price for a home for their buyer compared to higher value sales of the IDENTICAL properties in the same neighbourhood. Similarly, if you are in the market to sell, then the agent should be able to show you how he/she manages to get higher price for the home compared to the neighbourhood. Sadly, agents discounting thier commissions are only after the business, not necessarily in taking care of their clients or offering value added business.

In regards to the job responsibilities of "BUYER'S AGENT" vis-a-vis "SELLER'S AGENT", they are predominantly the same, i.e. Fiduciary duties to their respective CLIENTS. They wll both have to work in THE BEST INTERESTS of their clients (which are the opposite for both). Their dealing MUST be FAIR and PRIVACY & CONFIDENTIALITY is to be maintained throughout the business. Once the CONTRACT is signed, a Customer then becomes a CLIENT and the agent MUST abide by the PRIVACY & CONFIDENTIALITY terms of the contract even after the expiration of the contract. Absence of a Buyer Agency contract means that the Agent is NOT representing buyer's interests and may use any information available to him/her in the negotiating process to the Buyer's detriment though the Agent is still expected to provide ethical and fair servces to the Buyer. In my opinion, if you commit to an agent, I am positive the he/she will be equally committed to YOUR INTERESTS.

You have also raised an interesting point on whether it is wiser to buy through a Buyer's Agent rather than a Seller's Agent. Again, I would be more happy for you to believe that this is not true if I am the Listing Agent (Seller's Agent) and you are a buyer. However, be realistic. What relationship did you have with the Seller's agent before you saw this house? Nothing, right?! So what are the chances that this agent (who owes contractual obligations to the Seller) will offer you a better deal? Most people are under an illusion that the Seller will save Buyer Agent commission and will pass that on to the Buyer. Wrong again! Statistics show to the contrary. In most cases, the beneficiary of the deal is the Seller and then the Agent. If however you already had exisitng established relationship with an agent and you proceed to buy a property listed through him/her, the agent has an obligation to protect your interests.

The most cruicial aspect of all the real estate transaction is the Buyer Agency Agreement. Seller always has one in place when they put their house on sale. They commit to the services of ONE REALTOR. Buyer agency does the same for the buyer.

Hope you will find the following useful.

What is a Buyer Agency?

A real estate brokerage representing the interests of the buyer. Buyer agency can be established by implication, as well as a written agreement/contract. Buyers seeking exclusive representation usually do so through an agency agreement. This relationship is the counterpart of seller agency with the same agency principles and practices applying. A representative of the buyer must use professional negotiation skills, seek appropriate properties that meet the buyer’s needs, describe the merits and defects of any selected property, keep information confidential concerning the buyer, and generally act in the buyer’s best interests. The hallmarks of this relationship are good faith, full disclosure, competence, obedience, and accounting. The buyer and the brokerage will enter into a signed buyer agency agreement that details their relationship. The seller usually pays all commission to the listing brokerage who, in turn, forwards the appropriate portion to the buyer’s brokerage. Alternatively, the buyer’s brokerage can be paid directly by the buyer and, therefore, this amount does not form part of the sale proceeds. In most transactions, the commission to the buyer’s brokerage is paid via the listing brokerage from the proceeds of the sale. Payment procedures for the payment of commission will vary by provincial jurisdiction.

What is a Seller Agency?

Establishes a relationship in which the brokerage and its salespeople represent the interests of the seller exclusively. Sellers typically give authority to a brokerage to sell their property by signing a listing agreement/contract that establishes a formal agency relationship between the seller and the real estate brokerage. This agreement/contract sets out what the seller instructs the brokerage to do and what services are provided under seller agency. Further, it provides that representatives of the seller will use their professional negotiation skills to seek qualified buyers and generally promote the listed property, while keeping information concerning the seller confidential and always acting in the seller’s best interests. The hallmarks of this relationship are good faith, full disclosure, competence, obedience, and accounting. The seller has traditionally paid a commission directly to the agent. The listing agency then pays any brokers or salespeople within its employ and, if applicable, any co-operating brokerages involved in the transaction.

What is Dual Agency?

The same brokerage has an agency relationship with both the buyer and the seller in a real estate transaction. Dual agency also occurs when different salespeople represent buyer and seller, and are employed by the same brokerage, including those who work in different branch offices. The brokerage or its representatives must advise the seller and the buyer of the dual aspect of representation and must be impartial when representing both parties. Both buyer and seller must give their informed consent to this form of representation.

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Rajeev Narula, Broker, REALTOR®
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK

Hi Rajeev :
Thank you very much for your kind encouragement.
I am still a novice in understanding the nuts&bolts of buying a house.
I will go thru the information that you have sent me. After I get a little comfortable with the Home Buying Process - I will contact you for more help.
Appreciated
Shaibal

Hi Shaibal,

Don't worry about being novice as there is always a first-time. Home buying in Ontario is not so difficult and you can achieve your dreams of owning a home with the help of a knowledgeable REALTOR, who can take out the kinks off the process and make it more of a fun than a daunting task.

Good luck and don't hesitate to ask any queations that come to your mind, whether through PM, phone call or Posting. The last option will also help other CDs if they are also in the same boat as yourself.

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Rajeev Narula, Broker, REALTOR®
ACE TEAM REALTY INC., Brokerage
10 Kingsbridge Garden Circle, Suite 704
(Opp Square One - HWY10/403)
Mississauga, ON L5R 3K6
Bus: 1-888-355-3155 Ext. 300
Fax: 1-888-443-3155
Email:
Web: http://www.RAJEEV.ca" rel="nofollow">LINK