B.C. – You Don’t Have a Choice!!

UPCOMING CHANGES FOR CONSUMERS WHO ARE BUYING OR SELLING -

 YOU ARE NOT GOING TO HAVE A CHOICE AS TO WHO REPRESENTS YOU

 Mr. Michael Noseworthy, the Superintendent of Real Estate has given directions to the Real Estate Council of B.C. [RECBC] to implement changes that are supposedly for the protection of buyers and sellers. These changes are to be effective on March15th, 2018.

 We all know that Limited Dual Agency will be forbidden come March 15, 2018 as well. This means there is a ban on one REALTOR® representing a buyer and seller in the same transaction. Okay, we get it.

However, one of the major concerns to REALTORS® is the new rule with respect to what is called “double recusal”. Recuse means “to remove oneself from participation to avoid a conflict of interest.” Here is an example of how “double recusal” could apply if you are going to sell your house.

You, the sellers have decided on offering your home for sale with REALTOR® Mr. Agent. You interviewed three other REALTORS® and after serious consideration you selected Mr. Agent to represent you. 

Mr. Agent was highly recommended to you; has been in the profession for over 25 years, has a huge clientele base since his business is built on referrals from satisfied buyers and sellers and knows everything about the neighborhood where your home is located. He is perfect to represent you and you trust him.

You told Mr. Agent what you were hoping to sell your home for, you agreed to his marketing plan, you told him all your personal information, why you were selling and what you hoped to buy. You told Mr. Agent your mortgage amount owing and other confidential information.

You chose Mr. Agent because of his ethics, his professionalism, his negotiating plan and abilities. You trusted Mr. Agent and wanted him to represent you in the sale of your most important asset, your home.

You then asked Mr. Agent if he had any buyers in his clientele list that might be interested in buying their home. This is where the concern for the consumers comes into play.

Mr. Agent tells the sellers that yes, in fact he does have a couple that he just sold their home and he also knows another buyer that might be really interested as well.

HERE IS WHERE THE PROBLEM EXISTS

Mr. Agent must tell the sellers that he cannot represent either of his possible buyers because he also knows all the buyer’s personal information. Remember, he also knows all your confidential information. It is called “double recusal” [avoiding a conflict of interest re confidentiality].

The new rules state that Mr. Agent cannot represent you as the sellers and the potential buyers he knows, because he has confidential information about both parties.He will however, recommend the buyers to another REALTOR® to represent them.

This is all good unless these buyers really do want to make an offer on your home.They have seen many other houses for sale but now they love your home. They want their referred REALTOR® to make an offer on your property.

Here’s where it gets very complicated under the new rules and where you as sellers and/or buyers cannot choose your own representation for your real estate needs.You hired Mr. Agent to represent you with the most important and complex transaction of your life.

The primary agency duties Mr. Agent must uphold always are: loyalty, avoiding conflicts of interest, full disclosure and confidentiality.  The one duty that never expires is the continuing duty of confidentiality.

These new rules will take away the consumers choice of representation in the sale/purchase of their real estate.

Because Mr. Agent knows you and your confidential information if the REALTOR® representing the buyers brings you an offer on your home — according to the new rules, there is the problem of a conflict of interest. Mr. Agent knows both parties confidential information.

he rules mean that when the Buyer’s REALTOR® presents an offer, Mr. Agent is required to step away from representing you, the sellers. That’s right; Mr. Agent cannot represent you the sellers because of the supposed conflict of interest. 

Is that allowing you the consumer, to choose who represents you?

Even if you as sellers signed a disclosure that Mr. Agent does have confidential information, but he will not share that with you the sellers; that will not be allowed. He would still not be able to represent you.

Well, what if we even had the buyers sign they are okay with their referred REALTOR® representing them and to go ahead with Mr. Agent representing the sellers. No, this is still not allowed. So now you the sellers must wait until the Brokerage of Mr. Agent appoints another designated agent to step in for him.

Yes, you had hired Mr. Agent based on his knowledge, professionalism, ethics, recommendations, trustworthiness and most importantly on his negotiating skills to help bring you the highest offer possible. You have no option or choice of who can represent you if Mr. Agent also knows confidential information about a prospective buyer.

Did you know this was coming into effect March 15th, 2018? How do you feel about not having your own choice of who works for you when you are buying or selling?

The new rules are stating that you the sellers who hired Mr. Agent will now have to change to another REALTOR® who you do not know – how are their negotiating skills, what do they know about you and your concerns. 

This is the most critical negotiation of your lifetime and you cannot have the REALTOR® you originally contracted with look after your needs, negotiate on your behalf and explain step by step what is involved.

If there are subjects Mr. Agent won’t be allowed to advise you on their validity in the sale of your home; the length of time allowed for the subject removal, the date of closing [the day you get paid] – does it meet your needs and is there enough time between being paid and moving out to allow you to pay for the new home you are purchasing. 

What if there is an unauthorized suite that needs to be disclosed properly to protect both the sellers and buyers – does this new ‘fill-in’ agent know all about this?

Sure, let’s just change your representative in the middle of the most critical part of selling your home. Demanding Mr. Agent step aside from the negotiations because he may know some ‘confidential’ information about the buyers is a total disservice to you.

This newly appointed REALTOR® most likely knows nothing about the listing information and nothing about you the sellers – how is that protecting you? Who is looking after you – you chose Mr. Agent to represent and protect you throughout the sale of your property but due to the new rules you have absolutely NO CHOICE in the matter?

How is this fair to any members of the public?

This proposed new rule being brought down by the Superintendent of Real Estate and implemented by the Real Estate Council of B.C. eliminates the public’s choice of representation. Are you okay with it?

Please voice your comments/questions/concerns to the following regulatory bodies.

advisor@recbc.ca or info@recbc.ca

RealEstate@gov.bc.ca ATTENTION: MR. MICHAEL NOSEWORTHY

https://www.recbc.ca

RE/MAX #1 6 Years Running

 

RE/MAX continues to shine in the annual Entrepreneur Franchise 500 ranking of top franchises.

In addition to being the No. 1 ranked real estate franchise for the 15th time, RE/MAX climbed into the survey’s Top 5 for the very first time. It joined McDonald’s, 7-11, Dunkin’ Donuts and The UPS store in the elite five of household brand names.

More than 115,000 agents enjoy the competitive advantages of being with the industry’s top franchise brand. And who benefits from the skills of those agents? Homebuyers and sellers in countries around the globe.

Nobody in the world sells more real estate than RE/MAX, as measured by residential transactions. There’s a reason for that. And it starts with productive, hustling, all-in agents who strive to be the best at what they do.

VIREB Posts the Strongest December on Record

January Raindrops

NANAIMO, BC – The Vancouver Island Real Estate Board (VIREB) reports that on a seasonally adjusted basis, the board had its busiest December on record, with 667 housing units changing hands last month.

Sales of single-family homes increased by 35 per cent from December 2016. Annually, 5,612 single-family homes sold on the Multiple Listing Service® (MLS®) System in 2017 compared to 6,059 the previous year, a decrease of seven per cent. However, this reduction reflects the market returning to more normal levels from the unprecedented sales activity generated in 2016.

Inventory of single-family homes dropped to 762 in December, the lowest recorded since VIREB began tracking inventory in 1999. The supply of apartments and townhouses dipped by 13 per cent and 33 per cent, respectively. Diminishing housing supply and high consumer demand are driving rising benchmark prices of single-family homes, apartments, and townhouses in all markets.

The British Columbia Real Estate Association (BCREA) notes that the housing market in B.C. is thriving due to strong economic fundamentals, such as robust retail sales, job growth, and population growth. BCREA’s Fourth Quarter Housing Forecast states that the provincial economy is on track to expand by 3.8 per cent in 2017, the fourth consecutive year of three per cent or more real GDP growth. The cumulative effect has fuelled employment growth to its strongest performance in almost 20 years, with the provincial jobless rate at its lowest level in nearly a decade.

However, while provincial economic conditions appear to be on a sound footing, BCREA expects economic growth to slow in 2018, expanding at a respectable 2.8 per cent, but lower than we have seen in some time. The province’s housing market will face additional economic headwinds in 2018, with rising interest rates eroding affordability and Guideline B-20 making it harder for some buyers to qualify for a mortgage.

Janice Stromar, 2017 VIREB President, notes that VIREB’S record December shows that consumers are still highly motivated to buy a home, but she encourages sellers to list their property now before mitigating economic factors have an impact on housing activity.“My advice to prospective sellers is not to delay listing their home until the spring,” says Stromar. “The VIREB area has been a sellers’ market for a long time, but we know that it cannot continue indefinitely.”

That said, since the current VIREB market still favours sellers, connecting with a local REALTOR® is especially crucial in a competitive housing market.

“REALTORS have specialized knowledge of their communities that can help streamline the buying and selling process to ensure the best possible outcome for our clients,” says Stromar.

In December 2017, the benchmark price of a single-family home in the VIREB area reached $466,400, up 17 per cent from one year ago. (Benchmark pricing tracks the value of a typical home in the reported area.) The benchmark price of an apartment last month rose to $284,400, up 28 per cent board-wide from the previous year, while the benchmark price of a townhouse hit $370,700, a 23 per cent increase from December 2016.

The December 2017 benchmark price of a single-family home in the Campbell River area was $375,100, an increase of 20 per cent over December 2016. In the Comox Valley, the benchmark price hit $467,400, up 19 per cent from last year. Duncan reported a benchmark price of $418,000, an increase of 16 per cent compared to December 2016. Nanaimo’s benchmark price rose 17 per cent to $500,500 while the Parksville-Qualicum area saw its benchmark price increase by 16 per cent to $524,900. The cost of a benchmark home in Port Alberni was $249,800, up 16 per cent from one year ago.