First Time Buyer Tips Vancouver Episode 6: Vancouver Real Estate Disclosure Documents
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More Tips for First Time Home Buyers at this link.
When you have a serious interest in purchasing a particular property, your Realtor will draft and submit an offer to the Seller. Your offer is officially called a “Contract of Purchase and Sale”. But before your Realtor prepares this document, your Realtor must disclose everything to you, the buyer, in writing. In Vancouver, British Columbia, real estate disclosure is done via 3 very important documents:
1. Working with a Realtor – A home Buyer and their Realtor or Buyers Agent enter into whats called the Agency Agreement when they start to work together. This document lays out the obligations and duties the Realtor owes a Client and the Rights of the Client. The salient points of the Agency Relationship as laid out in the Working with a Realtor Brochure (the link to the left takes you to an example of the document and a video explanation) are as follows:
1) Undivided loyalty. The Brokerage must protect the principal’s negotiating position at all times, and disclose all known facts which may affect or influence the principal’s decision.
2) To obey all lawful instructions of the principal.
3) An obligation to keep the confidences of the principal.
4) To exercise reasonable care and skill in performing all assigned duties.
5) To account for all money and property placed in an Brokerage’s hands while acting for the principal.
* What It Means – The Realtor works for the Client (First Time Home Buyer) and only the Client, no matter who is paying the Realtor and has to tell the Client EVERYTHING! 2) The Client/Buyer is the BOSS! No ifs, ands, or buts! 3) The Buyers Real Estate Agent CANNOT talk about the clients affairs with ANYONE, unless given permission by the Client, 4) The Realtor has to do their job right or face serious consequences 5) Everything given to the Realtor is the Realtor’s personal responsibility i.e. deposit cheques, keys, anything.
2. FINTRAC – Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) gathers, analyzes, assesses, and discloses financial intelligence and requires all Realtors in Canada to ascertain the identity of the their clients and submit it to FINTRAC. (the link to the left takes you to an example of the document and a video explanation)
* What It Means – Big Brother/the Government of Canada wants to know if buyers of real estate in Canada are funding terrorism or laundering money and wants all of the personal information of these Buyers and will throw these Buyers and their Realtors in jail for not giving this personal information.
3. Disclosure of Remuneration – Realtors have a duty to disclose to their Clients in writing how the Real Estate Agent is getting paid, by whom, and how much. All Buyers working with a Realtor must initial or sign a Disclosure of Remuneration.
* What it Means – For First Home Buyers, the Disclosure of Remuneration is very often when they come to understand how their Buyers Agent gets paid. This is how it works: The Seller offers to pay their Sellers Agent (Listing Agent) a commission to sell their property. The Sellers Agent then offers about half of this commission to Buyers Agents to bring their Buyers to bring accepted offers that Complete. The Buyers Agent has to get it in writing that the Buyer is aware of how much the buyers agent is getting paid and by whom. PLEASE NOTE – Buyers do not pay the Buyers Agent! For a more detailed explanation of check out my Disclosure of Remuneration Video.
Once all these disclosure documents are signed and filled out, then its time to prepare the offer or “Contract of Purchase and Sale”. This will be covered in Episode 7. Stay tuned!
I Strongly Encourage Questions and Comments!
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