Beware! Resale buyers’ agreements

Now that the federal Competition Bureau has successfully opened up the MLS system to homesellers without having to pay huge commission rates to agents, the TREB (Toronto Real Estate Board) has come up with another scheme to protect their exorbitant commissions.

Under the guise of offering better service, brokers are trying to convince prospective buyers to sign exclusive contracts with them. These contracts basically ensure that any home the prospective buyer offers to buy will be subject to broker commissions.

For example, if a prospective buyer finds a home offered through one of the emerging low fixed-fee or low commission brokers, who now have unfettered access to listings on MLS, that prospective buyer may sign a buyer agreement. If the agreement is signed, he won’t be able to buy that home unless the vendor agrees to pay more commission than he originally planned. Since many vendors are unwilling to pay more than what they initially planned, a lot of folks can’t buy homes.

So I urge you, before you consider signing contracts with brokers, to be aware of what you’re really getting yourself into. It may look good on paper, but we must ALWAYS read the fine print.

Be careful,
John Amardeil

1 Comment (+add yours?)

  1. Trackback: Realtors & Buyers’ Agreements «

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