When you pay a realtor to sell your home, a portion of that money is going toward numerous fees your agent pays every year just to be a licensed realtor.
We all pay to belong to a brokerage – in my case, Century 21 Bamber Realty. We also pay to be a member of the Calgary Real Estate Board. This gives us access to our local Calgary & area MLS system as well as our lockbox system and lots of other support.
A third organization we pay every year is the Real Estate Council of Alberta (RECA). They are in charge of the education and licensing of every realtor in Alberta. They also handle our errors & omissions insurance, complaints from the public, lobbying the government and more.
One of the services RECA provides is the standard contracts we use every day – contracts for listing and selling houses and all of the schedules, addendums and waivers that go along with them.
If you have bought or sold a house, you will know that there are many pages worth of documents to sign with your realtor. In most cases, there are no problems during the transaction and these clauses pass you by without too much concern. However, if an issue arises either between buyer and seller or between a realtor and their client, the exact wording and structure of these contracts becomes crucial to the resolution of the conflict.
Thankfully, RECA is constantly revising these contracts, taking into account recent cases that have gone to the courts and feedback from real estate industry members to try and make the contracts as easy to understand, balanced, clear and thorough as possible.
The purchase contracts are designed to be equally protective of buyer and seller.
So when you pay your realtor, you are also paying an extremely intelligent team of lawyers that are working every year to make the documents you use to protect you as a consumer, better.
New contracts from RECA are coming out later this month and, although they have all of the main sections and clauses as the current contract, there are some tweaks and improvements.
Some of the changes are merely housekeeping items, to improve wording or the order of clauses in the contract. Some are to ensure nothing is missed, such as having a legal spouse that is not on title (but still has “dower rights” to the property) sign the contract.
Some are to allow for common issues that arise (e.g. condominium documents that are not provided by the seller to the buyer in time for them to review prior to their condition deadline – the new contracts grant an automatic time extension).
Some are elaborating or clarifying clauses that were hard to interpret, such as what kind of property defects need to be disclosed by the seller. The new wording reads: “Material Latent Defect means a defect in the Property that is not discoverable through a reasonable inspection and that will affect the use or value of the Property”.
Part of my job is to be familiar with the legal terms and obligations in these contracts so that I can best advise you, as buyer or seller. This helps keep your focus on the fun part – house shopping!