Are you looking at buying a home in this CRAZY market of Multiple Offers?

The other day I received a phone call from a buyer that saw one of my listings. We chatted a bit and he asked a few questions about the home. He liked the home and asked if he could view the property. I informed him to just have your REALTOR log into our REALTOR listing portal and schedule a viewing. Because of COVID, all viewings are in 30 min increments and you need to be qualified and sign forms before viewing any property. He replied he did not have REALTOR and that it was his practice (and in my best interest) to show him the home so I could double-end my commission. To say the least it thru me that there are people out there who still believe this misconception. Especially in today's world of multiple offers and BUYER REPRESENTATION. 

 My response - STOP calling that PRETTY FACE on the FOR SALE sign, you are putting yourself at a disadvantage, and here is why:

When shopping for a home, you will most likely come across a property for sale that is perfect, and chances are there is someone else who wants it.  In fact, there are probably several other buyers who want it and if there is an offer date on the listing, it will most likely have multiple offers. 

You get excited and think to yourself, how can I get an advantage over others?

I know I will call that REALTOR on the FOR SALE sign they may give me some inside information that another REALTOR can not possibly know and they can double end their commission. Making it a win win for me and the REALTOR! I will be the perfect buyer!   Not so fast!

That pretty face on the FOR SALE sign most likely is an ethical REALTOR and by rights has signed a listing agreement with the seller to represent them to obtain the best possible price for the seller, not the buyer!  Real Estate Brokers Act dictates that when a REALTOR enters into a signed Agency Agreement they have a “duty to their principle”!

Their principle is the Seller – NOT THE BUYER!

REALTORS are bound to a code of ethics written in the REAL ESTATE BROKERS ACT (REBA) and must conduct their business accordingly. If caught acting in contravention to this act they can and will be punished by the Manitoba Securities Commission. REALTORS are held to a high standard and conduct their business within this act.

In the “good ole days” a REALTORS sole role was to sell a property.  Realtors were regarded as mere salespeople who received a commission for selling houses. Today that standard of care has changed. REALTORS today are regarded as your consultant who helps their client achieve their goals of homeownership. That standard of care goes beyond just opening a door, showing a home, and writing a contract.

REALTORS have a duty to the clients they represent and that role is distinct between a BUYER and a SELLER. With the current situation of Multiple Offers, it is more important now than ever before that you have someone that knows how to write offers, handles terms and condition to the best of their ability for both buyers and sellers.

This standard of care in the REAL ESTATE industry had to separate the role of REALTOR to be fair to both the buyer and seller.   Buyers were feeling taken advantage of by not knowing the full extent of the law. By the time the offer crossed over into the lawyer's hands the deal was done and too late to make any changes. Many times the buyer would blame the REALTOR for overpaying on a home or excluding an item that should have been included. As a result, the REAL ESTATE industry decided to separate the roles of a REALTOR and have both parties represented fairly.

 Today there are 2 types of REALTORS: 

• LISTING AGENT that represents the seller and their best interest. 
• BUYING AGENT that represents the buyer and their best interest. 

These two types of agents are now legally bound by agency representation. First and foremost this agency must be disclosed on the offer before buying or selling a home. However, there are still circumstances in Manitoba when a LISTING AGENT can and does represent both the Buyer and Seller, but in a LIMITED CAPACITY.

Both parties must acknowledge and give consent of representation. This is where a REALTOR has you sign a form called “Acknowledgement of Limited Joint Representation”.   This form of agency is fine when there are no other offers on the table and negotiations occur between just one buyer and a seller. The offer is written fairly by the listing agent and is presented to the seller to consider and reply. No other information or advice can be given in this situation.  

In a multiple offer situation, this becomes very tricky! In a Limited Joint Representation situation with multiple offers, the listing agent is putting themselves in a conflict of interest and needs to be careful where their duty lies and how they conduct themselves with each party. 

In Multiple offer situations and Limited Joint Representation, a LISTING AGENT provides limited service to both the buyer and seller when negotiating with other agents with their offers.   When multiple offers are presented along with yours written by the LISTING AGENT it puts the LISTING AGENT in conflict with not only you the buyer but with the seller. The other agents now have the upper hand in that they are free to speak to their clients. You and the Seller however are not.

It begs the question.... Where does the LISTING AGENT's loyalty lie? With You? The other Agents? The Seller? Or themselves? 

The LISTING AGENT is now put in a situation where both the seller and the buyer are at a disadvantage because the level of service is limited. The other buyers who have their own REALTOR have the advantage because they have access to information and full service that you and the seller do not have.

Here is an example of the limited-service:

If you are a buyer and you call the listing agent to write up an offer, all the LISTING AGENT can do is provide information on the property and write you the offer. They can not give you any advice on what to write, or how to write conditions in an offer that best suits you. They are limited in what they can do and say to help either of you. If you are in a multiple offer situation they need to negotiate with the other agents as well who are representing their clients. When negotiating with the other REALTORS the LISTING AGENT can speak freely with the SELLER, but not when dealing with your offer.

If you have a BUYING AGENT representing you in negotiations, they now have the flexibility to find out what similar homes in the area recently sold for, strategize with you and your lender with financing conditions, discuss deposits, clauses, possession dates, what inclusions or exclusion you put in the offer, etc, etc. overall your agent is looking at what is best for you. Not the Seller!

This may seem irrelevant to you at the time until it becomes an issue.  Why put yourself at a disadvantage?

Hire a REALTOR you can trust and will act in YOUR BEST INTEREST, not the SELLERS! And don't limit yourself with information that can make the difference between being the Winner of the Mulitple Offer situation or the loser of the perfect home.

If you would like to discuss more what a BUYER AGENT can do for you, please call me I am always willing to give you my time and advice so you can make an informed decision about buying or selling a home. The advice is FREE and the information is invaluable!

Call me and find out how I can help you with buying or selling a home.

Tony Rinella Ethos Realty

204-771-3866