I’m planning to sell my house. What are some things I should know first?
Whether you’re moving to accommodate a growing family or to downsize, selling your home is a significant undertaking. To help you make informed decisions, be sure to do your research. Here are few things to get you started:
Consumer protection: It’s important to know that the real estate brokerage industry is regulated in Ontario. This means consumers who work with a registered real estate brokerage are offered protection under the law.
With a few exceptions, anyone trading in real estate must be registered with the Real Estate Council of Ontario (RECO) as a salesperson or a broker, and to offer their services only through a brokerage.
Those aspiring to trade in real estate must complete a series of mandatory courses. If they pass, and then register with RECO, they must also continue to develop their skills through mandatory continuing education.
Once registered, salespersons must comply with the Real Estate and Business Brokers Act, 2002, or REBBA, which contains a code of ethics.
What brokerages offer: If you decide to engage a salesperson or brokerage to help you sell your property, you can expect to be offered a range of service options. These could include monitoring market trends, giving strategic advice, marketing your property, arranging showings, negotiating, and managing paperwork on your behalf. Marketing might also include arranging to prepare the property for sale, such as renovations and staging.
Services and fees vary from one brokerage to another, so shop around for the best fit for you.
I’d also recommend that you hire a real estate lawyer to help prepare for and close your transaction and transfer title.
What is a listing agreement? Before selling your home, your broker or salesperson will ask you to sign an agreement, often referred to as a listing or seller’s agreement.
This agreement is the contract between you and the brokerage that permits them to market and sell your home. It must indicate the date it takes effect and expires, the services the brokerage will provide, and the amount of remuneration or fees payable to the brokerage.
How much do agents charge? A brokerage can use an agreed fixed amount, a percentage of the sale price, or a combination of the two.
If the fees are expressed as a percentage of the sale or rental price, it may be a series of percentages that decrease (and cannot increase) at specified amounts as the sale price or rental price increases.
Before you sign a listing agreement, it is important that you fully understand the fee structure and rate that will be charged. Remember, there are no fixed rates in Ontario, and many options are available regarding fees that are set by the brokerage — not by RECO, government or real estate associations or boards.
Communicating clearly ahead of time and getting everything in writing is the best way to solidify the terms of the listing agreement.
This column is for general information purposes only and is not meant as legal or professional advice on real estate transactions.Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.