Why do I get asked if I’m working with a salesperson when I attend open houses on my own?

This is a common question. While it may sometimes seem like a nosy, or irrelevant ask, there are reasons a representative hosting an open house may ask this question.

Before I get to the answer, I would like to make it clear that a prospective homebuyer can attend an open house either as a client of a brokerage or as an unrepresented buyer.

Being represented means that the prospective buyer has hired a brokerage, represented by a salesperson or broker, to assist them in their search and purchase of a property. A buyer can enter into a contract with the brokerage called a Buyer Representation Agreement or, BRA (pronounced bee-are-eh).

People are often asked this question by a Seller’s representative when entering a property to determine whether they are represented or unrepresented.

Under the laws that regulate the conduct of brokerages and salespeople, if someone is represented and obliged by a BRA, a salesperson is required to communicate with them through their representative. By not following the required process, a salesperson could be in contravention of the law as outlined in – the Real Estate and Business Brokers Act, 2002 (REBBA).

Buyers attending open houses on their own, should be prepared to provide photo identification and their contact information, in case it is requested. They should also volunteer the contact information of their salesperson, if they have one. Maintaining a record of open house attendees is common and often at the request of the homeowner, for security reasons.

It is important to fully-understand what a BRA is, prior to entering such an agreement.

A BRA is a binding contract. Signing one commits a buyer or seller to work exclusively with one brokerage for an agreed upon length of time, within a specific geographic area. It could also be defined as narrowly as to a specific property.

A BRA ensures the representing brokerage will be bound by their fiduciary duty to follow their clients’ lawful instructions, protect their confidential information, and promote their best interests in a transaction. In return, as a client, the buyer, or seller, agree to negotiate any offers through their sales representative, and the brokerage will submit offers on their behalf. It’s always a good idea to consult with a real estate lawyer prior to entering into any contractual agreement.

I strongly advise buyers and sellers to practice due diligence when choosing a salesperson to represent them in their buying or selling journey. One helpful step in doing so is to use the Real Estate Professional Search tool on the RECO website to confirm that a salesperson or broker is registered to trade in real estate.

If you have a question for Joe about the home buying or selling process, please email information@reco.on.ca.


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.

 

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