Dear Guru: My friend is a new arrival from Vietnam. She, like many others who arrive in Canada, with encouragement from the Canadian government, wants to buy a property in Manitoba. (the federal government encourages people to come to Canada, by having them pay a $75,000 fee, which is refundable if they buy a business or a building, or both)
She asked me, her travel agent, to assist her to find a property. I cannot do that legally because I am not a registered real estate agent. I advised her to go to a registered Real Estate Broker, to represent her.
The customer said “Why should I go to a Real Estate Broker? I would rather just drive around the City, spot a property that appeals to me, and phone the persons name or Brokerage name, that is on the sign, and go to see that property.”
How do I explain to her that it is in her interest to have her own Agent/Broker, to represent her prior to driving around, herself.
Dear Travel Agent:
While it is difficult to explain to a newcomer that it is in her interest to have her own Broker, you might want to explain to her how real estate commissions are usually paid, and what common practice is, between property owners and Brokerage companies.
Usually a Listing Broker has a written letter from the property owner, giving it the right to List the property, for a specified period of time, by any means necessary, i.e. print or billboard advertising. The owner also signs this letter outlining the amount of the commission, often approximately 5% of the selling price.
It is the responsibility of the Listing Broker to obtain all of the information about the building, to be passed on to either the buyer or to a representative of the buyer, i.e. another Brokerage Firm.
If the prospective buyer arrives at that building with her own Agent/Broker, then it is common practice, that if her own Broker obtains an Offer, which is accepted by the owner, then this second Broker is entitled to one half of that commission paid to the Listing Broker. It does not cost the buyer any more, and she has the advice of her own broker/advisor.