FREQUENTLY ASKED QUESTIONS (Buyers FAQ)
Things everyone wanted to know, but were too afraid to ask.
1. How much do REALTORS® charge and how do they get paid?
In most cases, there is no charge to use a REALTOR® to buy a home as they are paid by the Seller for successfully completing the sale of their home.
2. How do I choose a REALTOR®?
There are many reasons to choose a certain REALTOR® to represent you, but there are ways to not choose one either. Here are the top reasons not to choose an agent:
Do not choose a REALTOR® because they are your friend or relative. This is the worst possible way to choose an agent. If your friend or relative is not getting the results you expect from them, it would make for some awkward conversations next time you are invited to a gathering with friends or family.
Do not choose a REALTOR® based on the number of billboards, bus benches, flyers or Facebook ads you see. This is not necessarily reflective of a good real estate agent. This is reflective of how good they are at spending money to promote themselves. Many successful agents have built up a strong business base without the need to spend thousands on advertising campaigns.
Do not choose a REALTOR® based on the name of the company they work for. Like any office, there are strong and weak agents. Always choose an agent after an extensive interview process where he or she has has built positive rapport with you and have answered all your questions to your satisfaction.
Do not choose a REALTOR® based on the size of the office they work for. All agents have access to every property listed on the MLS®. The best agents are the hard working ones, not those working out of a large office.
3. I saw my dream home. Can I buy from the listing REALTOR® ?
The short answer is yes, but you need to be aware of the following:
- The agent is representing both you (the Buyer) and the Seller.
- When the agent is representing the Buyer and the Seller, they cannot make recommendations on how much to offer the seller for the home. The seller is expecting their agent to help negotiate the highest possible price and the best possible terms for the seller. Meanwhile, as the Buyer, you are expecting the agent to help you negotiate the lowest possible price and best possible terms for you. As you can see, this may pose a problem.
If you choose to buy from the listing agent, ask them to provide you with market comparables sold in recent months so you can make an informed decision. You will also be required to sign a Limited Dual Agency Acknowledgement Form acknowledging that you are aware the agent you are dealing with is also representing the Seller.
4. What is an Exclusive Buyer's Brokerage (EBB) Contract?
Note: You are not obligated by law, in the Province of Saskatchewan, to sign an EBB contract. When you hire me to work as your Buyer's agent, you will never be asked to sign an EBB.
An exclusive Buyer's Brokerage Contract (EBB) is a contract outlining the duties expected of the REALTOR® and how much in commissions they will receive when you purchase a home. An EBB is not mandatory and you do not need an EBB to buy any home through an agent, but some agents will only work with buyers who agree to sign an EBB.
Under an EBB, your agent will receive a commission from the seller upon a successful purchase, but if the commission received is less than the amount indicated on the EBB, you may be billed the difference. For example, if you agreed that your agent is to receive a 2% commission on the purchase of a home, and the amount received from the seller is 1.5%, then you may be billed for the 0.5% difference. It is a good idea to discuss this with your agent to avoid any unexpected surprises.
An EBB is in effect for 1 to 364 days. If you purchase a home, but not with the agent whom you signed the EBB during the contract period, your agent can bill you for the commissions owing, even if they were not involved in the purchase in any way. If you decide to work with an agent who requires you to sign an EBB, make sure you are not bound to the contract for a lengthy period of time and be aware of all the terms and conditions contained in the contract.
5. Do I need a lawyer?
Yes, you will need a lawyer to finalize the purchase of your home.
A major role of the lawyer is to ensure the home's title is properly transferred to your name.
The lawyer is also tasked with handling the balance owing on the purchase of the home. The remaining down payment money owing on the purchase, less any deposit your agent's brokerage is holding in trust, is to be remitted to your lawyer. If there is a mortgage, the proceeds from the bank will be sent directly to your lawyer to be held in trust. Once all the monies are received, the lawyer will disburse the funds accordingly.
Your lawyer will also provide you with a Statement of Adjustments so you know exactly how much is paid and to whom it is paid.
It is recommended you choose a lawyer who specializes in real estate law.
6. What other costs should I expect?
Other costs you should be prepared for:
- Inspection fees. No home is perfect, not even brand new ones. It is recommended that you have the home thoroughly inspected to avoid any unepxected surprises. Inspections include, but not limited to: general home inspection, sewer line inspection, electrical inspection, etc. Discuss these options with your REALTOR®.
- Closing costs. Closing costs involve title registration, mortgage registration (if any), and lawyer fees.
- Utilities transfer fees. Anytime you apply for service (water, power, gas), you will be charged a one-time fee.
- Moving costs. Whether you are renting a trailer or hiring movers, it costs money.
- Insurance. Banks will require proof of insurance before they advance the money to complete the purchase.
Note: Estimated costs are omitted due to variations in product offerings and service.