If you follow the resale real estate market in Ontario, chances are you’ve heard that the province has made some changes to transactions in the province.
As of Dec. 1, the second phase of Ontario’s Trust in Real Estate Services Act (TRESA) has officially replaced the Real Estate and Business Brokers Act (REBBA).
The changes were designed to bring additional clarity and transparency to a transaction that for most people is the biggest purchase of their lives.
If you are planning to buy or sell property in Ottawa in coming months, when we first meet, I will explain the changes in detail and how they affect you and the buying or selling process.
I will also give all clients a consumer’s guide, created by the Real Estate Council of Ontario, explaining the policies in clear language. I’ll walk you through the guide and answer questions, to ensure we’re all on the same page.
The guide will give you the full details, but here are some noteworthy differences:
“Open Offers” an Option for Sellers:
Traditionally, if you were a seller and received multiple offers from competing buyers, you were not permitted to let buyers know what other bidders were offering or what conditions, if any, were placed on those offers. Buyers had to make their strongest offer and cross their fingers.
With the new TRESA regulations, if you’re selling, you can decide to stay with that traditional approach if you think it’s in your best interest.
If you feel it could be to your advantage for buyers to have more information, you could opt to have your agent give certain information to all bidders and their Realtors about the offers you’ve received.
This information would not be permitted to include any personal identification that would reveal names of bidders, but it could include prices that have been offered, any conditions, closing dates, or a combination of those details. You must put any such requests in writing to your Realtor.
If you are a buyer, your Realtor will let you know that parts of your offer could be revealed to other bidders, but again, not including any personal information that would identify you.
More Detailed Agreement Forms:
To help buyers and sellers understand exactly what their Realtor will be doing for them, all the services we provide, along with the commission, will be stated and listed clearly in the agreement forms that we sign at the beginning of our negotiating process.
For sellers, for example, I have long offered services such as free home staging, targeted marketing plans for your property, brochures, professional photographs, open houses, feedback from those who have viewed the property, and more. This will all be spelled out in the new forms.
The goal is to ensure that whether you are buying or selling, you understand the services to expect from your Realtor during the process, and you can follow up if you feel some services are not being delivered.
Requirements for Disclosures:
Under the new legislation, if a seller’s Realtor becomes aware of any defects, because of a pre-sale home inspection, for example, they are required to disclose that information to all buyers and their representatives. Previously, sellers were required only to reveal any problems that could make the property uninhabitable or unsafe.
Under the new rules, as always, a seller who becomes aware of a problem has the option to fix any issues or adjust their price to so that the buyer might have the funds to address the deficiencies at a later date.
Buyers should still consider the traditional condition on their offer of a pre-sale home inspection, as an inspection could find other issues beyond those known by the seller.
Most properties are listed on MLS for sale by and advertised by a Realtor at a brokerage and most often a buyer who is interested in that property is represented by a different Realtor from another brokerage. However, there are situations where both Realtors are from the same brokerage. The seller and the buyer then have to acknowledge that there is a dual agency situation with the same brokerage.
In those situations, the regulations have traditionally required that the buyer and seller to be made aware of this representation situation and agree to it in advance. The Realtors in such cases were limited as to what they could advise their clients during the transaction as the seller would have to agree to the disclosure agreement with their representative in advance.
With the new legislation, a brokerage can now decide to offer “designated representation.”
With designated representation, the Realtor for the buyer and the Realtor for the seller can each offer their clients the same full advice and advocacy that they would if they were dealing with a Realtor from a different brokerage.
The brokerage designates one Realtor to represent only the buyer and one Realtor to represent only the seller. The brokerage is required to have policies to ensure each realtor remains neutral, that they do not share confidential information, and are fulfilling their duties and responsibilities to each client.
You’re now a “client” or a “self-represented party”:
There’s a new term for a seller or buyer who has chosen not to be represented by a Realtor: “Self-represented party.” Someone who has a written agreement to have a Realtor represent them in the transaction is referred to as “a client.”
In the past, a buyer or seller without representation was referred to as “a customer,” but this sometimes-caused confusion, as “customer” could suggest a relationship with a Realtor, when in fact there was none, apart from the basic interaction involved in the transaction but limited information provided to the buyer.
The idea is to make it clear that when someone chooses to enter a transaction without a Realtor advocating for them, they have decided to truly go it on their own, and that they cannot expect any advice or counsel from a Realtor along the process. Those without representation will sign forms acknowledging this in any transaction.
For a more detailed discussion of the changes, you can find a helpful podcast featuring Toronto real estate lawyer Mark Weisleder chatting with Jason Mercer, Chief Market Analyst of the Toronto Regional Real Estate Board, at Ready to Real Estate: What’s in Store for TRESA Phase 2? on Apple Podcasts
The Ontario Real Estate Association (OREA) also has a summary of the changes and a series of videos, at www.orea.com/tresa
If you’re considering buying or selling property in Ottawa, I’d be happy to meet and tell you more about the changes, Ottawa’s current market and the more than 30 years of experience I offer as a Realtor in Ottawa. You can read more about me and my services at www.nancybenson.com. Feel free to give me a call, at 613-747-4747.