What Happens if Your Home Closing is Delayed?
The majority of closings happen on time or within a few days if issues need to be addressed. If closing is not completed, and buyers can be left homeless. This is a terrifying thought, however, it does happen. Below are five reasons which can lead to a delayed or canceled possession date.
REASON ONE: UNREALISTIC CLOSING DATE
Don't expect to write an offer and be in your home the next day. It takes time for lawyers in Alberta to clear and transfer the title to you. The actual registration process can take a day or two or a few weeks depending on how busy the Land Title Office is and the transfer of land process takes about 3-7 days. An experienced real estate agent will know whether the contract dates are realistic or not.
REASON TWO: REAL ESTATE APPRAISAL ISSUES
When buying or selling real estate you need to understand that a large piece to a successful home sale is the bank appraisal. A bank appraisal is part of a real estate transaction anytime a buyer is obtaining a mortgage. It is normally completed prior to a buyer removing the finance condition. If the property does not appraise out, the bank will not forward the mortgage.
REASON THREE: TITLE PROBLEMS
Your Realtor should be doing their due diligence by pulling the title prior to you writing the offer. However, between the time you have satisfied and removed conditions, it has been known to have items placed on the title. These items can include a second or third mortgage, a lien from a collection agency, or a lis pendens. (A Lis pendens is the Latin term for a Notice of Pendency of Action. It means that a lawsuit is pending against the title of a property. The lis pendens is a public notice letting buyers know there is a dispute over the ownership of the property and is commonly used in divorce situations).
REASON THREE: REAL PROPERTY REPORTS
Another task that a real estate attorney will perform is a review of an instrument survey or real property report (RPR). An RPR can be defined simply as a drawing of the land a home is situated on. Real estate closings can be delayed in the event there is a discrepancy in line encroachments such as a neighbor's fence or there is an addition added to the property such as a deck or storage shed without compliance.
REASON FOUR: YOUR BANK DID A SECOND CHECK
When a buyer receives their mortgage commitment, it means the funds have been approved and the closing can occur, right? In most cases it does mean the funds have been approved, however, there are times when a lender will require additional documents at the last minute or a buyer has made a large purchase and their debt ratio qualifying has changed.
REASON FIVE: TERMS OF SALE
There are many reasons why home buyers have home inspections to ensure the property they are purchasing doesn’t have any major deficiencies that can cost a large amount of money in the future. After a home inspection is completed, the buyer can request repairs be completed at the seller's cost. If a seller agrees to make repairs, it’s important that these repairs are done prior to the buyer moving into the new home. These terms can range from the replacement of shingles to picking up dog feces.
THERE ARE STEPS YOU CAN TAKE TO MINIMIZE THIS RISK BEFORE REMOVING YOUR CONDITIONS
In the province of Alberta, the real estate contracts which Realtors use have several safeguard clauses for both the buyer and the seller. In lament terms - If a delay is caused due to the fault of a seller, the seller is responsible for compensating the buyer. This can include all costs accrued until the property has been transferred. Some of these costs can include, interest rates, storage, hotel rooms, and meals. The real estate contracts also work in favor of the seller and if for any reason, the buyer has delayed the closing, the buyer will be liable for compensating the seller.
- Ask for a copy of the real property report. The seller should have this in their possession within 10 days of putting the property on the market.
- Have your financial institution send you documentation that all financing requirements have been met
- Don't make any big purchases
- Ensure you have the dower signed if needed. This is a standard document Edmonton RE/MAX Agents use often.
- Complete a walk through prior to possession when required
- Ensure all paperwork including addendums are at your lawyer's office (With Remax Elite, we have a complete conveyancing department to ensure, there are no delays and help make the real estate sale process seem seamless.
- If you have questions about buying a home in Edmonton or the surrounding area, we are here to help. Contact us today!
How to Hire a Great Edmonton Realtor when Selling (& Buying)
Be cautious with any REALTORS who charge upfront fees! Most Real Estate Companies DO NOT charge up-front fees. All expenses should be paid by your Realtor from their own pocket. Once your home is SOLD, the Realtor will receive the remuneration you have agreed upon in your listing agreement. In the event your home does not sell during the term of the agreement - unless otherwise written - there is NO CHARGE.
There are almost 4000 licensed REALTORS® to choose from to help you sell your Edmonton home. When a municipality is a hot market, anyone can sell a property, but great real estate agents are able to sell in any market.& In a soft market or "buyers market", it is crucial to choose a REALTOR® who knows how to sell houses or you can become an expired statistic. Currently (2019) in Edmonton about 40% of homes are selling.
There are a few questions to ask a listing real estate agent prior to having them in your home, which will eliminate inexperienced agents and save you time and money. When REALTORS® are on a "Listing Appointment", the intention of the agent is to get you to sign the agreement to put your home on the market. After an agent has completed their marketing plan, strong agents will ask for the business. A weaker agent will not.
The three biggest mistakes sellers make when selecting an agent is basing their decision solely on commission, price, and the ability to market your home.
Lowest real estate commissions:
Agents in Edmonton have business expenses, which can run into the thousands every month. Part of these expenses is the cost to market your home. If an agent is listing your home for a lesser commission, don't expect them to pay money they don't have to market your property. A good agent will not ask for any money upfront. Why would you pay someone for a job which has not been done? There is always a reason why a broker or real estate agent would discount a real estate fee. Ask yourself why. Is the agent desperate for business or unqualified? Do you want to work with a desperate agent?
Highest Asking Price:
In the real estate industry, there is a term, called "Buying the Listing". This means, an agent has told you, your home is worth more than it really is, just to get you to sign the listing agreement. Expect to reduce or price once or twice during the agreement or worse, be added to the Expired list (Homes that do not sell). REALTORS® already have an idea of what your home is worth, even before stepping into your home. Beware of an agent who is trying to buy the listing.
Ability to Market Properties:
Today, almost every buyer and seller start the home buying and selling process online. You may want to use "Mom and Dads REALTOR®, but are they tech-savvy? There is so much more to marketing a home than putting it on Realtor.ca. Anyone with a real estate license in Alberta can do this, you don't even need to live in Edmonton. Finding a qualified buyer who is ready, willing, and able to purchase your home is more valuable to you than generating leads.
If your home is not exposed on the internet, by a tech-savvy Agent, buyers will not find it. Online advertising and property websites are now a basic requirement in modern home buying and selling. REALTOR®’s success also depends on how well they can market homes. Google the agents' website, prior to inviting them into your home. Find out how many listings the agent is carrying. If the Real Estate Agent only has one or two listings, they may be part-time, may be more comfortable working with buyers, or may not know how to market your home. An agent who is carrying too many listings can be overwhelmed and you may end up becoming a number instead of a client. A good rule of thumb is, hire an agent who carries 10 - 20 listings at a time, this is usually an indication of an above-average real estate agent.
The bare minimum marketing you should expect from your agent is:
- Professional yard signage.
- Lockbox with electronic monitoring
- Follow-up reports on buyer showings with feedback to the seller
- Staging advice to make your home more attractive to potential buyers.
- Digital targeted marketing.
- MLS exposure with a minimum of 30 professional photographs
- Virtual tour.
- Distribution to major websites.
- Updated CMAs after 30 days including the recent sales
- The ability to track online buyers
During the listing appointment, there are a few things that need to be noted which include how long was the agent in your home. Eliminate agents who view your home and arrive at a "listing price" within a short period of time. Although their price may be accurate, they haven't taken the time to show you how they arrived at the price or what they do, and how they get homes sold. A good listing agent will show you comparable sales, pending sales, actives, educate you on the current market, and show you their marketing plan. If the agent has no statistics, home sales are located in a different community, or are not prepared, could be a red flag.
A great Edmonton Real Estate Agent will have spent time prior to meeting you, completing research on your home. They will have all the necessary information to price your home accurately. (highest possible asking price to attract reasonable offers) The agent will be prepared for anything including objections or concerns you may have. They will take the time to complete an accurate CMA, community absorption rate, thoroughly go over their marketing plan, and address any unforeseen concerns they may have prior to asking for the listing. This is a valuable asset to the hiring experience.
Were all of your concerns addressed: Pay close attention as the REALTORS® goes through their marketing plan. Many of your concerns will already be addressed by a good agent. Pay attention to what is said. If it is mostly about how many homes they personally sold and how quickly, expect them to suggest a lower selling price below the true market value. These agents want to get your home sold as quickly as possible and move on. If the agent has not addressed most of your concerns. This can be a red flag.
Hire a professional: A huge misconception is every agent deals with the same type of buyers and sellers. In fact, there are agents who only list and agents who only deal with buyers. Not all agents work in all price ranges. In Edmonton, there are real estate agents who specialize in mobile parks. They know how important it is to have the "criminal check" completed prior to writing an offer. An agent who specializes in luxury homes should have the extra knowledge required for selling a home under a company name, know the differences between the brands and grades of hardwood.
If you are relocating, a relocation specialist is the best. They have contacts with other relocation REALTORS® who they have already done business with and can recommend a great agent for you at your destination which will make for a smoother move. Go with your instinct: Selling a home is a major decision. You need to like, trust and feel comfortable with the REALTOR® you choose. Personality and character traits are also extremely important but don't show on paper. Buying and selling homes in a soft market, can take time, and choose the right agent will be a positive experience. Choosing the wrong agent can lead to months of frustration and an unsold house.
Contact us today for your FREE HOME EVALUATION
How Realtors help Edmonton home buyers
There are several reasons why buyers prefer to work with real estate agents when buying a home, even when a buyer has sold their existing home via "For Sale by Owner". A few of these reasons include knowledge of the ever-changing markets, expertise in both negotiations and communities, experience and exclusive real estate tools.
A large portion of Canadian Real Estate Agents has earned their ABR (Accredited Buyers Representation) designation, which means, these REALTORS® have completed the education needed to service buyers with a higher standard. REALTORS® who are representing buyers expect to get paid for their services at some point in time. It is usually within a few weeks of the buyer taking possession of their new home. In the province of Alberta and to ensure real estate agents are compensated for their services, a mandated agreement by RECA (Real Estate Council of Alberta) will need to be signed. It explains how much, the term of the agreement, what services will be provided and other relevant information.
If you have questions - ASK. Never sign anything you do not fully understand. Real Estate Agents deal with forms on a daily basis, and most of us can explain listing and purchase agreements without even looking at them. A good REALTOR® should have gone through each agreement and address questions or concerns you may have had. Near the bottom of both the Buyers Agreement and Sellers Agreement, there is an acknowledgement clause prior to signature placement. In an Exclusive Buyer Representative Agreement, it states...
- 14.1 You acknowledge that:
- (a) you have read this agreement.
- (b) you have received and read the Guide.
- (c) this agreement creates a sole agency relationship with us, as the Guide describes.
- (d) you had the opportunity to get independent advice from a lawyer before signing this agreement.
- (e) this agreement accurately sets out what we and you agree to.
This means you can obtain legal prior to signing or you may want to take the agreement home to read over more thoroughly. These agreements are not rocket science, but knowing what you are signing is important.
- REAL ESTATE TIP#1: "The Guide" is referring to the Consumer Relation Guide which explains how the professional relationship including fiduciary duties and the real estate agency will interact with each other.
- REAL ESTATE TIP#2: Buyers Real Estate Agents, normally do not charge an extra fee above what is offered by a seller, unless otherwise agreed in writing.
Have a real estate question? We are here to help. Contact us anytime
How to Write a Real Estate Offer the Right Way!
As a buyer, when writing an offer on a property, you want to be able to pay the least possible amount for your
home. Sometimes buyers will offer 5-10% off of an asking price for no reason other than they were told to by a "friend" This is so silly! You may want to offer more, you may want to offer less. The only way to make a reasonable offer is to do your homework.
REAL ESTATE TIP #1 - What the seller paid for their home is irrelevant.
REAL ESTATE TIP #2 - What the seller is asking for their home is also irrelevant.
Knowing why a seller is selling is always helpful when you make an offer, but this information is protected by the sellers real estate unless it is allowed in writing to be disclosed. However knowing the reason for selling is still irrelevant on the true market value of the home, as is the asking price. There are several things to take into consideration, prior to making an offer on any home.
Is it a buyers market or a seller's market? Knowing what type of real estate market you are in will help you choose an initial offer price. Completing a community Absorption Rate is the easiest way to know.
Edmonton Real Estate Agents have access to this information and as a rule of thumb, the quicker, the possession date, the more motivated the seller is. Most homeowners in Edmonton have a 30-day negotiable possession date. If a longer possession date or a set date is asked for, this is an indication which the seller needs a specific date and can be more important than price. Keep in mind, if the property is tenant occupied, tenants do have a 90-day tenant-right. Normally, homeowners with tenant occupied properties or vacant property are more motivated.
Your REALTOR® will know the history of this home. How long the sellers have owned the property, how long they have been trying to sell it and if there have been any price adjustments. Your real estate agent is also required to pull the title of the property which will indicate any recent financial debts including the current mortgage to ensure there will be enough funds to close on the possession date.
Condition and Size:
Size is a factor of price more in places like China than Edmonton. The value of a home is in the condition. You may want to go back into the home to take a better look at the overall condition. Is the flooring laminate or hardwood? Are the faucets Walmart or Moen? Has the yard been meticulously maintained properly or neglected? Will you be replacing any fixtures, chattels, windows, shingles in the near future? Look at the property through the eyes of your experienced real estate agent. They will notice things you don't.
Complete a Buyers CMA:
Examine all recent comparable sales. Only use recent properties that are similar in configuration, age, and location to the home you want to buy. Your REALTOR® can complete a buyer's comparative market analysis (CMA) for you.
REAL ESTATE TIP #3 -If the property has been staged, don't be fooled by how pretty it looks. Staging a home does not increase property values.
Do you really need a property inspection when purchasing a home in Edmonton?
A real estate property home inspection is an objective visual examination of the physical structure and systems of a house, from the roof to the foundation. It is for the sole benefit of the purchaser and is usually subcontracted to a certified licensed residential real estate inspector, paid for by the buyer, and can take one to four hours depending on the size and condition of the property. At the end of your inspection, a standard home inspector’s report will be supplied covering the condition of the home.
A home inspection can identify the need for major repairs or builder oversights which can lead to unpleasant surprises and unexpected difficulties in the future. Buying a home can be the largest single investment you will make and spending a few hundred dollars for peace of mind is money well spent.
Home inspection components covered include:
- heating system including furnace and hot water tank
- the central air conditioning system
- carbon monoxide and fire alarm detectors
- interior plumbing using both visual and water residue tools
- mold issues and water damage
- electrical systems
- the roof & attic
- visible insulation of walls, ceilings, floors, windows, and doors using a thermal ray tool
- foundation & basement
- other structural components which may need major repair or replacement.
Depending on your chosen property inspector, there may be some things that will not be inspected such as things that can not be seen visually and appliances. You may want to check that these chattels are in working order.
If a home inspection is not allowed on a bank foreclosure offer to purchase, it is still a good idea to have one done, prior to putting in an offer.
In Alberta, builders must supply a new home warranty at closing, however, new homes should ALWAYS have a home inspection done. Building a house takes time and there are always things that get missed. It is easier to address these concerns before you remove your inspection condition.
What if the report reveals problems? No house is perfect. If the inspector identifies problems, it doesn’t mean you should or shouldn’t buy the house. Talk it over with your real estate agent. There are a few options to address any concerns you have.
Should you fire your Realtors® (part 3)
Every Realtor and Real Estate Companies in Edmonton market homes differently. Some companies and agents will put your home on the public MLS, charge an upfront fee and expect you to do everything else, hoping either you find a buyer yourself or another agent from another real estate company brings you a buyer for your home. A full-service company will do all of the work for you and more. Below are three more reasons to fire your Realtor.
4. Your Realtor is not looking after your best Interest
A Realtor's obligations are set out in your agreement in plain sight. During the listing agreement, your Realtor must be impartial in dealings with you and other buyers being represented by the same agents with an interest in your property.
- If your agent has found a buyer for your home and is representing both you and the buyer, an acknowledgement form must be signed but all parties prior to the offer presentation. If you are not comfortable with your Realtor representing both you and the buyer with the sale of your home, both have the option of being represented by another Realtor or real estate brokerage prior to the offer presentation.
5. Your Realtor is not marketing your home
Under section 4.2 subsections (a) and (b) of the Exclusive Seller Representation Agreement, it states:
- In addition to the responsibilities described in the Consumer Relationship Guide, the designated agent (your Realtor) must also:
- (a) market the property, until the property is sold under this agreement, or this agreement ends.
- (b) keep you informed of their marketing activities and any resulting transaction.
A good realtor will continuously keep marketing your home through various types of marketing exposure to find the right buyer and keep you informed. Don't expect to find that perfect buyer if the only thing exposing your home for sale is the address and a few photos on the Multiple Listing Service (Realtor.ca).
6. Confidential Information Exposed!
Whether you list with a common-law real estate company or a designated real estate company, the Consumer Relationship Guide forms part of both a buyers agreement and a sellers agreement. In this document. it clearly states the agent's fiduciary duties which include:
- Undivided loyalty: The agent must act only in your best interest and put them above their own and those of people. The agent must avoid conflicts of interest and must protect your negotiation position at all times. In lamens terms - your reasons for selling cannot be disclosed unless it has been put in writing.
- Confidentiality: The agent must keep the information confidential, even after your relationship ends. Confidential information includes your personal information, information about the property and information about the transaction (except information the law says must be disclosed or information you agree to disclose).
For more information on the Alberta Consumer Relationship Guide, contact the Alberta Real Estate Council.
Have a question? Feel free to reach out.
Should you fire your Realtors® (part 2)
It is always best to try to resolve any issues or concerns you have prior to firing your agent. However, if you have made a mistake and chosen the wrong Realtor to represent you on the purchase or sale of your home, the best thing to do what is best for you and move on. Below are the top 3 reasons home sellers and buyers fire their Realt Estate Agents.
Reason 1: Lack of communication
You have signed a listing agreement with a Realtor and now have no idea what is happening with the sale of your home because your agent is not responding to your texts, emails or phone calls. A lack of communication is the biggest complaint Realtors receive from the public and is unacceptable. Even if there has not been any activity on your property, your Realtor should still be communicating with you to let you know there is no interest. A good Realtor will have systems in place to ensure you receive updates on the sale of your home on a regular basis. These updates should include:
- Feedback from all and every showing one you home
- The most recent real estate community activity including which homes have recently sold had price adjustments, and the homes which have been removed from the market.
- Updates on your neighbourhood house prices - Should you really drop your price?
- Feedback from Open houses
- How many people are looking at your home online
- The number of people who have viewed the videos
- All internet and yard sign inquires
- Any mortgage changes will affect the sale of your home.
Reason 2: Your Photos Suck!
Let's face it! If your photos on the MLS are distorted, blurry or upside down, it shows the effort your Realtor is putting into the sale of your home. It also shows the quality of the Realtor you hired.
If you are a hoarder, have extremely messy tenants or your property needs some major repairs, there is still no reason why your MLS photos should not be clear. When a buyer views your home in person, they will see the condition of your home, so why hide it.
When putting photographs on the MLS, it is to attract buyers looking online. It only takes a few minutes for your home to show it's best. This is easily done and only takes a few minutes to remove anything in the photos which would discourage a buying from wanting to see your home. This is not rocket science.
- Remove any signs of pets including their toys and food dishes.
- Make your beds and open your blinds and curtains
- Clean off your kitchen counters and hide dirty dishes
- Don't over stage your home - This just clutters the photos
- Put the toilet seats down
- Cut your grass and shovel your walkways.
Reason 3: Showing you the wrong houses
When you sign a Buyer Brokerage Agreement with a Realtor to help you with the purchase of a home and you are discouraged with every property you have seen, this may be a sign you have chosen the wrong agent. As a buyers agent, your Realtor should be taking the time to search listings WITH YOU to determine which properties will work best for you and eliminate those which will not. Its fun to look at houses online, but great Realtors use a few techniques to make a property look better than it actually is. It's our job! When you are viewing homes online with your Realtor, you will be able to see the "private" comments including any contingencies which would discourage you from purchasing that home.
By eliminating "undesirable" properties will save both you and your Realtor time and frustration. It will also help those home sellers. Every time a sellers home in Edmonton is shown, the seller tries to make their property show its best by cleaning up, removing the kids and the pets and accommodating your showing time.
If you still have questions or concerns, please contact the Edmonton Real Estate Association at 780-451-6666.
Have a question? Feel free to reach out.
How to Fire Your Realtors®
There are a few reasons to fire your Realtor. If you feel you made a mistake by signing a selling agreement with the wrong Realtor, the best thing to do is to correct it and move on. If your Lawyer or Doctor was not working in your best interest, would you fire them too?
Your listing agreement is usually for a period of three to six months (sometimes longer) and you are entitled to cancel at any time. This can be done with a standard Alberta real estate form. A Realtor (depending on the agency designation) also has the option of terminating your agreement at any time without your consent, but this rarely happens.
If you have hired the wrong real estate company or agent to represent you, fire them. Do it professionally and do it in writing. There are a few things to consider prior to firing your Edmonton Realtor. All of these contingencies will be set out in your original listing agreement.
Who owns the listing?
A: The listing is owned by the brokerage, not the Realtor. If you have a problem with the agent, call the broker. If you have a problem with the broker, call consumer affairs and the Edmonton Real Estate Association.
Is there a fee to cancel your listing agreement?
A: There may be a cancellation fee in the standard agreement. This fee is usually the cost to cover expenses already paid by your Realtor prior to your cancellation. The service fee amount will be set out in the agreement you signed. However, if you paid a fee upfront, there usually is no cancellation fee.
Will I still have to pay a commission after I fire my agent?
A: If a buyer was introduced to your home during the term of your listing agreement and you sell it privately (during a specified time in the agreement) to that same buyer, commissions will be payable.
Can I hire another agent immediately?
A: Yes. Once your home is off of the market, you are free to list your home with any licenced real estate agent.
When you are ready to fire your Realtor, simply inform your agent that you would like to cancel the listing and ask him to provide you with the cancellation listing form. There will be two choices on this form. Make sure you have a property termination end date, the broker (not the Realtor) has signed and you have received a copy.
- 1. Unconditional termination
- Which allows no further obligations for either the seller or Realtor
- 2. Conditional Termination
- Your agreement will end on the termination date but your obligations will continue under the terms of Section 10 of the Exclusive Seller Representation Agreement. There may also be an additional term.
If your Realtor fails to provide this form within a timely matter, contact the brokerage and tell them about your grievances with the agent.
Can you fire a Buyers Agency or Buyer Realtor?
Yes. It is a different form, but you are free to fire your Realtor when buying. There may or may not be a small fee to get out of the agreement. This fee would have been set out in the original buyers' agreement which states: If you change your mind about looking for a property, you must tell us in writing. You must reimburse us for our reasonable expenses up to the time you tell us. Reasonable expenses will include: (If this section is blank - no penalty will be payable). However, this does not allow you to approach a seller that has been introduced to you while working with your realtor. If you do this, you will have to pay a full commission as set out in the original buyer brokerage agreement.
If you have any questions, both RECA (the Real Estate Council of Alberta) and EREB (the Edmonton Real Estate Board) have plenty of great information to help you make the best decision for you!
Have a Question? Feel free to reach out.
Understanding Buyers Brokerage Agreements in Alberta
Buyer Brokerage Agreements have been around for several years, and only recently has been mandated for real estate agents to have buyers under the agreement when working in a "client status". This legal change created security for both consumers and real estates in Edmonton and throughout Alberta. This form states the responsibilities of both the buyer and their real estate agent including:
- The mandated Fiduciary Duties, to protect the interests of the buyer
- The buyer cannot hire more than one broker or real estate agent to represent them
- The term of the agreement. Depending on the real estate market and how long the real estate agent chooses to work with a buyer, this agreement is normally 30 Days to 1 year and allows enough time for the buyer to purchase a home. If the buyer has not purchased a home during the time frame, they may extend the agreement or sign with another agent.
- The retainer fee (normally $1000 - $2500) is held in trust by the real estate agent/broker and forms part of the buyers down payment.
- Remuneration is stated in the agreement and can not be changed without written consent from all parties. This protects the agents' commissions and allows the buyer to know how much the REALTOR receives for their services. (usually paid for by the sellers real estate agent)
- While under the agreement, If the buyer elects to purchase a property without the help of their real estate agent, they will owe the agency the commission set out as per their Buyers Brokerage Agreement.
- This agreement also lays out the obligations and duties of the real estate agent ensuring the agency is working in the buyers best interest. Some of these obligations may include
- Showing you all properties you may be interested in as soon as possible
- The duration of the agreement
- Advertising for properties that meet your search criteria
- Pulling land titles to ensure closing capacity
- Setting you up on Auto-prospecting.
- Fiduciary Duties of the real estate agent
- Explaining and helping to prepare the offers to purchase
- Negotiate favourable terms for the buyer
- Provide a Buyers CMA to ensure you are not overpaying
- Inform you of all aspects of your offers including any counters
- Assist you with a chose of mortgage brokers, inspectors, lawyers, etc
- Any other relevant services you may require
For more information on working under a Buyers Brokerage Agreement, feel free to contact us.
How Realtor Commissions are Divided
Let's pretend for a moment, your Edmonton home sells for $400,000 and you are paying 7% on the first $100,000 and 3% on the balance of the purchase price. The total commissions payable would be $16,000 plus GST. To understand, how much money real estate agents actually make, we need to look at how agents real estate commissions really work.
First - Half of the commission is given to the buyer's agent. Out of the buying side, the buyer's agent does not receive the total $8000. Depending on how the agent splits their commissions between a team or office split, many buyers agents in Edmonton will receive half of the remuneration of $4000. Out of this sum, the buyers' agent will have to pay their monthly desk fee, vehicle maintenance, gas, and insurance. There are also annual licencing fees for Edmonton Realtors, buyer closing gifts, title searches, other fees associated with selling a property and of course Revenue Canadas share.
The other half of the commission goes to the listing agent. Out of the listing side, the Realtor usually has more expenses than a buyers agent including the cost of marketing the property, (which is not cheap!), the cost of hiring a professional photographer, the cost of accurately measuring the property, cost of a third company putting up and removing real estate signs, key boxes, promotional items, website maintenance, property-specific webpages, etc. Same as the buyers' agents, the listing agent also pays for annual licencing fees for Realtors, seller closing gifts, title searches, other fees associated with selling a property and Revenue Canadas portion of the commission.
There are real estate companies in Edmonton who will charge a flat fee or a lesser commission to put your home on MLS, and other Realtors will charge a higher fee. Understanding how much money Edmonton Realtors make will depend on how many homes they sell and how much commission they receive on each property sold.
The net commissions left for the real estate agent is what they get to take home to feed, shelter and clothe their families. Today, in Edmonton's soft real estate market, many agents are now changing companies to a "lesser fee structure" company due to the cost of doing business. Many of these agents can no longer afford to be Realtor, simply because they are not doing enough business, don't want to work as hard to earn a higher commission, are licenced only to buy and sell real estate for themselves or are on their way out of the business.
Now that you have a better understanding of how commissions work and how much Realtors actually net, let's pretend again for a moment, you are a real estate agent. Although it is against the Realtors Code of Conduct not to show properties based on commissions, it can be a buyers discretion not to view them (read more about buyer brokerage agreements). If you were a Realtor in Edmonton, would you show a property with a lesser commission?
In Alberta, all real estate commissions are negotiable, up or down and when hiring a real estate agent to sell your Edmonton home, a few thousand dollars in real estate commissions can make the difference between selling and not selling your home - Choose your Realtor based on the value they offer and interview more than one. Do they have the tools to market your home? Are they giving you a discount based on services that will be eliminated? Are they asking for money upfront, prior to doing anything? How is their internet presence?
Always interview a few real estate agents, ask lots of questions especially about their marketing plan and how they attract buyers. Find out what they have to offer. Not all Realtors are the same, each agent is different. If you use a Realtor or a real estate company to sell your home, there will be a fee. The big question you need to ask yourself is - "HOW MUCH MONEY WILL YOU NET AT THE END OF THE DAY?"
Most REMAX Realtors in Edmonton have the highest monthly real estate fees and are working hard to help you sell or buy your home, staying on top of their game, a doing what it takes to get your home sold including paying for the costs of marketing your property. Keep in mind, Realtors do not get paid by the hour, their real estate companies DO NOT pay them for working there. Realtors work very hard to earn their commissions and only get paid once your property is SOLD (usually on possession date) and not on the day it is sold!
If you have any questions on real estate commissions in Edmonton or what like an in-home real estate interview with myself, feel free to contact us at 780-237-7074.
Learn what our Edmonton Remax Realtors can do for you!
Buying or selling a home is likely the largest and most important transaction you will ever make. That is why so many people trust RE/MAX: the most widely recognized real estate brand in the world. For more than 20 years, RE/MAX has been the leading real estate organization in Canada. By providing the best training, administrative and marketing support, brokers and agents are free to focus on what they do best: sell real estate.
Our experienced and knowledgeable agents are the reason RE/MAX is consistently ranked number one in several markets across Canada. We provide our agents with exclusive tools and training to ensure they have the skills they need to effectively guide you through the real estate process. In fact, Canadian RE/MAX agents averaged twice as many transactions as their competitors. (based on 2015 closed transactions source: CREA, RE/MAX) and have more specialized designations than any others, making them the most productive agents in Canada.
RE/MAX Realtors have always been the leaders in the real estate industry, adopting the latest technology and creating innovative marketing programs. RE/MAX was the first brand to expand its reach to the global market through a revolutionary global listing site. With listings from more than 80 countries, displayed in over 40 languages, RE/MAX agents have the opportunity to search and post listings internationally, making international transactions easier than ever.
At the heart of RE/MAX is a deep commitment to the communities we operate in. That is why we developed our exclusive Miracle Home Program, which allows RE/MAX agents to directly donate a portion of their home sales toward quality healthcare for children. RE/MAX agents also contribute millions of dollars to the Children Miracle Network through various cause-marketing programs each year.
Our Market Share
- Nobody in the world sells more real estate than RE/MAX.
- RE/MAX agents worldwide sell more real estate than any other brand.
- RE/MAX is the most productive real estate network in the world.
(With the market share claims above, always use the footnote “As measured by residential transaction sides.”)
Our Real Estate Brand Recognition
- When asked to name a real estate brand, RE/MAX is the name people name first.
(Source: MMR Strategy Group study of unaided awareness)
- RE/MAX: First on the minds of buyers and sellers.
- Buyers and sellers think of RE/MAX first.
- RE/MAX is who home buyers and sellers think of first.
(Source: MMR Strategy Group study of unaided awareness among buyers, and sellers)
Why Our RE/MAX Agents are Great
- Every 30 seconds, a RE/MAX agent helps someone find their perfect place.
- With over 7,000 offices worldwide, RE/MAX serves homebuyers and sellers closer to home.
- RE/MAX offers support and services not available at other real estate companies.
- RE/MAX has helped millions of families buy or sell a home.
- Each year, RE/MAX agents help hundreds of thousands of families buy or sell a home.
RE/MAX Agents are Full-Time Realtors!
Your home is one of the biggest investments in your life. When you are ready to buy or sell, choose wisely and choose RE/MAX. Contact our Edmonton RE/MAX Realtor today.
What Happens if your Real Property Report does not Comply?
If you are selling a home and have been told that there is no compliance or you have a non-conforming property, don't panic if you have not yet accepted an offer to purchase. Your Edmonton real estate agent can walk you through how to write or amend the purchase agreement to ensure you will not be penalized. However, if you have sold your home and are just finding out, you have no compliance or non-confirmation, talk to your lawyer.
Residential AREA real estate purchase agreements contain a clause that clearly outlines the factors of the real property report.
"The current use of the Land and Buildings complies with the existing municipal land use... buildings and other improvements on the Land are not placed partly or wholly on any easement ... do not encroach on neighbouring lands ... directly on the real property report ...location of Buildings and other improvements on the land complies with all relevant municipal bylaws, regulations or relaxations ... prior to the Completion Day, or the Buildings and other improvements on the Land are non-conforming buildings as that term is defined in the Municipal Government Act (Alberta) ...current use of the Land and Buildings and the location of the Buildings and other improvements on the Land comply with any restrictive covenant..."
Drawbacks of Non-Compliance or Non-Confirmation:
Knowing in advance that there may be an issue with compliance or non-confirmation on your real property report will save time, money and stress, by dealing with the issues in advance. Depending on the nature of the deficiency. A request to the municipality for a certificate may lead to a requirement for substantial alterations, relocation or destruction of certain structures.
The buyer may choose not to go ahead with the purchase until deficiencies are resolved. Under the AREA contract, the warranties provided by the seller only relate to development issues and not building code issues; and while there is some debate among lawyers on this issue, most take the view that any building code deficiencies including the lack of building code permits are the responsibility of the buyer.
Knowing in advanced provides certainty for both buyer and seller at the time of closing regarding compliance with development issues and provides the opportunity for a buyer to have the seller remedy any deficiencies in this regard prior to or in conjunction with the closing.
It can be used to address the validity of permits that may or may not have been pulled to add, replace or alter a deck, garden shed, gazebo or greenhouse. Any concerns or questions regarding issues with your real property report, please contact your real estate lawyer. Note* The town of Morinville no longer requires compliance.
Edmonton Realtor Fiduciary Duties
Real Estate Agents in Edmonton and the province of Alberta who is in an agency capacity for buyer or seller clients have duties mandated by the legal system called fiduciary duties. The position of the REALTOR® is a fiduciary capacity, acting in the best interests of the client.
- Obedience: Your real estate agent must obey your instructions as long as it is legal and in accordance with your brokerage agreement.
- Loyalty: Your real estate agent must be loyal and keep your best interests ahead of those of any other party, including themselves.
- Disclosure: In the province of Alberta, the law requires real estate agents, whether in an "agency" capacity or not, to disclose material facts to their client. Material facts are those that, if known by the buyer or seller, might have caused them to change their purchase or sale actions. In a signed agency agreement, your real estate agent must disclose more than the material facts. They must disclose all known or suspected information regarding the purchase of the property.
- Confidentiality: A real estate agents fiduciary duty of confidentiality means that nothing learned about you can be disclosed including your business, financial, personal affairs or motivations. This confidentiality fiduciary duty must be maintained for eternity.
- Accounting: Your real estate agent is accountable for all documents and funds in the transaction. Accurate reporting of the whereabouts of all monies pertaining to the transaction and the ultimate disposition. All documents are to be kept for at least six years.
- Reasonable Care: The words "reasonable care" are only finally fully defined in many cases by a judge or jury when it's too late to change your actions. Most Edmonton Real Estate Agents, as a rule of thumb, go by the ethics code "What we know, you know" when acting in an agency relationship.
Whether you work with a real estate agent in Edmonton under a "customer status" or a "client status", before signing any other paperwork, in Edmonton and the surrounding areas have a regulatory requirement to present and discuss our Consumer Relationship Guide with you which includes the real estate agency relationship you have chosen to work under. A copy of this form can be found at the Real Estate Council of Alberta.
Have a question about Edmonton Realtor fiduciary duties? Contact us.
Why You Should Always Pull a Land (Property) Title Search
Basic information on a property title will include:
- The current owners' name: In the event of an estate sale, probate may or may not have been completed and your real estate agent will ensure the person selling the property does have power of attorney. In the event, there is only one person on the title in a marriage, a dower consent will also be needed to complete the sale.
- The Legal description: The municipal or mailing address is different from the legal description and includes a block, lot and Plan number.
- The amount of the last mortgage, any second or third mortgages or the original purchase amount at the time of purchase or there may be a nominal fee.
Other things which can be revealed on a property title search may include:
- Outstanding or owing property taxes, special assessments, delinquent condominium fees which have not been paid by the seller.
- Outstanding creditors including other financial institutions and businesses for things like unpaid vehicle loans, furniture stores, construction loans, personal loans, etc
- A lis pendens, which is normally added by a lawyer during divorce procedures and "freezes" the transfer of a property until all parties are satisfied.
- Easements and Liens from a third party, such as the municipality, utility company or Environmental liens, who may have rights to use part of your property.
- Covenants are restrictions on the land that can limit what can be built on it, where it can be built and from what materials it may be built. Breaching a covenant can have serious consequences so it is necessary to be aware of any covenants on your property.
What is a Real Property Report?
A Real Property Report (also known as the RPR) is a legal document that clearly illustrates the location of significant visible improvements relative to property boundaries. It is a plan or illustration of the various physical features of the property, including a written statement detailing the surveyor’s opinions or concerns.
Who needs a Real Property Report?
Part of the standard real estate contracts in Alberta will have a term in the document states the seller will provide a current real property report with the compliance report to the purchaser upon closing. Prior to putting your home on the MLS System and/or Realtor.ca, Sellers should order a new RPR to protect themselves from potential future legal liabilities resulting from problems related to property boundaries and improvements. Your REALTOR® can assist you with this process to ensure your property complies with municipal requirements.
Do I need a Real Property Report for a Condominium?
Bareland Condominiums require Real Property Reports. Conventional Condominiums do not require an RPR.
How does a Real Property Report protect you?
Purchasing a property may be the largest financial investment you ever make. With a Real Property Report, owners are aware of any boundary problems. They know whether their new home is too close to the property line, or part of their garage is on their neighbour’s land or vice versa. Since legal complications may occur if a sold property fails to meet requirements, a Real Property Report protects the seller.
What is on a Real Property Report?
The legal location description of the property and municipal address, dimensions and directions of all property boundaries, any improvements on the property, right-of-way or easements, any visible encroachments, a duly signed certification and opinion by an Alberta Land Surveyor and a permit Stamp where applicable.
How much does a Real Property Report cost?
The amount of work to prepare a Real Property Report varies between properties. Lot size and shape, number of buildings, natural features, age and availability of the property boundary information all affect the cost. However, if you are planning on selling your home in the near future, the sooner you order your Real Property Report, the more economical it will be plus any problems can be identified and resolved before a sale is finalized.
Should I get title insurance in place of a real property report?
If possible, it is best to have a current Real Property Report with compliance when buying or selling a home to ensure all property buildings are within the municipality guidelines. If an RPR is not an option, title insurance is a good substitute.
Title insurance without a Real Property Report and compliance is acceptable to most major mortgage lenders and will often provide coverage for the lender for known defects. Unlike other insurance products, there is only one premium paid at the time of closing which provides coverage to the owner throughout their ownership of the property. It also offers a wide range of protection for issues that are not covered by an RPR and compliance.
Title Insurance Benefits include
- Intervening registrations – Anything registered on the title between the time the lawyer submits to the Land Titles Office and the time of actual registration.
- Unknown Liens, encumbrances, tax arrears or defects in the title to a property.
- Unknown special assessments on condos that were implemented prior to closing.
- If an RPR or compliance is not obtained, it covers any defects that would have been revealed by an accurate up-to-date RPR and compliance.
- The forced removal of an existing structure with the exception of a boundary wall or fence where there is only limited coverage
- Forced compliance with work orders or deficiencies on an existing building permit.
- Loss of priority due to matters such as construction liens, agreements on a title, and other mortgages.
- Another party claims an interest in the property.
- Protection against title defects or encumbrances that were unknown or undiscovered at the time of closing.
- Protection against identity theft, mortgage fraud, and fraud against the title.
- Cost savings. Typically, the cost for title insurance is far less than the cost of an RPR and compliance and is available on short notice
Drawbacks of Title Insurance
- It is an insurance product. This means when an issue arises, it may not be covered by the policy and if there is coverage the insurer can decide the method used to solve the issue which may not be the preferred choice of the insured party.
- There is a lack of disclosure and certainty, especially for the buyer, at the time of closing. If an issue is discovered later, it is more difficult to pursue the seller for a fix after closing.
- There is no coverage for known defects, except for some coverage for the lender only.
- There must be some form of enforcement or government action to trigger coverage in most cases. For example, the previous owner did renovations that do not meet the requirements of the building permit or development permit. The title insurance will only pay for the cost to fix these deficiencies if there is some form of enforcement and not simply due to the deficiencies.
- It does not guarantee that all structures will remain in the current state. For example, if the municipality mandates the alteration or destruction of a certain structure, the title insurance company may pay for the cost of appealing that decision however they cannot guarantee a favourable result.
- The coverage of Title Insurance is for the buyer only (not the seller).
- If a buyer or their lawyer purchases a lender only policy that is sufficient to close the deal however the buyer still has no title insurance protection.
- There is no specific protection or coverage for the seller. If a claim is made and the title insurance company determines it is the seller who created the deficiency, the title insurance company can pursue the seller for recovery of the costs they have paid.
- In most instances, title insurance only defers the need to deal with a particular issue. It does not solve it. The issues will still be there when the property is resold.
- Title insurance cannot be passed onto a new owner. Every new owner must purchase their own policy.
For more information on real property reports and the effects on the resale of your residential dwellings and a free Edmonton Home Evaluation, contact one of Remax Elite Realtors.