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In a competitive market, you may feel you need to tailor your offer to appeal to the seller. In a multiple-offer situation, you might even consider making a condition-free offer to stand out from the other buyers. This strategy may make your offer stand out, but it’s not without its risks.

Conditional versus Condition-free Offers 

Most offers to purchase include criteria, or conditions, that must be met before the purchase can be completed. These criteria must be written into the offer to purchase, with an exact explanation of how the condition will be met, and when the condition must be met by. If the buyer does not waive conditions by the agreed upon deadline, an offer to purchase becomes void.

A condition can be anything the buyer and seller agree to, as long as it is written in the signed offer to purchase. Typical conditions include conditions for a buyer to: 

• secure financing
• complete a home inspection to their satisfaction 
• review condominium documents to their satisfaction
• finalize the sale of their current property

So, a conditional offer has criteria attached, whereas a condition-free offer is an offer to purchase property with no conditions or criteria attached. 

Risks of Condition-Free Offers 

Conditional offers allow buyers and their licensees to perform due diligence research on a property, like getting a home inspection and properly reviewing all relevant information such as the title or condominium documents. Conditional offers also allow buyers to secure financing for the property, typically through a mortgage.

But you really want this house, and you have pre-approval for a mortgage, so it’s no big deal to submit an offer condition-free, right? Not necessarily. It’s important to understand that a mortgage pre-approval does not guarantee you will secure financing. Any changes to your financial circumstances, interest rates, or other factors could threaten your ability to secure approved financing. It is also important to note that at the pre-approval stage the property is not yet known, and there could be issues based on property type, location, or value that will impact the financing available. 

When you make an offer without approved financing in place and without inspecting a property, its title, or its condominium documents (if applicable), it greatly increases the chances the deal with collapse.

Offers to purchase are contracts and are usually submitted with initial deposits from the buyers. These deposits are typically thousands or tens of thousands of dollars. Depending on the wording in the condition-free purchase contract, if a buyer fails to complete the purchase as stated, they may forfeit their deposit. So, you could end up losing both the house and your savings. You may even face legal action by the seller for breach of contract. 

Even if the seller accepts your condition-free offer and the deal closes with you taking possession, you may end up with a property that is a money pit. Without a home inspection and proper review of documentation, you may discover property defects or stigma too late. 

Make an Informed Decision

Before placing a condition-free offer, talk to your real estate licensee about potential consequences, and be sure to talk to your mortgage broker about the financing implications. Your licensee has a duty to advise you about the risks and possible implications of condition-free offers so you can make decisions knowing the relevant information.

After learning of the risks, if you still wish to proceed with a condition-free offer, your licensee may be able to perform some due diligence on the property prior to making the offer. Talk to your licensee about performing a title search, asking the sellers or their representative about material latent defects or other known facts about the property, and talking to neighbours about the property.

Should you wish to proceed with a condition-free offer immediately, your licensee must obey your lawful instructions.

An RPR is an essential legal document prepared by an Alberta Land Surveyor that outlines the boundaries of the property and identifies any encroachments or non-compliance issues.  It’s basically a high-level drawing of the property, the boundaries, and the buildings and structures on it, so buyers know exactly what they’re buying.

Most standard residential purchase contracts require the seller to give the buyer a current RPR with a municipal stamp of compliance. In addition, lenders often require a copy of an RPR for buyers to obtain financing. It is standard practice for buyers of new properties to receive the RPR from their builders and re-sale home purchasers to receive the RPR from the home seller.

Home buyers have the option of taking the requirement of an RPR out of the purchase contract, however if a seller is refusing to provide an RPR, you are encouraged to do further due diligence and ask more questions.

The first step is to have your licensee have an open and honest conversation with the seller’s licensee. Express your concerns regarding the absence of an RPR and reiterate your strong preference to receive one from the seller. It’s unlikely, but it’s possible that the seller may be unaware of the significance of an RPR or have other reasons for not providing it. Clear communication can help resolve any misunderstandings and find a mutually agreeable solution. If the seller refuses to give you a reason they do not want to provide an RPR, there are other ways to protect yourself.

In cases where an RPR is unavailable, you can: 

1. obtain title insurance: title insurance may protect you against any potential issues that could arise due to the absence of an RPR. Many third-party insurance providers offer title insurance, however, it’s essential to carefully review the terms and coverage of the insurance policy you are considering before proceeding with signing the purchase contract.
2. consider a price adjustment: another solution is to have your licensee negotiate a price adjustment with the seller to compensate for the absence of an RPR. By adjusting the price, you can factor in the potential risks and expenses associated with obtaining an RPR independently.
3. conduct a survey yourself: if the seller refuses to provide an RPR,, you can hire a professional surveyor to conduct a survey of the property. Although this can be an additional cost, it will provide you with an accurate representation of the property’s boundaries and potential encroachments.
4. seek legal advice: in more complex situations, it may be necessary to consult with a real estate lawyer who specializes in Alberta property law. They can review your specific circumstances, evaluate potential risks, and guide you through the legal aspects of the transaction.
5. reconsider the purchase: there may be several reasons why the sellers are hesitant to provide an RPR. In some cases, it may make sense to consider the risks/benefits of the purchase. If it’s contractually possible, you could consider walking away from this purchase in favour of one with less risk involved.

Buying a home is a significant investment, and it’s important to make informed decisions to protect your interests. Although encountering a seller who refuses to provide an RPR can be frustrating, there are alternatives and steps you can take to mitigate the risks. By communicating effectively and seeking guidance from your real estate licensee and other professionals, you can navigate this situation with confidence and ensure a smooth home buying process.

For more information on real property reports, please click here.

 

I’m selling my home, and the potential buyers also want to use my real estate professional to represent them. Is that allowed?

Yes, that’s allowed. The situation you’re referring to is called transaction brokerage. Transaction brokerage is a service option when your real estate professional represents a buyer client interested in purchasing the property in which you are the seller client. The reverse is also true—transaction brokerage is a service option when you’re interested in buying a property and the property’s seller is also represented by your real estate professional.

When a real estate professional works on behalf of only one client in a transaction—the buyer or the seller—they have legal responsibilities, which include:

• undivided loyalty to their client
• acting in their client’s best interest at all times
• the duty to avoid conflicts of interest
• the duty to disclose conflicts of interest when they arrive.

Transaction brokerage changes the services your real estate professional is able to provide to you and to the other party in the transaction. A real estate professional who is working with both the buyer and the seller in a transaction cannot fulfill all of their legal responsibilities because there is a conflict between the best interests of the buyer and those of the seller. The buyer wants to pay as little as possible for the property, while the seller wants to sell their property for the highest possible price. It is impossible for a real estate professional to advocate for and represent the best interests of a buyer client AND seller client in the same transaction.

This is when and why transaction brokerage becomes an option. In transaction brokerage, the real estate professional will provide facilitation services to you and the other party. These services include:

• helping the buyer and seller negotiate an agreement
• giving the buyer and seller property statistics and information, including comparative information from listing services and local databases
• providing and preparing agreements of purchase and sale, and other relevant documents according to the buyer and seller’s instructions

A transaction facilitator has to treat both parties in an even-handed, objective, and impartial manner. They must remain neutral, not advocate for either you or the buyer, and they cannot provide confidential advice.

Before a real estate professional proceeds with transaction brokerage, both the buyer and the seller need to provide their informed consent by signing an Agreement to Represent both Buyer and Seller. Informed consent means each client understands the facts, implications, and future consequences of providing their consent. You do not have to consent to transaction brokerage. If you don’t consent to it, or the other party doesn’t, there are other options available to you such as seeking representation from a different real estate professional.

I saw a house for sale, and I want to check it out—will I have to sign a contract to get a real estate professional to show me the house?

The short answer is no. If you see a house for sale and you simply want a real estate professional to show you that house, you’re not required to sign a contract.

Simply viewing a home with a real estate professional doesn’t trigger a regulatory requirement to sign a contract with that real estate professional. However, if you start sharing confidential information such as your motivation for buying or your financial qualification, the real estate professional has a responsibility to clarify your working relationship, at which point they are going to provide you with some documents to review.

In the process of clarifying your working relationship, the first document a real estate professional should present to you is the Consumer Relationships Guide. The Consumer Relationships Guide is a mandatory document for real estate professionals when they begin working with a buyer or seller of residential real estate. It explains the different types of working relationships between real estate professionals and consumers.

The Consumer Relationships Guide is not a contract. It does not commit you to a specific ongoing working relationship with your real estate professional, but it is an essential information piece for consumers to understand what working with a licensed real estate professional entails. Among other things, it discusses responsibilities and obligations.

The Consumer Relationships Guide contains an acknowledgement that consumers have to sign indicating they’ve read the Guide, understand it, and have been provided with an opportunity to ask the real estate professional questions about it. Consumers need to review and sign the Guide before entering into any contract with a real estate professional.

Some real estate professionals may actually present the Consumer Relationships Guide and request that you sign the acknowledgement even before showing you a single property, but that specific practice is not a requirement.

I’ve recently started hearing reports about radon in Alberta homes. If I’m buying a home in Alberta, is it something I should be concerned about?

You’re right to be asking this question. A lot of people aren’t familiar with radon, but they should be.

Radon is an odourless, tasteless, colourless radioactive gas that is the by-product of uranium decay. Uranium occurs naturally in soil and rock formations, and places with higher than normal uranium deposits, such as Alberta and Saskatchewan, have higher radon levels.

Radon seeps through the earth and into basements, where it can become trapped because of the efficient way our homes are sealed from the outside elements.

Prolonged exposure to radon can lead to health problems, including lung cancer. In fact, after smoking, radon gas is the leading cause of lung cancer.

Download the radon fact sheet for more information.

Unfortunately, there’s not much that can be done during the offer and negotiation phase of a real estate transaction because reliable radon tests take 90 days to complete. That’s much longer than a typical offer to purchase timeline and time for condition removal.

However, some Alberta homeowners are having their homes tested for radon knowing what a serious health issue it is. If you find a home you’re interested in, ask the seller if they’ve had their home tested and ask for the test results. If the radon test showed high levels of radon (higher than 200 Becquerel), that’s considered a material latent defect that MUST be disclosed to prospective buyers unless a radon mitigation device is installed prior to listing.

The good news when it comes to radon is it’s a solvable problem. Even if you fall in love with a home that hasn’t had a radon test or the results are high, a radon mitigation device can be installed to vent radon gas outside the home from the basement. Mitigation costs vary, but are often not more than $2,000-$3,000. Hire a Certified Radon Technician to install the device to ensure it’s done properly.

If you buy a home that hasn’t had a radon test done, we encourage you to proceed with a radon test within 90 days of possession. This is health issue, and radon testing and mitigation is money well-spent. For more information about radon, go to Health Canada’s website and search “radon.”

Whether the seller is required to disclose will depend on how the property is listed.

Some local real estate boards in Alberta may have rules around listing a property using their online listing database. Although sellers do not have to disclose to buyers if their property is conditionally sold to another buyer, some listing services require that upon acceptance of a conditional offer, any property listed on their platforms must be reported as “pending.”

It is important to read your listing agreement carefully before signing it so you understand the specific rules of the listing service(s). Sellers should also ask their agent about the rules around advertising conditional sales on listing databases they plan to market their property.

Remember that conditionally sold is not the same thing as sold. If the conditional offer falls through, the seller may begin the process of attracting potential buyers again if there are no other offers pending.

Even if the listing service doesn’t require that a pending sale be disclosed, a buyer’s agent can always ask if it is. In that case, the seller has two options: they can instruct their agent to answer the question—if they choose to have their agent answer, they must answer it honestly—or they can instruct their agent not to answer. If the seller’s agent refuses to answer the question, buyers can probably read between the lines. Choosing not to answer a question can be an answer in itself.

If you are a buyer and you love a property, think about going to see it even if it is conditionally sold. This way, if the first conditional sale falls through, you’ll be prepared to make an offer right away or submit an offer to be considered in the event the first sale falls through. Your agent can talk you through the pros and cons of these strategies.

If you are a seller, make sure you understand the requirements of disclosing any conditional sales for the online listing databases on which you plan to list your property. If the listing service requires pending sales be disclosed, you will have to abide by these rules, or you may not be permitted to use that service to market your property.

Want to share this by email or on social media? You can link directly to the article: Does the seller have to tell potential buyers that a house is conditionally sold? 

I want to buy a new build home from the builder, but I don’t want to work with the builder’s representative. I want to work with my own agent, is that allowed? Will it cost me more money?

Yes, you’re allowed to work with your own agent. The builder’s representative is representing the builder’s interests, and your real estate professional will represent your interests in negotiations with the seller (builder).

RECA always recommends having your own representation when buying a property, whether it’s a new build, resale, a condo, or even a commercial or rural property. While builders can’t stop you from having your own representation, it is possible you’ll come across one that wants to deal with you, as the buyer, directly. If that’s the case, your real estate professional can offer you advice and guidance behind the scenes but they won’t be dealing directly with the builder or the builder’s representative.

When you hire a real estate professional to represent you, you’re required to enter into a written service agreement. The written service agreement sets out the roles and responsibilities of your real estate professional, and your obligations to that individual. It also sets out how your real estate professional will be paid.

Typically, buyer’s representatives are paid through a portion of the commission the seller pays. Some builders, however, do not offer commission to buyer’s agents. If this is the case, your real estate representative won’t be paid in the usual manner.

Your agreement may contain a clause that sets out if your real estate professional will not receive a portion of commission from the seller’s agent’s commission, you will owe compensation to your agent upon completion of your purchase. This compensation could end up being an out of pocket expense for you.

You may come across builders that have programs to pay commissions to real estate professionals who introduce a buyer to the builder, but this is not the same as having representation from a real estate professional throughout the process. In these cases, the builder is willing to pay commission to a real estate professional who introduces you – but then the builder expects to deal directly with you as the buyer, and you may not have the benefit of advice from your real estate professional.

RECA recommends carefully reviewing the fee portion of your written agreement before signing it.

If there is no mention of how your real estate representative will be paid in the event the seller or seller’s brokerage is not offering commission to a buyer’s representative, you need to talk about it with your real estate professional.  If you have concerns about a possible out of pocket expense in terms of compensation for your real state representative, get that out in the open at the beginning.

I just bought a house, and on possession day, I noticed the movable island from the kitchen, which I loved when I viewed the property, was gone. Was the seller allowed to take it with them?

The short answer is yes, the seller was allowed to take the movable island with them. A movable or detached island is an example of an unattached good—these are movable items that are not included in the sale of a property unless agreed to, in writing, by the parties.

Unattached goods include items such as wall art, area rugs, non-built-in appliances such as microwaves, and even curtains. Unless otherwise agreed to, sellers can take movable items from the property before the buyer takes possession.

The opposite of unattached goods are attached goods. Attached goods are items that you cannot remove from a property without causing damage to the property. For example, chandeliers, built-in appliances such as dishwashers, and curtain rods and brackets are attached goods. Unless otherwise agreed to, sellers are expected to leave attached goods behind.

However, the good news for buyers is, if there is something you like in a property you are considering buying, but it’s an unattached good, all is not lost. If you want a particular unattached good included in your purchase of the property, list it as an inclusion in your offer to purchase. Now, it’s subject to negotiation between you and the seller.

The seller may agree, or they may remove it from the list of inclusions in a counter offer. It is up to the buyer and seller, with the help of their real estate representatives, to negotiate the transaction, and that includes what items are included or not.

When it doubt, write it out. This is the best way to ensure you know what is included when you’re purchasing a property. For larger more expensive items, you may wish to include the make, model, and serial number. This may eliminate a seller’s urge to switch nice appliances, for example, with less expensive, used items.

Now, what do you do in the event the seller was supposed to leave something behind, but didn’t? If you don’t find out until after possession, you need to call your lawyer as it is now a legal issue between you and the seller. Your real estate professional can attempt to discuss the matter with the seller’s representative, but if things aren’t fixed to your satisfaction, your only recourse is to speak to your lawyer.

Want to share this by email or on social media? You can link directly to the article: How do I know what items come with the house I want to buy?

There was a major hail storm after a seller accepted my offer to purchase their home, and the house needs a new roof. Who is responsible for it?

Until the deal closes and you take possession of the property, the seller is responsible for the property. Any damage to the property or to the items included in the sale, are the sole responsibility of the seller until your purchase funds are transferred and you take possession of the home.

When you take possession, the property – and its inclusions (appliances, etc.) – should be in the same condition as when you viewed it and submitted your offer to purchase.

Even if the property is vacant, and has been for weeks, it is still the seller’s responsibility to maintain home insurance on the property.

As the buyer, you should make sure you arrange for your home insurance to begin on your possession day, even if you aren’t moving in right away. As soon as you take possession, insuring the property is your responsibility.

If an environmental disaster, such as a hail storm or wild fire, damages the property in the time between the seller accepting your offer and possession day, have your agent talk to the seller’s agent to confirm the seller is handling the damage. If the seller confirms they’re handling the repairs, you may wish to add an addendum to your accepted offer to purchase that outlines the seller’s responsibility to replace the roof prior to possession day, or you may ask the seller to agree to you holding back a small portion of the purchase funds until the roof is repaired. Make sure any agreements between you and the seller are in writing.

If there is any resistance on the part of the seller, either to fixing the damage or to putting details and agreements in writing, you need to talk to a lawyer for legal advice.

Likewise, if either party wishes to end the transaction in light of the damage done to the property, or if the seller refuses to repair the roof prior to possession, contact a lawyer for legal advice.

I’ve taken possession of my new home, but pictures, sold price, and its address are still on the listing agent’s website, advertised as sold. I want them to take down the pictures and address. Can I make them?

It depends if the information they post on their website is personal information or not. Personal information is defined in the Personal Information Protection Act as information about an identifiable individual. This means that if the information could identify you, it’s personal information, and someone needs your consent to use it.

In real estate, a picture of the exterior of your house, information about its neighbourhood, and even the address are likely not personal information. All of that information is readily available on sites such as Google Maps, but the law is less clear when this information is combined with a statement that the property was just sold, and at a certain price.

Though it has not been tested in court yet, this combination of information could be considered personal information. It’s because of legal grey areas like this that RECA recommends real estate professionals get written consent from buyers of their listings if they want to continue advertising a sold listing after possession takes place. Once possession takes place, the seller is no longer the person who provides that consent; it’s the new owner – the buyer.

If there is any doubt about whether or not there is personal information in an advertisement, real estate professionals should try to get written consent from the property owner before advertising, or don’t include the information in the ad.

If you are concerned that a real estate professional’s website contains your personal information through posting a sold listing, talk to the real estate professional in question. There are strict confidentiality rules for real estate professionals, and privacy legislation may apply too.  You can also bring the issue to the real estate agent’s broker.

You may not be able to make a real estate professional take an ad down if it doesn’t contain your personal information, but if you’re still uncomfortable with it because you believe it shares too much about your property, a true professional should be open to hearing your concerns and working with you to address them.

Want to share this by email or on social media? You can link directly to the article: I’m the new owner. Can I make the listing agent remove the listing from their website?

I made an offer to buy a property, which was conditional on financing. My mortgage broker told me the lender is behind and I won’t be able to get approval until the day after the date in the contract by which I need to waive my conditions. Can the deal still go forward?

Yes, your deal can still go forward; however, you will have to amend your offer to purchase to reflect a later condition-removal date and have all parties agree, in writing, BEFORE the original date passes.

If you ask for a short extension, most sellers will agree. They likely want the deal done as much as you do. You, your real estate professional, and the sellers can negotiate a date that works for both parties, but the amendment to your purchase contract must happen before the deadline.

Your purchase contract is a legally binding contract between you and the seller. Through it, you agreed to try to obtain financing and waive that condition by a certain date. If that date passes and you have not waived the condition, the contract is null and void. Neither party has any responsibility to the other. In fact, at this point, the seller could even accept an offer from another buyer.

Conditions on your purchase contract are important, and you should treat them as such. When you write your offer to purchase, think about how much time you might need to satisfy the conditions you’re including. Your real estate professional or mortgage brokerage professional can also help you figure out how much time you might need depending on the condition.

It’s entirely up to you what condition removal date you put in your offer, but there is no guarantee the seller will agree to your date. There may be some negotiation between you and the seller. Ultimately, the seller doesn’t want to agree to a long condition period because during that period, they’re probably not going to extensively market their home. In the event you don’t waive your conditions and their home remains on the market, they may have lost valuable time and possible buyers.

If your condition date passes, and then you find yourself in a position to waive your conditions – but you never amended the original purchase contract, you’re going to have to write a new offer to purchase, and get the seller to accept it. Your prior offer became null and void the moment you missed the condition removal date.

Every deal is unique, but your real estate and mortgage professional will have the experience to help you include an appropriate condition date AND meet it.

I’m in a time crunch and need to purchase a property fast. I’ve made an offer that expires in the extreme short-term, but the seller’s agent refuses to take it to the seller, saying the seller wants to consider all offers at a later date. Is this allowed?

Yes. The seller controls how they want to consider offers. If they instructed their agent to hold off on presenting offers until a certain date or time, then the agent is obligated to follow that instruction.

There is nothing stopping your agent from asking the seller’s agent to talk with the seller and see if they’ll make an exception, but if they decide to not review your offer until the date they set, there is nothing you can do about it.

Everything is up to the seller.

We’d like to think that in such a situation the seller’s agent discussed the pros and cons of such a strategy with their client. But, if knowing those pros and cons, the seller still wants to proceed with holding off, it’s their choice.

When sellers wait to consider all offers at the same time, it’s usually in a hot seller’s market where there is a higher likelihood of multiple offers. This has been common in Toronto and Vancouver, but it’s less common right now (especially in Alberta).

In a hot seller’s market, when a buyer swoops in with an offer they want seen before the seller’s offer date, this is called a “bully offer.” If you ask the seller’s agent to ask the seller to review and consider your offer early, this could still spark the multiple offer situation the buyer with the bully offer was trying to avoid.

The seller’s agent will likely suggest to the seller that they tell other buyers who showed interest in the property that a bully offer has come in. This may lead to other interested buyers immediately putting in their own offers to compete with it.

Unfortunately, the sellers may not review your offer on time or, they may review it, but not accept it. If you are in a rush to buy, it’s a good idea to make sure the first offer you put in is your best one, and have some back-up properties in mind just in case the offer isn’t accepted or looked at within your timeframe.

I’d like to get out of my home purchase because the seller’s real estate agent lied to me about something. If I file a complaint with the Real Estate Council of Alberta, will that get me out of my purchase?

The Real Estate Council of Alberta (RECA) won’t be able to help you get out of your purchase, but you are certainly welcome—and encouraged—to file a complaint against the seller’s agent if you believe they lied to you.

RECA’s complaint-handling process is disciplinary in nature. If an industry member breaches the legislation and industry standards that are in place, for example by misrepresenting something, RECA can issue discipline against them. However, RECA can’t get a consumer their money back nor can RECA’s investigation actions bring an end to a purchase/sale between a buyer and a seller.

Home purchases are contractual agreements between consumers—buyers and sellers. Through the Offer to Purchase that you submitted, which the seller accepted, you created legal and binding obligations. RECA does not get involved in these types of contracts between consumers.

In the event that the lie was significant enough that you believe by proceeding with the purchase, you will be financially or otherwise disadvantaged, I suggest you talk to a lawyer as soon as possible. After your purchase closes, you may want to consider legal action against the seller’s agent, or the seller, if you believe they were involved in the misrepresentation.

When you file a complaint with RECA, RECA will review it, collect evidence, and conduct interviews. Penalties issued against industry members can be significant; up to $25,000 per breach—however, despite any of our investigative findings, our disciplinary process will not award you any damages nor will it enable you to get out of your purchase.

You may have heard that RECA has a Consumer Protection Fund, also referred to as the Assurance Fund. The Fund compensates consumers who suffer a financial loss as a result of fraud or breach of trust by an industry member, or an industry member’s failure to disburse or account for money held in trust. Consumers do not receive compensation from this Fund as a result of filing a complaint. Rather, there is an application process which, in some cases, requires a consumer to file a lawsuit against the industry member in question. Visit reca.ca for more information about the Consumer Protection Fund.

I saw on the news that fraudsters are being charged with unlicensed real estate trading. Why do you need a licence to buy or sell property?

First things first. You don’t need a licence to buy or sell property; consumers are always free to buy or sell their own property. When you need a licence, though, is when you’re helping someone else buy or sell property.

The individuals you’ve seen in the news are people who are not licensed as real estate professionals, who say they will help consumers buy and sell property, but instead, they are actually participating in various fraud schemes. That’s why they’re in the news.

Still, unlicensed trading in real estate remains a serious issue and not just because of the fraud that sometimes results. Under the Real Estate Act of Alberta, anyone trading in real estate, dealing in mortgages, performing real estate appraisals, or providing property management services requires a licence from the Real Estate Council of Alberta (RECA). It’s the law.

Buying a home is one of the largest financial commitments most people will ever make. Why would you want to trust that transaction with someone who doesn’t have education, experience, and a regulatory body behind them?

When you hire a licensed real estate professional, you can trust they’ve completed pre-licensing education, their background has been reviewed, they carry errors and omissions insurance, they’re required to complete ongoing education, and you can feel confident that a regulatory body will hold them accountable for their actions. All real estate licensees are required to carry errors and omissions insurance, and there’s a Consumer Protection Fund available in the very rare event a consumer suffers a financial loss as a result of fraud, breach of trust, or a failure to disburse or account for money held in trust by an industry member.

Think about it, you don’t want people driving on the road who don’t have a driver’s licence, right? If someone has a driver’s licence, it means they passed a competency test, and there’s an unwritten agreement that they’ll follow the rules of the road. If they don’t, they can be fined or even lose their licence. The same thing applies to licensed real estate professionals. If they violate the rules, RECA has the authority to discipline them, which can include licence suspension or cancellation.

When someone doesn’t have a real estate licence, and represents a consumer in a real estate deal, the consumer has no assurances that the person has knowledge or training, and there’s nowhere to go—other than court—if something goes wrong.

https://www.alberta.ca/condominium-information

I’ve just been elected to my condo board. How do I know which responsibilities fall under the condo corporation, the condo board, and the condo manager?

Making sense of the different bodies responsible for overseeing a condominium complex’s day-to-day operations can be a bit overwhelming at first. Hopefully, I can help clear up some of the confusion.

Condo Corporations

The condominium corporation is made up of, and represents, all unit owners of that condo complex. So, if you own a unit in the condo complex, you are a part of the condo corporation. It is a legal entity that has all the rights and responsibilities of any other legal entity (i.e., individual or business).

In Alberta, the Condominium Property Act governs the operations of condo corporations and sets out responsibilities related to managing the common property, preparing the annual budget, collecting fees, holding insurance, and enforcing the corporation’s bylaws and rules. The Condominium Property Act also sets out the requirement that all duties of the condo corporation be carried out by an elected board of directors (i.e., the condo board).

The Condo Board

As with other elected entities, the condo board represents and acts on behalf of the individuals that elected it. In this case, the individuals that make up the condo corporation.

So, the condo corporation is synonymous with all unit owners in the complex and is responsible for the business of the corporation. And the condo board is elected by the condo corporation to carry out the business on its behalf.

Still with me? Okay, so this is where a condo manager may come into the equation.

Condo Managers

It takes a lot of work to manage a condo complex and many volunteers on the condo board, understandably, don’t have the time. While the condo board can choose to self-manage the complex, they also have the choice to hire a condominium manager to oversee the day-to-day tasks.

The tasks that the condo manager are ultimately responsible for will be determined by the contract or written service agreement between the condo corporation and the condo management brokerage. These agreements usually expire annually, to be renewed and renegotiated and voted on by the corporation at the Annual General Meeting (AGM). As a new director on your condo board, it’s important to review and understand the current written service agreement.

Your condo board should also be aware that as of December 1st, 2021, condo management companies (brokerages) and individual condo managers must hold a licence with RECA. Check to see if your condo manager is licensed using the Find a Licensee tool on reca.ca

Want to send this by email or share it to social media? Link directly to the article: Which responsibilities fall under the condo corporation, the condo board, and the condo manager?

As of December 1, 2021, the answer is yes. If your condominium board decides not to self-manage their corporation and instead opts to hire a professional management company, that company needs to hold a licence with RECA.

Condominium management services are when an individual or brokerage is exercising the power, or performing the duties of, a condominium corporation on behalf of that corporation. Condominium managers can be responsible for collecting condominium fees, arranging property maintenance (according to instructions from the condominium’s Board of Directors), assisting the Board of Directors with enforcing the Bylaws, and other duties set out by the corporation.

There needs to be a written service agreement in place for a condominium manager to provide management services to a condominium corporation. The Real Estate Act Rules specify the minimum content of service agreements, although service agreements will typically be tailored to the needs of the specific condominium corporation. It is up to the condominium corporation’s board to determine what services they require and to ensure they are detailed in the service agreement.

All condominium management licensees are required to have Errors and Omissions insurance. The condominium manager should also ensure the condominium corporation they manage has liability insurance, including fraud coverage that extends to the condominium manager, brokerage, and employees. This ensures the condominium corporation is adequately protected should any mistakes or wrong-doing occur.

To check if a condominium management company is licensed, you can use RECA’s “Find a Licensee” search tool on reca.ca

You’ve got questions. He’s got answers.

Charles Stevenson is the Registrar at the Real Estate Council of Alberta. Buying and selling real estate in Alberta can be confusing, but it doesn’t have to be.

If you have a new question for Charles, please email askcharles@reca.ca.

I made an offer to buy a property, which was conditional on financing. My mortgage broker told me the lender is behind and I won’t be able to get approval until the day after the date in the contract by which I need to waive my conditions. Can the deal still go forward?

Yes, your deal can still go forward; however, you will have to amend your offer to purchase to reflect a later condition-removal date and have all parties agree, in writing, BEFORE the original date passes.

If you ask for a short extension, most sellers will agree. They likely want the deal done as much as you do. You, your real estate professional, and the sellers can negotiate a date that works for both parties, but the amendment to your purchase contract must happen before the deadline.

Your purchase contract is a legally binding contract between you and the seller. Through it, you agreed to try to obtain financing and waive that condition by a certain date. If that date passes and you have not waived the condition, the contract is null and void. Neither party has any responsibility to the other. In fact, at this point, the seller could even accept an offer from another buyer.

Conditions on your purchase contract are important, and you should treat them as such. When you write your offer to purchase, think about how much time you might need to satisfy the conditions you’re including. Your real estate professional or mortgage brokerage professional can also help you figure out how much time you might need depending on the condition.

It’s entirely up to you what condition removal date you put in your offer, but there is no guarantee the seller will agree to your date. There may be some negotiation between you and the seller. Ultimately, the seller doesn’t want to agree to a long condition period because during that period, they’re probably not going to extensively market their home. In the event you don’t waive your conditions and their home remains on the market, they may have lost valuable time and possible buyers.

If your condition date passes, and then you find yourself in a position to waive your conditions – but you never amended the original purchase contract, you’re going to have to write a new offer to purchase, and get the seller to accept it. Your prior offer became null and void the moment you missed the condition removal date.

Every deal is unique, but your real estate and mortgage professional will have the experience to help you include an appropriate condition date AND meet it.

I heard that if someone calls themselves a “contractor,” they don’t need to have a licence to provide property management services. Is that true?

No, that’s not true. The truth is it doesn’t matter what a person calls themselves. If they are providing property management services and they are not the owner of the property or an employee of the owner, they require a licence from the Real Estate Council of Alberta (RECA).

The Real Estate Act, which RECA administers, defines property management as:

• leasing, negotiating, approving or offering to lease, negotiate or approve a lease or rental of real estate;
• collecting or offering or attempting to collect money payable for the use of real estate;
• holding money received in connection with a lease or rental of real estate; and
• advertising, negotiating or any other act, directly or indirectly for the purpose of furthering the activities described in items 1-3.

Licensed property managers can find suitable tenants, deal with nuisance tenants, draft lease agreements, and regularly inspect and maintain property on behalf of a property owner. It is up to property managers and the property owners to negotiate the specific tasks the property manager will provide, but ultimately, before providing property management services, the property manager needs a licence.

Property manager licensing provides vital protection for property owners. Individuals must complete comprehensive education before becoming licensed as a property manager, they must also provide a Certified Criminal Record Check to RECA prior to receiving a licence, and there are ongoing education requirements.

If a property owner is working with a licensed property manager, they have the added protection of the Consumer Compensation Fund. The Fund compensates consumers who suffer a financial loss as a result of fraud, breach of trust, or a failure to disburse or account for money held in trust by an industry member in connection with a real estate trade, mortgage deal, or property management services.

If you work with an unlicensed property manager, and the property manager disappears and takes rental payments or damage deposits with them, your only recourse is through the courts.

As a property owner, you’re not required to hire someone to manage your rental or investment property, but if you do, take steps to protect yourself. Ensure that the company and individual you hire are licensed to provide property management services in Alberta. You can check if someone is licensed through RECA’s website at www.reca.ca.

As of December 1, 2021, the answer is yes. If your condominium board decides not to self-manage their corporation and instead opts to hire a professional management company, that company needs to hold a licence with RECA.

Condominium management services are when an individual or brokerage is exercising the power, or performing the duties of, a condominium corporation on behalf of that corporation. Condominium managers can be responsible for collecting condominium fees, arranging property maintenance (according to instructions from the condominium’s Board of Directors), assisting the Board of Directors with enforcing the Bylaws, and other duties set out by the corporation.

There needs to be a written service agreement in place for a condominium manager to provide management services to a condominium corporation. The Real Estate Act Rules specify the minimum content of service agreements, although service agreements will typically be tailored to the needs of the specific condominium corporation. It is up to the condominium corporation’s board to determine what services they require and to ensure they are detailed in the service agreement.

All condominium management licensees are required to have Errors and Omissions insurance. The condominium manager should also ensure the condominium corporation they manage has liability insurance, including fraud coverage that extends to the condominium manager, brokerage, and employees. This ensures the condominium corporation is adequately protected should any mistakes or wrong-doing occur.

To check if a condominium management company is licensed, you can use RECA’s “Find a Licensee” search tool on reca.ca

You’ve got questions. He’s got answers.

Charles Stevenson is the Registrar at the Real Estate Council of Alberta. Buying and selling real estate in Alberta can be confusing, but it doesn’t have to be.

If you have a new question for Charles, please email askcharles@reca.ca.

We’re about to put our house on the market but I’m worried about having strangers in my home. Who’s responsible if there’s damage to the property, my things go missing, or someone gets hurt?

It’s natural to feel concerned about your property during the real estate process. After all, you likely won’t be present when your home is being shown to potential buyers.

If you’re planning to hire a real estate agent, it’s their responsibility to exercise reasonable care and control of your property when your home is under their supervision. The buyers’ agent also bears the same responsibility.

Although not common, accidents can happen and things may go missing during showings. If your agent or the buyer’s agent was in control of the property at the time, depending on their insurance coverage, the damage or missing property may be covered.

That said, some belongings are priceless. If you have heirlooms, photo albums, jewelry, or important documents (like passports or birth certificates) in your home, you should consider moving them to a trusted friend or family member’s home, storage locker, or safety deposit box while your house is on the market. Your agent understands the flow of traffic through a house during a showing and can advise you on items that can or should be packed up in advance.

You can also protect yourself during the real estate process by making sure your house and its contents are adequately insured under your existing homeowner policy. Your own insurance should also protect you if anyone were to become injured or hurt while on your property.

I would also suggest that you talk to your real estate agent about any potential hazards that could exist on your property. Situations like a slippery sidewalk or a violation of the building code are a danger and are best dealt with before listing the property.

Your experience throughout the real estate process should be a positive one. If anything happens at your home during a showing that doesn’t seem right, talk to your real estate agent or their broker—they’re there to help.

My real estate agent says they’ll buy my house if it doesn’t sell in 90 days. Should I be wary?

Wary might not be the best word, but you do need to make sure you understand the details of the offer. This type of offer is a guaranteed sales agreement, and while there is nothing illegal or wrong with a real estate company offering this kind of arrangement, it is rarely the best option for consumers.

In a guaranteed sales agreement, a real estate brokerage agrees to buy a piece of real estate from a seller at a previously agreed upon price, if it hasn’t sold to someone else before a certain date. Only real estate brokerages can offer these agreements, not individual real estate professionals.

If you’re selling your home to buy another one, you may be interested in a guaranteed sales agreement for the home you own now. It could help you avoid owning two homes and paying two mortgages. A guaranteed sales agreement might give you the confidence to proceed with your new home purchase before selling your current one.

What sellers need to keep in mind in these arrangements is that the real estate brokerage wants to minimize its risk.

For example, it’s rare that a guaranteed purchase price will be based on the property’s listing price or the property’s market value. In most cases, the brokerage calculates the guaranteed purchase price using a formula where legal fees, carrying cost, and commission on the resale are subtracted from the purchase price. This minimizes the brokerage’s risk, but it can also greatly reduce how much that seller receives for their home.

Brokerages that offer guaranteed sales programs are required to have policies for those programs. Those policies should include how the brokerage sets the guaranteed sales price and who is in control of the property’s listing price during the listing period; it may not be the seller. It’s not unusual for a guaranteed sales agreement to include a clause that requires a seller to lower their listing price during the term of the listing. Remember, your real estate brokerage wants to minimize its risk. It prefers to sell your property to a buyer rather than to use the guaranteed sales agreement, and lowering the listing price can sometimes help that happen.

If your real estate brokerage offers you a guaranteed sale agreement, it’s up to you to decide whether you’re interested. Before you do, make sure you read and understand all of the fine print.

My real estate professional told me there is a standard rate of commission in Alberta, is that true?

It depends what they mean by “standard.” There is no legislative requirement or governing body that specifies the commission rate an authorized industry professional can or will charge.

The fact is, commission is something you can negotiate with your real estate professional. Some real estate professionals aren’t willing to negotiate their commission while others are. That’s their right. As a buyer or seller, you have the right to work with someone who charges a commission that you’re comfortable with.

Before choosing a real estate professional, you’ll likely want to compare the services and fees of a few real estate professionals. These interviews can help you understand the range of commission rates available, and the services provided at the various rates.

Typically, professionals calculate commissions by:

• a percentage of the sale price
• a flat fee or schedule of flat fees
• a fee for service
• a combination including any of these

Goods and Services Tax (GST) applies to real estate fees, as they are a “service.”

When you’re signing an agreement to work with a real estate professional, make sure you understand the commission arrangements. The service agreement you sign is a legal document and it’s binding. If you don’t understand something in it or you don’t agree with something, don’t sign. Seek legal advice or find a different real estate professional to work with.

While some businesses or companies may have specific commission structures, extensive changes within the Canadian real estate industry in recent years means there isn’t a standard commission rate.

I’m selling my home, and the potential buyers also want to use my real estate professional to represent them. Is that allowed?

Yes, that’s allowed. The situation you’re referring to is called transaction brokerage. Transaction brokerage is a service option when your real estate professional represents a buyer client interested in purchasing the property in which you are the seller client. The reverse is also true—transaction brokerage is a service option when you’re interested in buying a property and the property’s seller is also represented by your real estate professional.

When a real estate professional works on behalf of only one client in a transaction—the buyer or the seller—they have legal responsibilities, which include:

• undivided loyalty to their client
• acting in their client’s best interest at all times
• the duty to avoid conflicts of interest
• the duty to disclose conflicts of interest when they arrive.

Transaction brokerage changes the services your real estate professional is able to provide to you and to the other party in the transaction. A real estate professional who is working with both the buyer and the seller in a transaction cannot fulfill all of their legal responsibilities because there is a conflict between the best interests of the buyer and those of the seller. The buyer wants to pay as little as possible for the property, while the seller wants to sell their property for the highest possible price. It is impossible for a real estate professional to advocate for and represent the best interests of a buyer client AND seller client in the same transaction.

This is when and why transaction brokerage becomes an option. In transaction brokerage, the real estate professional will provide facilitation services to you and the other party. These services include:

• helping the buyer and seller negotiate an agreement
• giving the buyer and seller property statistics and information, including comparative information from listing services and local databases
• providing and preparing agreements of purchase and sale, and other relevant documents according to the buyer and seller’s instructions

A transaction facilitator has to treat both parties in an even-handed, objective, and impartial manner. They must remain neutral, not advocate for either you or the buyer, and they cannot provide confidential advice.

Before a real estate professional proceeds with transaction brokerage, both the buyer and the seller need to provide their informed consent by signing an Agreement to Represent both Buyer and Seller. Informed consent means each client understands the facts, implications, and future consequences of providing their consent. You do not have to consent to transaction brokerage. If you don’t consent to it, or the other party doesn’t, there are other options available to you such as seeking representation from a different real estate professional.

I just spent $50,000 to finish my basement with high-end finishings. Now, I’m listing my house for sale, and my real estate representative says she can’t include the basement square footage in the total size. Why not?

You developed your basement and it’s beautiful. You’re sure any potential buyer would agree that it looks great, and is definitely livable space. But, your real estate professional is correct, the square footage of your basement cannot be included in the size of your home for listing purposes.

In Alberta, real estate professionals are required to follow the Residential Measurement Standard (RMS) when listing a residential property for sale. The RMS contains nine principles that enable real estate professionals, as well as buyers and sellers, to determine and compare the size of residential properties. The RMS sets out the specific parts of a residential property that can be included in its size for listing purposes.

Above grade levels are the levels of a residence that are entirely above grade. Below grade levels are the floor levels of a residence that are partly or fully below grade. If any portion of a level is below grade, the entire level is considered below grade. Below grade spaces include lower levels and basements. The RMS size of a property is, essentially, the sum of its above grade levels. Below grade levels are not included in the RMS area.

Without the RMS in place, there would be little consistency in how real estate professionals, and their sellers, measure and describe their property. Some may want to include their basement (unfinished or not), some may include an enclosed sunroom, while others may include the space created by a bow or bay window.

The RMS provides a consistent means of measuring, and describing, residential property size in Alberta.

Sellers, and their real estate representatives, are welcome to include additional measurement information in their listings, but the primary size listed in the listing must be the size according to the RMS.

Sellers need to remember that size isn’t the only factor that will affect a property’s list or selling price. Other factors include location, condition, quality of finishing, layout, and even type of ownership. You may not be able to include the square footage of your basement in the total square footage of your home, but the features of your home will set it apart from other properties. Size matters, but it’s not the only thing that matters.

I hired a real estate professional to sell my home. The seller representation agreement (listing agreement) I signed is for four months. It’s only been two months, but I want to terminate the agreement, can I?

The short answer is yes, but it can be complicated.

The agreement you signed is a legal contract between you and a real estate brokerage to sell your home. It contains a start date and an end date, as well as provisions for ending the agreement early. If you and your real estate professional agree in writing to end the agreement before the end date, the agreement immediately ends.

If you change your mind about selling your home and your real estate professional agrees to end the agreement early, you may be responsible for reimbursing your real estate professional for reasonable expenses they incurred while your property was for sale. Those potential expenses need to be listed on the agreement when you sign it; your real estate professional can’t add them after the fact. These expenses may include, but aren’t limited to, reimbursement of advertising, measurement, or photography costs.

But, what happens when you want to end your agreement early and your real estate professional doesn’t agree?

If you want to end your agreement early because you want to work with a different real estate brokerage, there could be consequences. For example, if you begin working with another real estate brokerage, and your property sells, your first real estate brokerage could make a claim that commissions are payable to them since the brokerage didn’t agree to release you from the obligations of your agreement. You could find yourself owing commission to two brokerages.

Think carefully about why you want to end your agreement early. If it’s because you genuinely changed your mind about selling, perhaps your employment situation changed, be open and upfront with your real estate professional. You won’t be the first seller who has a change of heart or financial circumstances, but your real estate brokerage is under no requirement to release you from your agreement.

Another possibility is that your real estate professional may agree to a conditional termination of your agreement. Conditional terminations typically require the seller to agree in writing that they won’t re-list their property for sale with another real estate brokerage before the end of their original agreement.

If you want to end your agreement early because you and your real estate professional are not working well together or you have concerns about their performance, RECA encourages you to speak to their broker.

I’m selling my house, and the listing agreement says I have to pay my real estate agent commissions if my place sells after the agreement ends. Is that legal?

It sounds like you’re referring to the “holdover” clause, which is found in most residential listing agreements (seller representation agreements) in Alberta. And yes, holdover clauses are legal.

A holdover clause permits your real estate brokerage to collect its fee or commission from you if you enter into a purchase contract with a buyer within a specific number of days after your listing agreement ends and that buyer was introduced to your property during the term of the listing agreement. The length of the holdover period is negotiable between you and your real estate professional.

When a real estate professional lists your home, your listing agreement sets out that you will pay your brokerage in the event your home sells.

Imagine you have a 90-day listing agreement. On day 88, your real estate professional arranged for a showing of your home to a buyer. The buyer liked it, but had to think about it for a few days. On day 91, the buyer decides they want to buy your home. That buyer only knew about your home being for sale because of the listing you had on it with your real estate professional.

Assume you didn’t extend your listing agreement, on day 91, your home is no longer officially for sale but you still want to sell. The buyer that viewed your home on day 88 writes on Offer to Purchase for your home, and you accept their offer.

Now the holdover clause kicks in.

Because you’re selling your home to a buyer who was introduced to it during the term of your listing agreement, the holdover clause requires you to pay your real estate brokerage the commission you agreed to in your listing agreement.

Your real estate professional did what they set out to do – they sold your home for a price with which you were happy. They deserve, and have every right, to be paid for their work.

The holdover clause also protects a real estate brokerage’s commission in the unlikely event a buyer and seller want to work together to get a deal done, but they wait until just after the listing agreement ends merely so they don’t have to pay commission. If in such a case the buyer was introduced to the seller’s property during the term of the listing, the real estate professional deserves to be compensated for their work. Side deals between a seller and that buyer shouldn’t affect the ability of the seller’s real estate brokerage to collect its commission.

My elderly mother passed away at home. We are now selling her home, do we have to disclose that she died in the property?

Simply put, you are not required to disclose her death to potential buyers.

Sellers are required to disclose certain defects to potential buyers, but a death occurring in a home is not a defect.

When a death occurs in a home, the property may be considered a “stigmatized property.” A stigmatized property is one that has an unfavourable quality that may make it less attractive to some buyers. That quality, though, is unrelated to the physical condition or features of the property.

As a seller, you are not required to disclose stigma to potential buyers. Stigmas are different from material latent defects, such as un-remediated hidden flood damage or mould, which sellers are required to disclose.

Some stigmas include:

• a suicide or death occurred in the property
• the property was the scene of a major crime
• the address of the property has the wrong numerals
• reports that the property is haunted

Potential buyers’ different values, perceptions and backgrounds will affect the significance of a potential “stigma.” Some buyers won’t care about a death occurring in the property, while others may be completely put off by it.

Although you are not required to disclose stigma to potential buyers, because some buyers may have concerns about stigmas, those buyers can ask their real estate representative to ask your representative about possible stigmas. You don’t have to answer their questions, but if you choose to, you must do so honestly.

If you decide not to answer, a buyer has to decide if they are comfortable proceeding without an answer. Remember that not answering may turn the buyer off of your property more than simply responding honestly; it will depend on the specific buyer, their particular concerns, background, and perceptions.

My townhouse is listed for sale. There was a showing earlier today, and I found out those “buyers” just viewed my home to see it as a comparable for their own listing. Is that allowed?

The short answer is, no, it shouldn’t be.

When you list your property for sale, you expect that showings of your property are to potential buyers. Unless a buyer or the buyer’s representative discloses it to you beforehand, any other reason for a showing is dishonest through omission.

Real estate professionals have a requirement to be honest with their clients and with third-parties. That means that a buyer’s real estate professional has to be honest with you and your real estate professional.

It is reasonable for you to expect that buyers booking a viewing of your property are doing so with the potential for purchasing the property. If their reason is different, then it is reasonable for you to expect them, and their agent, to be upfront about it.

No one wants to have to keep their house in show-home-ready condition, and vacate the premises for a showing unless there is real potential the buyers are interested in buying. This may be particularly true if you have a young family and leaving at the spur of the moment for last-minute showings or showings at bedtime are particularly inconvenient.

There are also things you can do – and discuss with your agent – to lower the likelihood of showings for ulterior purposes. You can ask your agent to not allow viewings from people who don’t appear to be serious buyers. For example, this may mean your agent asks buyer’s agents to only bring buyers who are pre-approved for a mortgage.

As the seller, you control the process buyers must go through to view your property. If you want to set specific times during which viewings are allowed, you can. If you want to only admit buyers who are pre-approved, you can. Ensure your agent writes those instructions in the listing.

Remember, though, sometimes buyers come when you’re least expecting it – and any attempt to reduce showings or limit availability for showings may be detrimental to your listing.

I just listed my home, and my real estate agent told me we had to hire someone to professionally measure my home. The measurement was done, and now my agent sent me the bill. What should I do?

The first thing you need to do is check your Seller Representation Agreement (listing agreement). That agreement outlines your responsibilities and the responsibilities of your real estate professional, including who is responsible for costs that may be arise during the listing. If the agreement you signed states the seller is responsible for additional costs, or it states the seller is responsible for paying third-party services, such as measurement companies or photographers, you’re going to have to pay that bill.

More and more residential real estate professionals are hiring professional measurement companies to measure their listings, but it’s not a requirement. There is a requirement to measure residential properties before listing them, but real estate professionals are allowed to do the measuring themselves.

If, for whatever reason, your real estate professional doesn’t want to do the measurement themselves, that’s fine. There are services out there that will do property measuring according to the required standards, but those professional measurement services come with a cost. Some real estate professionals may pass the cost on to their seller clients and set that out in the listing agreement, while others will see it as a business expense, for which they will eventually be compensated through the commissions they earn on the sale.

If your agreement doesn’t specifically indicate you, as the seller, will have to pay for or otherwise reimburse your real estate professional for third-party services, your real estate professional cannot require you to pay for such a service.

If your real estate professional continues to request payment or otherwise attempt to force you to pay, please discuss it with their broker.

I’ve been working with an agent, but she’s going on holidays for 2 weeks. She’s going to arrange for someone else at her brokerage to take care of my listing while she’s gone. Do I have to sign a new contract with this person?

The short answer is no, but you may have to make changes to your existing contract depending on what type of brokerage you’re working with: common law or designated agency.

In a common law brokerage, your service agreement (contract) is with the brokerage, which means that essentially, you’re agreeing to work with any or all licensees at the brokerage. Because the agreement you signed is with the brokerage, any licensee from that brokerage can work with you under your existing agreement. The individual or individuals you have been working with are working with you on behalf of the brokerage.

In a designated agency brokerage, your service agreement is still with the brokerage, but only the individual (or individuals) named on the agreement are designated to work with you on behalf of the brokerage. If this is the case, and the individual your real estate agent wants you to work with for a couple of weeks isn’t specifically named on the agreement, the brokerage will have to designate, in writing, the other individual to work with you. You and the brokerage can amend your original agreement to include this new person as another designated agent for you.

Another option that is available when you’re working with a designated agency brokerage is that at the outset of your agreement, the brokerage designates more than one individual to work with you on behalf of the brokerage. This is completely acceptable, and will save you from having to amend the original agreement in the event the primary individual you’re working with becomes unavailable during the term of your agreement. When you’re signing your agreement, talk to your agent about their availability, vacation plans, and whether there are other agents within the brokerage that they sometimes partner with.

More than fifty percent of real estate professionals in Alberta are registered with a designated agency brokerage. Your agent should have explained whether their brokerage operates under common law or designated agency when you first started working together, and should have explained the differences.

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Can I work with different professionals from the same brokerage without signing a new contract?

There was a major hail storm after a seller accepted my offer to purchase their home, and the house needs a new roof. Who is responsible for it?

Until the deal closes and you take possession of the property, the seller is responsible for the property. Any damage to the property or to the items included in the sale, are the sole responsibility of the seller until your purchase funds are transferred and you take possession of the home.

When you take possession, the property – and its inclusions (appliances, etc.) – should be in the same condition as when you viewed it and submitted your offer to purchase.

Even if the property is vacant, and has been for weeks, it is still the seller’s responsibility to maintain home insurance on the property.

As the buyer, you should make sure you arrange for your home insurance to begin on your possession day, even if you aren’t moving in right away. As soon as you take possession, insuring the property is your responsibility.

If an environmental disaster, such as a hail storm or wild fire, damages the property in the time between the seller accepting your offer and possession day, have your agent talk to the seller’s agent to confirm the seller is handling the damage. If the seller confirms they’re handling the repairs, you may wish to add an addendum to your accepted offer to purchase that outlines the seller’s responsibility to replace the roof prior to possession day, or you may ask the seller to agree to you holding back a small portion of the purchase funds until the roof is repaired. Make sure any agreements between you and the seller are in writing.

If there is any resistance on the part of the seller, either to fixing the damage or to putting details and agreements in writing, you need to talk to a lawyer for legal advice.

Likewise, if either party wishes to end the transaction in light of the damage done to the property, or if the seller refuses to repair the roof prior to possession, contact a lawyer for legal advice.

I own an older home in a popular inner-city neighbourhood. A builder knocked on my front door and asked me if I’d be willing to sell—he said I’ll get more money for my home if we don’t get a real estate professional involved. What should I do?

What you’re describing is not an unusual situation, particularly in large cities where inner city property is attractive, particularly to builders who want to redevelop it.

The first step is to decide if you have any interest in selling. If you don’t want to sell, no matter the offer price, then your conversation with the builder is likely done.

On the other hand, if there is a price at which you would consider selling, you have some due diligence to do.

Even if the builder suggested you don’t involve a licensed real estate professional, our advice is always to have a real estate professional involved, who will work on your behalf.

There’s a good chance the builder doesn’t want you to get a real estate professional involved because they think they may have an easier time negotiating with you, assuming you do not have much experience in the real estate market. They’re trying to sweeten the deal by saying you’ll get more money for your property if you don’t hire a real estate professional; the thought being that if you don’t hire a real estate professional, you won’t have to pay commissions to the real estate professional, and you can keep more money in your pocket.

My caution for you on this is that they’re saying they’ll pay you more – but more than what? More than what they would pay you otherwise? More than your home is worth?

Everything is relative.

If you want to hire a real estate professional to represent you, you will have to sign a service agreement with them and it will indicate the details of the compensation you will owe to them, but that doesn’t automatically mean you’re going to end up with less money in your pocket from the builder.

With solid negotiating skills, your real estate professional may be able to negotiate a higher price from the builder, and still leave more money in your pocket after you pay your real estate professional’s commission.

There are always benefits to working with a licensed professional; they’re educated, regulated, they carry errors and omissions insurance, and the Real Estate Council of Alberta can investigate conduct if you believe they breach the rules in place.

I want to list my condominium for sale, and my real estate agent completed a Comparative Market Analysis (CMA) to help me set a price. I think the range in the CMA is too low. Can I override my real estate agent?

Of course. You are the client. When you hire a real estate agent, they work for you, and must obey your lawful instructions, including listing your property at the price you want.

That being said, if you have a particular listing price in mind, let potential real estate professionals know your thoughts before you enter into a listing agreement with them. It’s better to have this discussion before starting a client relationship. Some real estate professionals may not accept a listing if they believe the listing price is too high and that’s their choice.

In this situation, it’s important for you to know what a CMA is, what it means, and understand that it’s not an appraisal of your property and it alone doesn’t set the listing price. A CMA is a method of property valuation real estate professionals use to estimate the value of residential properties; a CMA provides a range of value.

Your real estate professional has the obligation to act in your best interest, and they didn’t pull your CMA out of thin air. Real estate professionals use actual sold properties in a given market area that are comparable in size, layout, features, and location. It helps sellers set a listing price for their property by examining the prices at which similar properties in the same area have recently sold.

Many home and condominium owners think there is a special factor that makes their property more desirable and worth more money. It could be having south exposure, the fact your unit faces a park instead of a busy street, or that your unit has more storage. Talk to your real estate professional about why you think your listing price should be higher and ask for their input.

Real estate professionals help buyers and sellers for a living, and based on their experience they can tell you why, or why not, your special factor may affect the value of your property.

If you want to try listing at a higher price, that’s up to you. Your real estate professional provides guidance and advice, but you’re the decision-maker. You also should recognize that there’s no guarantee either way—real estate professionals use data and statistics and their experience to guide you, but ultimately, it’s the buyers looking to buy property that will decide how much your property is worth to them.

I’m selling my home. I accepted a buyer’s conditional offer, they didn’t waive their conditions by the deadline – and now my real estate agent says I have to return their deposit. I thought, as the seller, I’d keep their deposit. Why do I have to refund it?

When a buyer writes a conditional offer, it generally means they’re serious about purchasing a property, but they want a bit of time to do some due diligence. Sometimes their purchase conditions will include the ability to get a mortgage (financing condition), satisfactory home inspection, or maybe a review of condominium documents. They provide a deposit to show some level of commitment to the purchase.

If a buyer waives their conditions and then doesn’t proceed with the purchase, the seller typically gets to keep the deposit (subject to the agreement with their listing real estate agent). In such a case, the buyer’s deposit will provide some financial compensation to a seller who may have already purchased a new property and now needs to find a new buyer for their home.

However, if a buyer doesn’t waive their conditions, their deposit will be returned to them. Remember that the conditional offer was just that, it was conditional on certain criteria. At that point in the process, the buyer has committed to buying your property only if other aspects of the transaction check out.

That being said, a buyer should not be walking away from their conditional purchase “for any reason.” It should be based on one of the conditions they included in their offer. Buyers are expected to use reasonable efforts to satisfy their conditions and not doing so could lead to legal issues.

For example, if a buyer included a home inspection condition, never scheduled a home inspection, and didn’t waive their home inspection condition, therefore not proceeding with the purchase – that could create a legal issue for them. If they didn’t even schedule a home inspection, a seller may be able to make a legal case that the buyer didn’t use reasonable efforts to satisfy their conditions, and therefore, the deposit shouldn’t be returned to them.

Your real estate agent may be able to give you some information on what “reasonable efforts” include, but otherwise, this is a legal issue and you should seek legal advice.

Conditional offers should be made in good faith; buyers should use reasonable efforts to satisfy their conditions. If you believe your potential buyer did not do so, and you have proof, you can talk to a lawyer. In the absence of that, though, the deposit is returned to the buyer.

I interviewed a real estate agent who said now is the time to sell because average sale prices in my city rose 15% last month—but the last newspaper article I saw said sales are way down. How is this possible?

It’s possible because your real estate agent was likely referring to something completely different than what the newspaper article is describing. While both were referring to conditions in your real estate market, they were looking at different measures of those conditions.

The average selling price is the total dollar volume of all property sales divided by the number of property sales. Average dollar values can be skewed if there is a particularly expensive or particularly cheap property that sells in the time period in question. Imagine in one month, there are four homes that sell for $200,000, but a fifth home sells for $1.5-million—the average sale price of the homes that month is $460,000, even though only one home sold for more than $400,000.

Now imagine that in the prior month the number of homes sold was the same but the fifth home sold for $200,000 not $1.5-million. That month’s average price would be $200,000.
A single expensive home sale can make the average sale price rise significantly.

When they refer to sales being “way down,” they’re likely referring to the number of sales. And yes, it’s possible to have a higher average price this month over last, but still have lower sales. Take the example above, but change it so that only two home sales occur—one at $200,000, and one at $1-million. The number of sales is much lower (2), but the average price is $600,000.

There are many things to consider when someone is talking about the state of the market, whether average prices or number of home sales. Remember, all real estate is local. The average price in Calgary doesn’t tell you anything about current values in a specific neighbourhood or on your street—and there are wide variations in prices across a city.

Just as the average temperature in Canada tells you nothing about how you should dress for the day, the average house price over a set period of time doesn’t tell you how much your home is going to sell for.

Any time you look at housing statistics, you can’t do so in isolation. Take in as much information as you can, and look to your real estate professional for market advice and information—but keep in mind that nobody has a crystal ball about what the market will do next.