Buying Property
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I found out after I bought my condominium that the parking stall wasn’t included on the title! What can I do?
Navigating a condominium purchase involves some different considerations compared to the purchase of a single-family home. Among other things, you need to consider your condominium fees and what’s included in that cost, details regarding who runs the condominium board, and any specific condominium by-laws that may not allow for certain activities, such as pets or a BBQ. There are many things you should review prior to signing a purchase agreement, and sometimes the property listing doesn’t contain all the details.
Unfortunately, if a deal has already closed and the property has changed hands, there is little recourse for these issues outside of the courts. Consumers and licensees should be aware of possible problems and do their due diligence before making an offer.
One of the most overlooked details in condominium purchases involves the verification and documentation of parking spaces.
The sellers are responsible for providing parking stall information to their licensee, and this should be detailed in the property listing. Yet it’s important to understand that listing details might not always be included or accurate. There is always the possibility that an error occurred when the seller’s licensee entered details on the listing database; a parking stall could be accidentally listed instead of a storage space, or the listing may indicate an assigned parking spot when what’s included is a first-come, first-served parking lot or garage. The seller may have also given incorrect information to their licensee, who took them at their word.
This is where communication and due diligence are crucial. Oversights in information can lead to buyers not receiving a titled parking spot or discovering that their parking space is not as conveniently located as they were led to believe.
It’s imperative for the buyer licensee to proactively verify and document any aspects of a property purchase, including parking stall information, with the seller or their licensee and through their own due diligence, prior to making an offer.
The buyer licensees should view the property and the parking stall in person, preferably with the client, to ensure that it meets the client’s needs (Is it large enough? Is it close enough? Is it handicap accessible?). The buyer’s licensee should also speak with the seller’s licensee to confirm any parking stall locations and any additional costs or fees that may be associated with them. These details should also be explicitly included in the condominium documents and/or title.
For seller licensees, they should also do their due diligence and verify the information given to them by their seller clients. It pays to catch misunderstandings early, before any money changes hands or contracts are signed.
When purchasing a condominium, you should always discuss your individual circumstances with your licensee so they may guide you as to what questions to ask, and any particulars that may need to be included in writing.
In the end, if something is missed through negligence or lack of due care on the part of a licensee, consumers can lodge a complaint with RECA. The licensee(s) involved in the transaction could face sanctions for failure to provide competent service.
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Is it risky to submit a purchase offer without conditions?
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.
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The home seller refuses to provide a Real Property Report (RPR). What should I do?
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:
- 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.
- 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.
- 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.
- 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.
- 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.
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Can a real estate professional represent both the sellers and the buyers?
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.
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Do I have to sign a contract with a real estate professional to view a house?
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.
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Should I be concerned about radon when buying a home in Alberta?
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.”
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Does the seller have to tell potential buyers that a house is conditionally sold?
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.
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Do I have to work with the builder's real estate professional when buying a new build?
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.
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How do I know what items come with the house I want to buy?
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.
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Who is responsible for property damage after the offer is accepted?
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.
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I'm the new owner. Can I make the listing agent remove the listing from their website?
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.
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What happens if I can't get financing approval until after the deadline?
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.
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Seller's agent won't bring my offer to the seller until a specific date. Is this allowed?
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.
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Seller's agent lied and I want to back out of the purchase. Can I file a complaint with RECA?
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.