Buying or selling property seems complicated, but knowing what to expect and using a licensed professional to help you can make the situation go more smoothly. Start by reviewing the consumer tips below.
Did you know curtains typically don’t come with a house for sale, but the curtain rod and brackets may? Or that the garage door opener stays put, but the remotes for it aren’t part of the deal?
It’s facts like these that make it important to understand the difference between attached and unattached goods before listing your home for sale, or writing an offer to purchase a property.
So what are attached or unattached goods?
Attached goods are items you cannot remove from the property without causing damage. These include:
Attached goods stay with the property, unless there is a specific exclusion in the listing agreement or in the buyer’s offer to purchase.
If a seller wants to take an attached good with them or a buyer wants an attached good to not be there when they take possession, they should specifically exclude it in writing in the listing or in the offer.
Unattached goods are movable items. These include:
Sellers usually take unattached goods from the property before the buyer takes possession. If a buyer wants an unattached good included in the purchase of the property, he or she needs to list it as an inclusion in their offer to purchase. The seller would have to agree to such an inclusion as part of their offer acceptance. If the seller plans to take the unattached good, they need to put that in a counter offer to the buyer.
NOTE: In commercial transactions, everything other than the four walls is typically “unattached” (i.e. equipment, hoists) and should be specified in a Purchase Contract.
If a buyer is worried about inclusions and exclusions as the possession date nears, they can ask their real estate professional to include a term in the offer to purchase where the seller agrees to let them do a walk-through of the property before possession. This would give the buyer an opportunity see the condition of the property and ensure inclusions or exclusions meet the terms of the agreed-upon contract. If they see a problem, they can negotiate a mutually satisfactory resolution before possession.
When there is a problem with attached or unattached goods after possession, and the seller does not cooperate, the buyer’s only remedy is legal action. You need to think about the value of the missing goods in relation to the costs of legal action to decide if it’s worth pursuing.
Your real estate professional will help you consider and write exclusions and inclusions when drafting agreements and offers to purchase. If you’re ever in doubt about whether something is attached or unattached, include it in the agreement or contract anyways. When in doubt, write it out.
Real estate professionals work to separate themselves from the crowd and attract new clients. Sometimes this means offering incentives to attract new clients or inducements to complete a sale.
Consumers should know what types of incentives or inducements are allowed, and what they can expect.
An “incentive” is anything a brokerage advertises, communicates or offers to the public to attract business. This includes travel miles, gifts, contests, gift certificates, games of chance or anything else of value.
An “inducement” is anything a brokerage offers or gives to a person who is, or could be, a party to a real estate or mortgage transaction, meant to assist, persuade or cause that person to enter into a particular real estate or mortgage transaction. Inducement examples include when a real estate brokerage offers to pay a buyer’s legal fees to induce them to proceed with the purchase of a particular property or when a mortgage brokerage offers to pay for an appraisal to induce a borrower to enter into a mortgage deal.
In other words, a brokerage uses incentives to attract consumers to the brokerage, and they use inducements to get a specific consumer to enter into a specific transaction or deal.
Any incentive must be offered by the brokerage, not the individual person. Brokerage incentives must be available to all clients or potential clients of the brokerage, regardless of which professional from the brokerage that they’re working with
That means if you see one real estate professional offering an incentive – and you want to work with a different professional from the same brokerage – it should be available to you. If it isn’t, talk to the broker.
To offer an inducement, a real estate professional must:
Commission rates are subject to negotiation, and subject to the terms of a written agreement between brokerage and a client. A commission rate is a contractual matter and can be renegotiated at any time between the parties. An inducement is something a real estate professional offers or gives that is outside the bounds of a written service agreement. A commission reduction or a renegotiated commission is not an inducement.
While these incentives may be allowed if they are actually offered by the brokerage to all clients or potential clients, the advertisements themselves could be a problem because they make it sound as if the individual real estate professional is offering them.
Real estate professionals are consumers too, and they buy and sell property on their own behalf. But when they’re doing so, it can create a conflict of interest and they need to disclose their direct or indirect interest in any purchase or sale as soon as possible and definitely before any offer is made.
Direct interest: when a real estate professional owns or partly owns a property that is being sold or they are the party interested in buying a property.
Indirect interest: when a real estate professional is related to, or has a personal relationship with the person selling or buying a property. An indirect interest in a property has the same disclosure requirement as a direct interest.
When real estate professionals have a direct or indirect interest in a transaction, they must make written disclosures to you or your real estate representative at the earliest practical opportunity and before any offers are presented or considered.
When you are not represented by a real estate professional, and a licensed real estate professional wishes to buy your property or sell theirs to you, they must disclose in writing:
When you are represented by a real estate professional and another licensed real estate professional wants to buy your property, or sell you theirs, they must disclose in writing that:
Some brokerages have hundreds of associates, so it’s not unusual to sell to a person affiliated with the same brokerage as your representative. If this is the case, the brokerage must immediately disclose to you:
They must also provide you with an opportunity to seek legal and independent advice.
Remember, when a licensed real estate professional has a direct or indirect interest in a real estate transaction, they cannot represent the other party to the transaction. If you want to continue with the transaction, you won’t have representation unless you hire another brokerage.
The seller should have an opportunity to seek legal and independent advice.
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.
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.
The Alberta Building Code 2014 included new requirements to protect homes from radon. The requirements came into effect in late 2015, and include, among other things, that new homes require a properly located radon rough-in or passive pipe in the basement, which can make it easier (and cheaper) to install a radon mitigation device in the future if it’s needed.
Your licensed real estate or mortgage professional is your go-to resource during a real estate or mortgage transaction. They have the education, training and knowledge to make your experience as stress free as possible.
However, there are some things you may encounter in a transaction that could be out of your industry professional’s area of expertise, and you may want to consider seeking legal or other expert advice.
You may want advice from a/an:
Licensed real estate and mortgage professionals can’t provide advice on areas or topics with which they are not familiar or competent. For example, if a real estate professional isn’t a tax specialist, their ability to competently advise on the capital gains implications of selling a property may be limited.
Not only is it perfectly acceptable for you to seek advice from legal or other experts, your licensed real estate or mortgage professional can’t discourage you from doing so.
Your real estate or mortgage professional may provide you with a list of experts who can answer your questions or address your concerns; however, they are not obligated to do so. If they do provide you with a list of names, they can’t steer you toward a specific expert.
If you’re a buyer, ask your real estate professional about the RECA’s Property Inspection Request Form. The form lists the services that a buyer may want to consider. The form does not cover everything, but includes the most common reports or inspections that buyer’s request.
In Alberta, real estate professionals can have a licence that allows them to work in a type – or multiple types – of real estate practice.
The four practice areas are:
A real estate professional’s area(s) of practice depends on their pre-licensing education. Industry professionals can be licensed to practice in one of these areas, or in any combination of these areas, depending on the education they completed and the licence they hold. If RECA receives a complaint about a real estate professional acting outside of the scope of their licence, RECA will review their conduct. You can check your real estate professional’s licence by Searching for an Industry Professional on the RECA website. The areas of practice attached to the industry professional’s licence will display when you click on their name after finding them in a search. Their areas of practice are listed beside the word “Sector.”
It may seem obvious what type of real estate professional you need (for example, if you’re selling a single detached house you need a residential real estate professional), but sometimes the line is blurry. For example, if you have an acreage property located outside of a city, is it residential or rural? Here is detailed information to help you figure out what type of real estate professional you need.
Real estate is residential, when:
What can residential real estate professionals do?
They can represent buyers and sellers of residential real estate, including:
Rural real estate refers to:
What can rural real estate professionals do?
They can represent buyers and sellers of rural real estate. Typically, rural properties that are intended for farming have a designated land use that reflects that. The rural definition does not include “rural residential” properties. Residential real estate includes rural residential properties, which are also known as country residential properties, such as acreages. These properties have a residential dwelling or are intended for a residential dwelling, and their primary purpose is not farming. Individuals whose licence only includes rural real estate cannot represent the buyers and sellers of rural residential or country residential.
Property management is:
What can property managers do?
Property management professionals can work with landlords (property owners) and/or tenants (potential tenants) in the leasing of real estate. A licence to provide property management services allows an individual to do so for all types of properties: commercial, residential and rural real estate.
Commercial real estate means property intended to generate income. It includes property used for:
What can commercial real estate professionals do?
They can assist in the purchase, sale, or lease of office buildings or space, industrial sites and retail.
These examples do not cover every possible situation or scenario.
Are you selling your home, but you aren’t being represented by a licensed real estate professional? You may be a “mere posting” seller. A mere posting is when a real estate professional puts a seller’s listing on a Real Estate Board’s listing database, but the real estate professional has chosen or agreed not to provide services to the seller other than to submit the listing for posting on a listing database.
If you are a mere posting seller, you need to make sure you understand the role of the buyer’s representative. You need to know the services you will receive from the buyer’s brokerage (real estate professonal) and just as importantly, what services you won’t receive from the buyer’s brokerage.
You may wish to work with a real estate professional for a particular real estate transaction and not want a real estate professional to represent you. Examples of this include:
A client is a person that enters into a service agreement with a real estate professional. A customer is a person who has made contact with a real estate professional but does not engage them to provide services.
In the situation where the real estate professional represents the buyer and the seller is selling their home through a mere posting listing, the buyer’s real estate professional will treat the seller as a customer and provide sole agency representation to the buyer. This means they will give administrative services to the seller and full representation services to the buyer.
It is important for a buyer’s real estate professional to disclose to you that the buyer’s brokerage:
The buyer brokerage’s responsibilities to you, the seller, are:
When it is in the best interest of their buyer client, the real estate professional may give administrative services to you, as a customer. Real estate professionals will give these services to a customer because doing so would be for the benefit of their client and the transaction. Administrative services are at the option of the real estate professional, without creating a client relationship. The brokerage, at its sole discretion, may give you, the unrepresented seller, the following information or services:
Click here for more information on having a “customer” relationship with a real estate professional.
Real estate industry assistants often handle daily administration details, leaving industry members free to engage in activities requiring a licence.
Assistants aren’t licensed by RECA and are not part of our jurisdiction. However, RECA holds an associate, associate broker and/or the broker responsible for an assistant’s activities. For example, Real Estate Act Rule requirements state an industry member must provide supervision and ensure the public has full knowledge the assistant is unlicensed.
Industry members can’t assign duties to the assistant that require a licensed professional. While an assistant can organize an industry member’s appointments to show properties, they can’t:
It’s important to note that consumers dealing with unlicensed assistants conducting these types of activities aren’t protected by the Real Estate Act.
Transaction brokerage is when the buyer and the seller are represented by the same real estate brokerage (in common law agency) or the same real estate professional (in designated agency). If a real estate professional represents both parties in the same transaction, there is a conflict of interest. Transaction brokerage is a way to deal with this conflict. It allows the same real estate professional to work with the buyer and the seller in the same transaction.
Transaction brokerage happens when a buyer is interested in a property listed by their representative’s brokerage (in common law) or by their representative (in designated agency).
A buyer simply viewing a property listed with the same brokerage or with the same real estate professional does not create transaction brokerage. However, if the buyer expresses an interest in the property after the showing, this triggers the need to discuss the client’s options, one of which is transaction brokerage.
Typically, when you’re the client of and represented by a real estate professional in sole agency, your professional owes you:
In transaction brokerage, your representative becomes a transaction facilitator and treats you and the other party (the buyer and seller) in an even handed, objective and impartial manner. The real estate professional no longer owes you undivided loyalty.
If the buyer and seller agree to proceed in transaction brokerage, both will have to sign an Agreement to Represent Both Buyer and Seller form, which will effectively end the sole agency representation for both and set out the terms of the new relationship between the brokerage and the buyer and seller.
Your real estate professional must:
They must not tell either of you without the informed written consent of the other:
Pros and cons of working in transaction brokerage
When you or the other party do not agree to transaction brokerage, you still need to resolve the conflict.
If one or both parties want the benefit of sole agency representation, the brokerage needs to determine which party became its client first. The party who became a client first will remain the brokerage’s client; the date on the written service agreement for each party is the determining factor. The other party then needs to decide what to do.
Option 1: Customer status (self-representation)
The party that becomes a customer, and represents themselves in the transaction, will need to sign a Customer Acknowledgement form to confirm the change in representation with the brokerage. Although the brokerage or designated agent will not represent that party or advocate on that party’s behalf, they may provide certain services to the customer. For more information on customer status, review Customer – Real Estate.
Option 2: Representation by another brokerage or by another designated agent within the same brokerage
The party who is not remaining a client of the original brokerage/designated agent may want to have another brokerage or a different designated agent represent them. If you go this route, it is up to you to find a new brokerage or request a different designated agent from within the same brokerage.
Choosing a new brokerage or a different designated agent within the same brokerage will provide you with sole agency representation as a client.
There are some situations where sole agency representation would be in the client’s best interests; in those cases, transaction brokerage isn’t appropriate.
A buyer or seller may need sole agency representation if:
Transaction brokerage is also inappropriate if the real estate professional is a party to the transaction (as the buyer or seller) or is a family member or business associate of one of the parties in the transaction. It would make it very difficult and unrealistic to expect the industry professional to treat both parties in an even handed, objective and impartial manner.
When you’re the client of a real estate or mortgage professional, they have an obligation to maintain the confidentiality of your personal information (including finances), as well as information about the property or transaction.
Your industry professional can only disclose your personal information to others if you give them permission or it is required by law.
Personal information is any information about an identifiable person. This could include:
Property information includes:
Transaction information includes any information you give to your real estate or mortgage professional through the course of your client relationship. It includes service agreements and communications, such as text messages, email, verbal conversations, etc.
If your property has a material latent defect, you must disclose that to your real estate professional, and your real estate professional must disclose this information to a potential buyer or the buyer’s representative. This disclosure does not require your consent.
If you are not sure if the defect is material or latent, you should discuss this with your real estate representative. For more information on material latent defects, click here.
If you’re in a transaction brokerage agreement, the brokerage must disclose any known material facts relevant to your ability to buy (if you’re a buyer) or lease (if you’re a tenant) to the seller or lessor, as the case may be. For more information on transaction brokerage, click here.
Even after your transaction is done, your industry professional is still required to keep your information confidential. The requirement to keep your information confidential does not have an expiry date.