#24 - Agent or Realtor?

Hosted by: Michael Dempsey & Tim Somerville 

Produced by: Hayden McNamee

Music by: Anthony Trim

Transcript

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I know it's uh it's a horrible word. No, but the biggest issue I have, and I think you do, is the fact that can be waived. And so if that form is yeah, if that form is filled out. Hi, I'm Tim Somerville. And I'm Michael Dempsey, and this is Off the Market with good old team Somerville. My goodness, now listen word, Jew. I know, happy June. There's so much going on in June. And I know we're gonna have some more podcasts before the end of Ju, but uh to all the we got graduates. We got like my my daughter's five uh grade in grade five, so she's gonna have the the moving up ceremony. And I mean back in our day they called it junior high. Now it's middle school, and I don't know. Did you do 13 grades? Uh yes, Ontario. Yeah, yeah. They they uh called it Ontario Academic Credits OAC. And yeah, so we were grade 13. Now, what was cool was when I came out here to New Brunswick, some of those OAC credits actually were university credits as well. So that was good too. That's a nice little leg. Uh and so yeah, June. Uh I mowed. Yeah. Now I change I I mowed the last week in May, but it had to be done. Oh, I agree. Listen, you know, no belly goats, so no can you don't highlight cows. Oh, y'all, not yet, not yet. Another story, folks. Yes, my goodness. So talk to me about the market. Yes, well, uh, we had some sit uh statistics coming from the New Brunswick Real Estate Board. I thought I'd just share a couple with you. Um, so we're looking at May. May's come and gone. So how was it compared to last May? Yes, and so as you know, the last couple of years have been pretty steady. It's been pretty uh, yeah, it's been in tough on inventory, but it's been steady. Good. So if we look at our sales activity, we're almost uh even. We're almost yes, so we're actually we're down 0.9%, but we will count that. So we're things are pretty good. As far as new listings go, up slightly, only up half a percent. So again, we're still keeping steady with the the listings that we are selling. But the active listings on market are up 3%, which is great. And uh one thing I wanted to point out was last May, our sale to list price ratio, what that is, is here's the asking price. What did it sell for? It was what 107? 106, yeah. So this year is 104. Okay, so down a little bit, but still very, very good for our sellers, our buyers. Like I said, we've had a lot of steady statistics, so it's making buyers more confident in placing that offer. Good. So I thought I'd just share that little tidbit with you. Okay, well, here, listen. So, what I wanted to do, and I think it was unique that we already met prior to this, I wanted to talk about some of the forms we use. Paperwork. I know it's uh that's a horrible word, but many people think that a realtor just comes in, they meet them, they sign one document, a purchase and sale agreement, and hey, guess what? We're good to go. I wish. Oh, so do we. Yeah. Compliance and of course, liability and protecting our clients. And so, again, so what was unique was I know you wanted to talk about some of the forms a little bit more in depth. I wanted to talk about many of the forms that you may or may not see, but are utilized and used, of course, as a buyer, as a seller, or even Bo. So uh let's get right into it. Yeah, let's take the lead. I'll just kind of chime in. Yeah, that's the material that I'm sounds good. So, when we meet a client, one of the items that we need, just for, of course, uh to meet compliance, and of course, uh today's uh uh forms are one thing, but we need identification. Yes. So to do that, we always start by asking for uh some personal information. And and what's unique is that the lawyer's going to ask for this, and your banker probably is going to ask for this, and everybody and wouldn't it be great if there was just one system that's like, okay, we have that and and we're good. No, everybody has to get their own personal information uh per client. So even though you may be asked the same thing seven times, you'll have to provide it seven times. Yeah. So the ID. The one thing about the ID is we have to ask about occupation and employer. We also have to ask, of course, for a copy of your driver's license. Now, it used to be that we had to physically see it. Um, you know, now um what can happen is we can fill one out. Of course, you can text it to us or whatever, but you physically do not have to be with us. So for those people that are buying in Ontario or outside of, you know, outside of St. John, maybe we're just not with you, we can still obtain that information even though we're not physically together. So saying that, there is uh buyer's consent. Now, many times uh a lot of that has to deal with whether or not you're a Canadian citizen. Yes, right? And we've run into that beforehand. Absolutely. So if you're not aware, a couple of years ago the government put in a foreign buyer ban, and there are still a lot of exclusions, but basically the form is saying that I'm either a Canadian citizen or I fall within those exclusions that allows me to buy. Correct. Yeah, correct. So we usually say that one of the first items that we'll want you to sign is any form of acknowledgement that we are representing you. So we have one that's called a war, working with a realtor. This is actually pretty important. The acknowledgement that we are representing you as a buyer or as a seller on this transaction is very important. Now, in no way, shape, or form is this a signed contract, it's an acknowledgement. We would love to have what's called a buyer's agency contract signed with buyers, and all that states is that you, the buyer, have decided that the representation that you want is through us. And by having that representation, it guarantees us that there will be some form of remuneration. And that means that if a private sale was available and you wanted to see that, that you, the buyer, may understand that there may be a fee at some point to us because we do work hard, we just don't want to work hard for free. And so at the end of the day, a buyer's agency contract allows us to know that we can work hard for you in hopes of, of course, not only building the relationship, but seeing it through to the end. And at the end, of course, there would be some form of remuneration to us. So the buyer's agency contract is not signed very often, but if you sign one, then understand that you're more or less tied to that realtor unless that contract is either canceled, which is difficult, or of course it has lapsed because even a buyer's agency contract needs to have an expiration date. So if we ask if you're working with a realtor, one of the reasons is because if you say yes, we may say we wish you the very best with that, that realtor. You may say, Hey, guess what? We're not very happy with that realtor. We'd really like to use your services. We then may say, have you signed any buyer's agency contract? Because just because you're not happy doesn't mean that that realtor is still not provided some type of remuneration. So you have to watch that. Yeah. Um, go on. I was gonna say, you probably, you know, your best bet is that both parties could mutually agree on a release. I agree. You know, to release you, and of course, again, that's another, you know, that could be tough. Because if not, now Michael and I or our team has gone out, we've found you a home, we've written an offer, we've gone through the conditions, and out of the blue, some realtor comes out and says, Oh, I have a signed buyer's agency contract. Guess who gets that commission? Yeah, not us. So I understand it's just certain questions we may ask for security reasons, for privacy reasons, but also for us. We we need to make sure that again, the relationship that we're going towards is of course uniform with not only you, but with us as well. So um there are some common uh common ones. Yes. So um we can get into, of course, everybody knows that there will be a purchase and sale agreement, which is great. If your agent, not salesperson, but agent, which is the company involved on both sides, are the same, then a dual agency has to be signed. Very important as well. It just states that it's not a breach of duty to both parties to be represented by the same company on the same transaction. So I'll pause you there for a second. If you didn't catch what Tim said, agent is a term that gets thrown around a lot. Yes, and it's very common in you know, to our neighbors down the south. But agent, like you said, is the company, Royal LaPage Atlantic. The realtor, that's us. That's right. So it gets thrown around a lot. Even in our day-to-day, we say, Oh, I'll contact the other agent. Well, we're actually calling the other realtor, so you know, sometimes we interchange the words, but it's very important. So 100%. 100%. Now, with some transactions, you could have a condo, you could have a mini home, you could have different schedules. So there is a mini home schedule, there is a condo schedule, and these are pretty important because especially a condo schedule will show about the strata unit, will show that it's in good standing, they're their reserve fund. Uh, but also you need what's called an estoppel certificate. So understand that when writing on a specific property, such as a condo, there can be extra forms that need to be filled out and again sign and acknowledged. And stating that we at Team Somerville, we don't use all forms, but we could. Um, the the issue we have, of course, is that some forms are not uh, you know, used for specific properties. So, you know, filling out a condo schedule to buy a residential home. So filling out a mini home disclosure with a condo. Correct, you know, but there is actually another document that we see from time to time, and that's a well and septic uh document. It will talk about, you know, if they know the depth, it will talk about, you know, the recovery, it will talk about whether or not it's a drilled or a dug well, location, septic type, and everything else like that. So so there are a lot of forms out there that you may or may not see on every transaction. A well and septic, of course, is not on every property. So you may or may not see that. Now, mostly a buyer and a seller, a seller is going to fill out more documents. So let's focus on the seller because I know you have a couple there. Well, here's a document that we insist on it to the best of their knowledge that the seller can fill out, and it's called just a simple residential property disclosure. Yes, right. And it is a generic checklist, but it helps us to give information to the potential buyers. I agree. And so some of the things that they cover is of course as you you mentioned, you know, water and well and things like that. So what is the water supply? Is it municipal? Is it well? Like you said, drill, dug, all that good stuff. Um, sewage, you know, municipal in the cities, in some of the outskirts of the cities, there's still connections to the municipal uh sewage, but is it a septic system? Do we know the age of it? Do we know how big it is? When was the last time somebody, you know, you know, clean her out? You know, so these are all very important things. Yeah, and of course, it's also a great checklist for when the insurance company uh asks Mr. and Mrs. Buyer, hey, you need information on this property, it's a great checklist talking about the electrical system. Is it breakers? Is it fuses? I hope it's not fuses, but still very good, easy to convert over. I agree. The heating system. One thing that gets left out a lot, and I don't know why, but it's like an itch in the back of my brain is they always forget to cover the roof covering. What is the age? Yes, like like when we talk about bare bones, Tim, what are the bare bones to us? Right foundation, windows, electrical, roof, and I always say the integrity of the property. Absolutely. And people want to know what they are. Too many times I've stared at a window looking for a date on it like a silly goose. I know, but I'm finding the date to tell my credential boxer, you know, this is when the window was manufactured. So I'm thinking maybe it was put in the you know the same year. At least it got older. That's right. Um, what else was gonna say? Mechanical, you know, make sure your heat recovery, your um, your Venmar units are working. You know, have you done any updates? When did you update the electrical, the plumbing? Yes, so please jump in. No, but yeah, but the biggest issue I have, and I think you do, is the fact that many of these disclosures are not filled out properly. And I mean many. Yeah. And so what we do with Team Somerville many times is we try to make sure that we are close to the vendor when they're filling that out, because we're not coaching you on what to put, we are trying to guide you on certain questions that you may have that we would know the answers for. So when we go through again, and again, you mentioned about the roof, what we will tell people is if you've bought the home five years or had the home for five years, and you were told that the roof was done three years prior, which theoretically would mean that it's eight years, we would tell you not to put that in unless you have an actual receipt showing that the roof shingles were done. Because many times you're going on information that again, it's passed information from somebody else, it's been passed on to you. But are you certain that that is an eight-year-old roof or is it a 12 or 15-year-old roof? Because don't take the wrong way, but many times when information is given, it's not right. So, unless you are certain, then please make sure that's what you put. And it's okay to put you do not know, right? This disclosure gives you the ability to put I do not know, right? And so again, we would much prefer to fill it out so that that way the buyers are aware of the information that you know, because anybody will tell you the three words that you have to worry about as a seller when you're selling is disclose, disclose, disclose. And so when we look at disclosing items, there are many realtors that will say, Well, we don't want to fill one out. Well, the vendor has the right not to, but then it just puts up such a flag because what ends up happening is a buyer, they're like, Well, why wouldn't they fill out a disclosure? What's the issue? What are the concerns? So just understand that again, filling out a disclosure is not a bad thing. It actually can protect you as long as you put the information that you're aware of on the whole. Absolutely. I'll bring you back, Tim Dimension. Yeah, go ahead. We we don't coerce you or coach you to fill it out a certain way, but there are certain questions that will help that will ask you to help you fill it out. And one of the biggest ones is you know, is anything rented or leased nine times out of nine times out of ten, they say no. And then we say, What about the water heater? That's okay, yeah. Oh, and the dusted online. Oh, wait, and that heat pump. Yeah, and the heat pump, it's one thing about a water heater, everybody will tape over the assumption of a water heater or propane tanks, propane tanks, right? But propane tanks are a hundred and something dollars a year. Water heaters are fifteen, you know, fifteen dollars a month, not much at all. But if you forget about a heat pump, well, a heat pump could be a few hundred dollars a month, and that can definitely change the ability of your buyer to purchase your home. Absolutely. So I guess it's gonna change their their expense ratio. Correct, correct. So, just very important that uh when we look at the disclosure in particular, it's very important to understand the the fact that by filling one out, yes, it's going to provide information to other people. So why not make sure that the information in there is as correct as it can be? Absolutely. And I'll challenge Tim now. At the top of this disclosure, we have the property address, which Tim will fill in, and the seller's name will Tim will fill in. Tim, do you ever touch this again? Pen to paper? I do my best not to. Absolutely. Doing my best not to. Liability. Liability states that if we went to court theoretically, if I had been filling out the full document, it could be stated to the judge, hey, guess what? I didn't fill that out. I gave the information, but how do I know that Tim filled that out in the way that I gave it? So we do our best, and there have been some times where yes, um, based on age or you know, uh certain specific situations where we've had to correct specific things, but that's because the information on there was incorrect. And we at Team Somerville, we want you to understand that this form in particular, we need to make sure that it's as correct as possible. Absolutely. Right. And don't be afraid if if you've had roof shingles blown off in a windstorm and you immediately had them replaced. That shows the buyer that you're on top things. Correct. So don't be afraid if you've had an insurance claim and then it says, well, we had the insurance company in, yeah, it was fixed. Yeah, they know it's fixed, correct? So it just shows that you're, like I said, you're on top of things, you care about your home, yeah, and that goes a long way. Well, three shingles come off in a windstorm. You go up and you have them tapped properly, yeah, or even you do it yourself. I don't care. But at the end of the day, the new buyer comes in, buys the house, and the first thing the neighbor says, Oh, did they tell you about the time that all the shingles came flying off the house? Yeah, all there were three. Right, three, right? So, so just understand that a lot of times it's after the fact where this disclosure, of course, could come back and bite you if it's now filled out properly. Absolutely. We actually uh real quick had a neighbor drive up to a property, one of one of uh Tim and I's listings and said, Oh, the water's no good there, the water's no good there. While the house was being uh inspected, yes, the water chest came back fine. Yeah. So, you know, don't believe everything you hear. Well, and and again, we know that you know, many times this the sellers are going to do what they have to do to get their home sold. And so, yes, sometimes it is important to know what the neighbor has to say. Other times I would say it's best to build a bigger fence. So, anyway, but that's another story. Some good advice. Yeah, that's another story. So let's move on to a couple of the other uh items documents that we would sign. So the one thing you have to understand is if there is a purchase and sale agreement, there is what's known as a waiver of conditions or a fulfillment of conditions. Now, this has become much more prevalent uh on the transactions that we've seen. Uh banking institutions are asking for it, other people are asking for it. Now, it's very important for this document to be filled out properly as well, because certain items can be fulfilled and certain items can be waived, but not all items can be waived. And so if that form is if that form is filled out improperly, it may be worth the paper. Sorry, the paper it's written on, which again, so you just want to make sure that certain documents are extremely cautious when filling them out, but filled out correctly. Um sellers fill out more documents than buyers, though. So when we meet with the seller, there are many documents that we have to. One of them is the seller's direction, which we were talking about this morning. So not all realtors are using this form. And I just I don't get it. The circumstances is that we are still in a strong market, it allows buyers and sellers uh an equal opportunity to be able to see the home within a period of time before any offers are presented. What's wrong with having five days of showing? I don't care if it's three, as long as there is a date so that you know that if you see it 24 hours or 12 hours or even two hours after it's listed, you're not going to reach out to that realtor and find out, sorry, it's gone. How is it gone four hours into a listing? How are you doing your seller any job? They offered us asking price, so we took it. Yeah. Well, guess what? Chances are you would have got more. Yes, but you know what? Based on their family situation, they really wanted to close it as quick as possible. And I hate this line because just because they accepted an offer doesn't mean that that is the best offer with price, conditions, and closing date. Because on a multiple offer situation, all of a sudden, guess what you're getting? You're getting now people that are coming in and are saying, hey, guess what? The closing date is flexible. I'll close whenever. Here's no conditions, here's this, here's this. So I just do not understand why sellers are not you know, filling out a seller's direction on almost all the uh all the listings. It's potentially more money in your pocket. So right. And us as real. Actually, you know what? I guarantee you it's it's good, it it will be more money in your pocket. Yeah, right. But but the other thing is to me, there's the liability of the realtor. If I'm not providing my seller with the opportunity here, and somebody knocks on that seller's door and says, Listen, I know you weren't holding offers, but I just want you to know I would have paid that price plus 50 grand and it would have been a cash offer. I have nothing to sell, and guess what? You didn't even give me an opportunity. Try cleaning your suit, Timmy, because we go at court. Yes. No, but you know, but we won't because at the end of the day, we make sure that we explain this to the sellers and to the buyers because people always think, oh, the seller's direction is there so that the seller can get more money. It's also there so that the buyers have an opportunity to even have a chance. Absolutely. Well, your buyer may not live down the street. No, I don't. How many times have we had people that say, Okay, I'm gonna drop $1,000 on a plane ticket? I'm coming to see. I get it. I get it. Now, we do have other um uh forms. Of course, there's what's known as the input data sheet. That is the information pertaining to your home or property, and we do our best to make sure. Sure, the information is correct. But please, as a seller, make sure you're also reviewing the listing when it comes up. Because again, it goes through many different hands before you'll actually see it on the sites realtor.ca, Khajiji, everywhere else. And if there is a mistake, then talk to your realtor and say, Hey, guess what? Can you please make the following changes? We at Team Somerville, we try to do that ASAP. The biggest thing is though that some of the items, uh, and I'll give you one that isn't checked very often, is the mapping of the property. Yeah. I've seen ones that are here that they're mapped in Nova Scotia, right? It's done based on the postal code, but it does not always mean that the latitude and longitude that goes through the system is still the right spot. So again, for you as a seller, if you're looking at your listing online, check on the map and just make sure that you're comfortable with where that is. You'd be surprised that many people are going to be calling their realtor and say, hey, guess what? This is all it shows my house in the middle of the bay of funded. Yeah, that's right. We said, Well, we're selling it as a hemspoke. Yes, yeah. This isn't just waterfront, it's water. It's water. Yeah. Um, so anyway, the listing agreement is extremely important. Now, the most important part about the listing agreement is to make sure that it is completely filled out before you sign it. So, what I mean by that is this is where it shows the expiration date, your commission fee. And again, those are two items that you want to make sure are there. Now, I'm not saying that there are sometimes items that still need to be filled out when the realtor gets back to the office, but make sure the important parts are because the expiration date, if it's not there and you call up seven months later and saying, How come my listing is still live, it's still active? I didn't think that it was anything more than three months. No, no, I put it on for a year. We had one couple years ago that actually had a two-year listing. A two-year listing. I remember that one. Yeah. And at the end of the day, it's just listen, we at Team Somerville will usually ask for about 120-day listing based on when it is. Um, so right now, coming into June, we're asking for the end of October for most exp expiration dates. We get challenged a lot too. And Tim, how many times has someone said, Well, you got one month to sell my house? Oh, yeah. And what are we saying to them? We'll say we we say we can't. And what I mean by that is yes, we can sell it, but we cannot promote it properly because MLS rules state that a listing has to be minimum 60 days to be on MLS. So, again, there are some rules and regulations that we have to abide by just to make sure that we're promoting and marketing your home, your property, this in the right way. And please keep in mind your home needs to be on the market from the time we uh get the offer and close. But that still has to be active. Oh, I agree. So I agree. And it may not, you know, if the average days from sign up to sign down is like 29 days, which is great. It is. Um, but yeah, sometimes it takes a couple extra days. I agree. I agree. A couple other documents for the seller. We do have the sold pending close that we fill out. It just gives you the opportunity that after an accepted offer is in play, you, the seller, have the right to put through that the listing is pending, conditions, but that will prevent having to show your property. Um, if the deal falls apart, of course, we can go back to anybody on our list, but that's another one. The um the uh I think we have one more there that we have to fill out. We have all that the input data sheet, the listing agreement. So I noticed that we tend to fill out a couple extra folds on our end. Yes. Uh oh, yes, that's right. Disclosure of sale price. Yeah. Thank you. Last one. Boom. Yes. So thank you very much. So when you talk a little bit about that. Well, when it comes to the disclosure of sale price, so we did have some changes in our board regulations that states um in order to get faster access to information for appraisals, uh, in order to do our market analysis and things like that, it was voted that once your house is firmed up, and what that means is everyone's paid the deposit, they met all their conditions, that sold pending price now shows up in our system. Now that's not public knowledge, but I would argue that it could accidentally become public. Of course it does. Of course it does. And so again, the idea behind it was we can do our market analysis faster. We know what it's sold for. I get you. Appraisals, I get you. But I was just afraid that that information is going to get out there. Right. So if you know John Smith took, you know, below asking price because at that time the buyer pool was a little smaller, right? Whatever the reason is, may have known the person. Could have been a cleaner offer. There's so many reasons why you accept an offer. But once that number is out there and something was to happen, we've literally seen people show up on you know the day of closing and say, we were wrong, we don't want this. Right. That's a whole other story. But now we that that seller's price is out there, right? And so anyone else can come along and say, Well, he did take 10,000 below. Let's offer 10,000 below that. That's right. You know, I mean, this guy's desperate. You know, it so we have a form that uh we fill out where we ask the sellers if they're comfortable, you know, would you like it show? Would you like that soul pending price show them? Or would you like it uh redacted until the day of closing? Right, you know, and we don't push either way, we just say here are the pros and cons to both. Right. And you know, and it's a good way of putting it, but when we are sitting down with the client, we actually say that please understand that this is your choice, but for privacy reasons, if you would like your sale price not to be shown to anyone until it officially closes, you have the right to do that. Currently, the sale price, if this is not signed, will go out once it is firm. Not when it's closed, but once it is firm. So on our form, we give you the option of both right on the form. So it's not like if we don't sign this document, it's going to be there. Yes, that's true. But we like to make sure that that one form isn't biased one way or the other. No, if it was my home, guess what? I don't want my sale price out there until it closes. Now, why? Just because, like what Michael said, it's small, rare occasions that this may happen, but just because it's not a major item that happens all the time still doesn't mean that it can't happen. And we're there to represent you, and we want to make sure that that's what we've done. At the end of the day, we just want to keep you educated every step of the process. We want uh you to be protected, correct, and uh like I said, informed. Correct. You know, so I know most of you know this podcast has been on forms, uh, a lot of information to take in. We at Team Somerville, the biggest thing that we want you to realize is the fact that again, knowledge and experience and professionalism is all important, but that knowledge and experience will get you so much farther down the path. And some of these forms, if your realtor is not explaining or filling them out to the best that they have to fill these out, you could be either leaving money on the table or like you said, you may be finding yourself in court because all of a sudden somebody feels that you left some information out that again may have changed the way that they would have either acted on your home, may not have written on your home, or may have negotiated differently. And again, at the end of the day, we at Team Summer Boot, we want you to know we're here for you. So, again, we'd love to say, call us. We'd love to help you with the buying and selling and bold. Well, I hope you love the uh the form content that we had today. And for this and many more, make sure you're uh you're clicking on a good old subscribe button. Yes. Um, we love to share this information, get everybody on the same page, know what uh the services that we provide, and uh just make sure that you're taken care of at the end of the day. Okay so again, from all of us, I'm Michael. And I'm Tim, and this is Off the Market with Team Summerball.