By REALTOR® Steve Andersen
On June 15, 2018 dual agency for REALTORS® in British Columbia came to an end. Dual agency was a tool used by REALTORS® to allow them, with the consent of their clients, to represent two parties in one real estate transaction. It allowed REALTORS® to change their agency relationship so they could deal with the two parties impartially. In the commercial world this also applied to leasing and business sales.
As a consumer, the new legislation has significantly reduced your freedom of choice.
A REALTOR® can now only represent one party in a transaction, and you have to choose whether you want to be a client of a REALTOR® (represented) or an unrepresented party. One REALTOR® can still put together a deal for a buyer/tenant and a seller/landlord but one party would have to be unrepresented. The smaller a community is, the more likely it is that the REALTOR® you may want to use will somehow be in a conflict of interest and have to treat you as an unrepresented party.
When you choose to be the client of a REALTOR® they owe you special legal fiduciary duties as your agent.
These duties include loyalty, avoiding conflicts of interest, disclosing all relevant information to you and protecting your confidentiality. As an unrepresented party you are entitled to none of the special legal duties listed above. You will receive no advice and anything you say can be used against you.
Some more sophisticated consumers, especially in the commercial world, may feel they don’t need representation or advice.
They are free to make that choice, in which case one REALTOR® could put the whole deal together with only having loyalty to one party. The skills it takes to be a professional commercial REALTOR® should not be taken lightly and, even for the savviest of investors, just a little advice or guidance from their REALTOR® could save them from making a costly mistake.
By this point, hopefully you can see some of the risks that come with being unrepresented under the new rules.
Although your trusted REALTOR® may want to represent and protect you, in some cases, they will no longer be able to. In the commercial world, the majority of buyers or tenants seem to prefer calling the listing agent for information on properties. In the context of these new rules, the first step should be securing the services of their own REALTOR® and making all inquiries about properties through that REALTOR® so their interests are better protected.
As a seller, since your agent can only represent you, it is more important than ever to have a REALTOR® who is able to market your property to as many other REALTORS® and consumers as possible.
Don’t choose a REALTOR® who relies solely on their own personal list of contacts. The better your REALTOR® is at making good information packages, responding quickly to consumer and REALTOR® inquiries using proven and new technologies, and working with other REALTORS®, including offering a decent commission to other REALTORS®, the higher your chances are of maximizing the return on your investment.
In the end it is your decision, but it seems clearer than ever that staying loyal to one REALTOR® who can protect your interests is the right choice. Even if you do that, you may still end up in a situation where your REALTOR® is in a conflict because you are interested in one of their listings, or they have multiple buyers for that property.
The real estate association and some MLAs have tried to stop or limit the changes that have taken away consumers’ choice, but to date they have had little success.
Perhaps if enough consumers make their voices heard a change will happen yet again, but for now we are all stuck trying to figure out how to work in this new landscape.