Liz Toles, REALTOR® - Lethbridge Real Estate

If you were to ask this question to a real estate professional, they would say "Of course they exist!" But the same question posed to a member of the general public might get a much different response, likely one clouded with uncertainty. Why is it that this little tidbit of information is common knowledge to real estate professionals, yet many home purchasers out there seem baffled by the notion of "Buyer Agency"? Let's unravel this mystery by first sorting through a few common human emotions:

1. Fear of Looking Stupid:

It is human nature to hide the fact that we don't know something that we feel we should. For example, the first time I purchased a vehicle, I really didn't want the salesman to know that I knew nothing about cars! Why? I thought that would make me look stupid and give him an advantage.

2. Fear of Getting Ripped Off:

When I made the above statement, it became apparent that I felt it was a me vs. him thing in the battle of buying a car. I didn't feel that he was working in my best interest and I felt I needed to keep my guard up.

3. Fear of Contracts

Signing a contract is a big deal. Unless you have a law degree or have signed a lot of contracts, it is likely that your heart will pound and you might get a bit sweaty. After you are done, your feet might get cold, you will doubt your decision and you may feel regret. If you don't feel these emotions, even just a little bit, you may not be human. Buying a home is a big deal... you have the right to feel some emotion.

Now that we have addressed some of these emotions, let's get back to why the general public seems to know very little about Buyer Agency? The answer is simple: FEAR. I have always felt that the best way to combat fear is to arm yourself with a whole bunch of knowledge.

Here are 5 things you need to know about Buyer Agency in Alberta.

1. As a buyer, you can choose any REALTOR® you like to represent you in a real estate transaction. You can interview them, ask them a million questions and find one that you feel comfortable with. If you are not sure if they have answered all your questions, keep asking.

2. When you find one you like, you can enter into an Exclusive Buyer Brokerage Agreement. This contract will ensure that the agent you choose is representing your best interests and that they will put your interests above their own at all times. If you choose to work without a Buyer Agency contract, the agent you choose still owes you fiduciary duties that should be explained to you. However, the duties are much more clear and extensive if you work with a Buyer Brokerage Agreement. If you don't understand something in the contract, just ask.

3. You don't pay directly for the services of a Buyer's Agent unless they specify in writing that you are responsible for payment (and this will be covered in section 5 of the Buyer Brokerage Agreement). Nine times out of ten, the seller of the home you purchase will designate a portion of the commissions they are paying to be paid to the Buyer's Agent. If you are unsure about how your agent gets paid, just ask them.

4. If you have hired a Buyer's Agent and they show you one of their own listings and you like it, with informed consent, you will enter into what is called Transaction Brokerage. In this scenario your agent is loyal to and will represent both you, the Buyer, and the Seller. If you choose not to enter into Transaction Brokerage, your agent's loyalty will revert to whomever they first entered into contract with and the other party will be given the opportunity to seek other representation (perhaps from another agent in the company or one from a different company).If you need more clarification on Transaction Brokerage, just ask.

5. If you walk into a home (on Open House for example) and have not chosen a Buyer's Agent to represent you, keep in mind that you are NOT being represented by anyone. The agent in that home is under contract with the seller and has been hired to protect their best interests... not yours! If you are unsure of whom they are representing, just ask.

When it comes down to it, the only thing that is required to remove this shroud of mystery is communication. You must be prepared to ask a lot of questions and you need to find a REALTOR® who is able to answer (or find answers) to all your questions. When you hire a Buyer's Agent, it is not you against them... it is a smart person working with another smart and knowledgeable person to achieve the goal of purchasing a home!

Visit me for more information on Lethbridge Real Estate.

Transaction Brokerage (formerly known as Dual Agency in Alberta) is a common practice in common law real estate. Two examples where transaction brokerage might occur would be:

- You are working with a REALTOR® as your Buyer's Agent (ideally, under an Exclusive Buyer Brokerage Agreement). They introduce you to a property that they have listed for sale and you decide you would like to write an offer on it (and in Alberta, this would also apply to the properties listed by any other agent in your REALTORS® brokerage)

- As a Seller, you list your property with a REALTOR® (using an Exclusive Seller Brokerage Agreement) and then they introduce a Buyer to the property who would like to write an offer on it.

Before we proceed, there are a couple of things that you as either a Buyer or Seller should be aware of:

- Before entering into Transaction Brokerage, both parties must fully understand the role of the REALTOR® and must sign a written Common Law Transaction Brokerage Agreement form before continuing in the transaction.

- The role of a REALTOR® working under Transaction Brokerage changes. No longer can they "go to bat" for just one party. They must represent both parties in a fair, impartial and even-handed manner. They in a sense become a "facilitator" to the transaction.

So what are some of the challenges involved with Transaction Brokerage?

The REALTOR® representing both parties must show extra dilligence in making sure that they are impartial. Any information that is shared must be shared to BOTH parties (other than the information that a is not allowed to be disclosed with regards to price and motivation).

If one party does not agree (either Buyer or Seller) to Transaction Brokerage, the REALTOR'S® loyalty must remain with the party with whom they first signed an agreement with. Many Buyer's choose to work without a signed agreement (Exclusive Buyer Brokerage Agreement) so even if they had been the first to work with the REALTOR®, without that signed agreement, the REALTOR'S® loyalty would have to transfer to the seller (assuming that they had signed an Exclusive Seller Brokerage Agreement, also know as a Listing Contract).

The facilitating REALTOR® loses their ability to give advice or voice an opinion UNLESS either the Buyer or the Seller specifically asks for information (and the information they give can not give an advantage to either party). A good REALTOR® will guide both the Buyer and the Seller through the questions they should be asking and will present any information needed in order to make good decisions.

So what are some questions that you need to be asking throughout the process?

Buyers:

Can you show me what properties similar to this one have sold for in the recent past? What would be an acceptable offer amount in this situation?

Do you reccomment that we have a property inspection done?

In this situation, what is a good amount of time to leave for conditions to be removed? What is a good amount of time to leave before possession?

What is the normally accepted amount in this area for the deposit that accompanies the offer?

Sellers:

Is the deposit accompanying the offer a dollar amount that is typical for this area?

What would be an acceptable counter offer in this circumstance?

Is this term / condition of the offer a reasonable request in this situation?

Each situation will be different, but a good rule of thumb is: If in doubt, ask questions, lots of them. Make sure you are satisfied with the answers, and if you aren't, seek guidance from other professionals outside of the transaction (lawyers, property inspectors, appraisers, etc...)

Transaction brokerage does have it's advantages as well. With one person representing both parties, there should be excellent knowledge of the property and the flow of information should be very smooth between both parties.

I work with a partner and we have our own way of dealing with transactions where we represent both parties. My partner and I co-list every property that we put up for sale with one of us chosen as the primary agent for that listing. If we get a call on the property, the secondary agent on the listing is the one who will show the home (unless it is not at all possible). If the buyers then wish to write an offer, they will continue to work with the agent that introduce them to the property and the other agent will continue to work with the sellers. We are still in a "dual agency" situation, but it allows for a bit of separation between the two parties and has worked very well for us in the past.

Transaction Brokerage can be done successfully by a professional REALTOR® who is careful to explain the process to both parties and who makes sure that each party understands the process at each step of the way.

Visit my website for more information on Lethbridge Real Estate.

As the year came to a close, there are a few things to note when looking at the Lethbridge, Alberta real estate market for the month of December:

1. Currently there are 566 homes for sale in Lethbridge (399 single family, 146 condo, 21 mobile homes)

2. 118 of those 566 listings were put up for sale in the month of December.

3. 55 homes sold in Lethbridge in the month of December.

Now in order to see where we are in heading, we need to look back at the statistics for the entire board for the past few months:

August - 534 new listings, 236 solds

September - 460 new listings, 228 solds

October - 527 new listings, 171 solds

November - 354 new listings, 107 solds

December - 240 new listings, 92 solds

The number of new homes put on the market changed each month by -14%, 14%, -32% and then -47% respectively. Other than the increase in October, there has been a dramatic decline in the number of new homes put up for sale each month. Comparatively, the number of homes that sold each month drops by only 3%, 25%, 37% and then 14%, respectively.

The December stats could be an indication that our local market in Lethbridge is very near equilibrium. The decline in the number of new homes listed for sale each month is outpacing the decline in sales (and home sales typically slow in the winter months, so we can expect to see an increase in sales activity in the spring months).

What can we expect to see in the coming months for the real estate market in Lethbridge? If supply continues to decrease rapidly and the demand for homes stays at a constant, the inventory of homes for sale will continue to deplete. The forces of supply and demand dictate a market, and in this scenario, their forces will hold prices steady.

What does this mean for Sellers? I can only echo my thoughts from previous months: Price your home competitively and make it shine. It is still a tough time to be a seller. Get a professional on your side and keep your expectations realistic. Realize that if you are selling and then buying in the same market, you will make up for any perceived losses on the buying end.

What does this mean for Buyers? A Balanced Market means the end of a Buyer's Market. If you are sitting on the fence, now is the time to jump in and put your money and patience to work for you. Selection is steadily decreasing, interest rates are holding and there are many homes out there priced at or below market value.

My predictions for January - 205 new listings, 89 solds

Check back at the beginning of February for actual January statistics and if you want more information on Lethbridge Real Estate and the surrounding areas, please visit me at Lethbridge Real Estate.

Lethbridge and District Association of REALTORS®

MLS ® Statistic Report

[DECEMBER 2008 ]

In my efforts to stay on top of the real estate market in Lethbridge, I make it part of my job to study what homes are for sale. And I don't limit my efforts to just the properties listed on the MLS® system. I frequently visit the FSBO sites that have a small share of the real estate listed in our city. In my most recent visits, I made these observations about the current state of FSBO's in Lethbridge:

1. 95% of the properties listed on the FSBO sites are grossly overpriced. When I worked a reverse market analysis on the FSBO homes for sale using properties that have recently sold, the gap between market value and what the vendor is dreaming of getting is astronomical! I'm talking almost $100,000 over current market value for more than one of the homes I worked my numbers on!

2. The other 5% is underpriced. They have great properties, good photos and a reasonable asking price. So why aren't their homes selling? Simple... they are not being guided by a professional REALTOR® who is able to market the property to it's full potential.

3. The popularity of FSBO companies is steadily declining. Many former FSBO's are turning to the help of a REALTOR®. They're not giving in... they're just getting smart. In a seller's market, it's easy to sell. Now it's time to call in the help of a professional who does this every day and knows what it takes to get a home sold.

So, as a seller, if you really want or need to sell your home, please talk to a professional. Pricing and marketing are so key right now, and this is what a REALTOR® specializes in.The value of your home is the best it will be today!

As a buyer, you need to get a REALTOR® on your side to make sure you aren't offering on the home that is listed $100,000 over market value! Or you need a REALTOR® to help you decide which one is listed 5% below market value! (And yes, many FSBO's will and do work with a client who is working with a REALTOR® and will also pay a commission.... an offer is an offer.)

With that being said, there were a small handful of people who did the FSBO thing really well. They staged their properties, took lots of photos, set a realistic listing price and encouraged REALTORS® to bring them a client (we do have access to a lot of buyers... why a FSBO wouldn't encourage an agent's help is beyond me). It is with these select few that I say "You must have taken a lot of time to do this right... and you are good at it, so get licensed already!"

Visit me for more information on Lethbridge Real Estate.

Are you considering buying a home in Lethbridge, Alberta? Are you looking for more space, a better location, an investment property? Are you pre-approved for a mortgage and ready to make your move? If you have answered all these with a yes... my next question is, "Why are you still waiting?"

The answer is likely "fear". Fear that you will overpay, fear that interest rates have not hit their lowest, fear that the timing is not perfect. Well, if your decision to wait is rooted in fear, I have something that can help you. No, it's not that almighty crystal ball (although that would make things much easier!) That something that I have is knowledge.

I have knowledge of the current inventory. I am out there seeing it every day and evaluating it with critical eyes. I am showing homes to great people who are seeing the opportunity to buy right now and we are finding the best buys and we are writing up offers.

I have knowledge of the lending industry right now. I married a great man who is also a mortgage specialist in Lethbridge and our pillow talk usually consists of interest rates, what it takes to get mortgage approval these days and a strong belief that now is a good time to buy.

I have knowledge of contracts. I know how to protect you from paying more than current market value for a home. Did you know that you can have your own Buyer's Agent when you purchase a home? When you sign an Exclusive Buyer Brokerage Contract, your REALTOR® works for you and you alone and represents your interests only. Some of the practices that I follow when working with buyers include performing a reverse market analysis on any property you are interested in purchasing and helping you understand why a certified appraisal can be a great negotiating tool when buying a home.

I have knowledge of investment properties in Lethbridge. As the owner of investment property, I keep up to date on current market rents, vacancy rates and any changes to code that could affect a suited property. I have formulas that I use to predict if a property will have positive cash flow and to help a buyer avoid the dreaded "alligator".

I have knowledge of the range of emotions that a buyer goes through when purchasing real estate. It's a big investment and if you aren't a seasoned pro, you are likely experiencing a lot of different emotions. I am here to walk you through those emotions and make sure you are comfortable with your purchase.

I am ready to work for you and I would love the opportunity to put my knowledge to work for you. It's my job to study real estate every day and I take it very seriously. And believe me when I say, now is a good time to buy!

Visit me for more information on Lethbridge Real Estate