If you are asking yourself why, or telling yourself that this does not make sense, you are not alone. However this is a practice seen very commonly amongst other professions such as lawyers, accounting firms and many other professions in North America. The idea stems from the fact that one party cannot represent the best interest of two separate entities in our case the one real estate broker, cannot properly represent the best interests of the buyers and the sellers on the same transaction.
If you are currently in the market to buy a home, or sell your property, you’ve definitely heard of the new guidelines that the OACIQ has set in place since June 2022. Although it is over a year that L’Organisme d’autoréglementation du courtage immobilier au québec has put in place new rules concerning double representation and guidelines on who can help who, and when they can or cannot is somewhat of a mystery we are going to try and debunk for our readers today.
The first thing we need to understand as readers, buyers and sellers is that representation is not possible to the OACIQ without a signed agreement between the real estate broker and the party (seller or buyer), and to make things very clear, what is not allowed or frowned upon by the OACIQ is simply double representation. This means that our governing body does not want one real estate broker to represent two parties in the same transaction.
Example: Groupe Baronello signs a mandate to sell 123 fake street with seller 1, and then signs a mandate with buyer 1 to purchase a home that seemingly fits the criteria of 123 fake street. In this scenario, our group cannot represent both parties in this transaction (as we used too).
Now that we understand the OACIQ definition of double representation, when it is not allowed to happen and why, let’s look at things from a different perspective. What if you (buyer 1) follow Groupe Baronello on social media and notice a beautiful home they just listed (with a signed contract representing the sellers) that interests you and your significant other… Are you allowed to contact us directly? The answer is yes. In this case, we do not have a contract with you stating that we represent you so our steps as a real estate broker are very clear
1. Ask you (the prospective buyer) if you have a brokerage contract to purchase signed with another realtor
2. If the answer is yet, we kindly request you contact your broker, if you say no, we will advise you that you have the right to use your own real estate broker to visit the property, or can choose to visit directly with us and receive fair and equitable treatment.
Should you decide to use the latter, we will send you all documentation concerning the subject property and we will give you a guided tour of the home (as we would have always done pre-2022) and should you want to proceed in writing an offer on the property, we will remind you of our obligations to the selling party, have you sign a document stating that you understand that we do not represent your interests but do promise to provide a fair and equitable treatment to you. Along with some other restrictions, as long as the prospective buyer understands the above, things are clear as can be. This does not mean that we will push you to pay more, or remove certain conditions, it is the opposite actually, we are bound to give a fair and equitable treatment and provide sound advice even though we do not represent your interests. We cannot tell you to waive an inspection condition or shorten your finance delays, we cannot show you recently sold properties that favour our listing price or that sway you in any direction, we must let you make your own decisions, and present those to our vendors.
As a real estate broker practicing in Montreal and surrounding areas, we do always sign contracts with our clients, whether they are buyers or sellers, and we recommend for everyone to do the same… This does not mean that it will never happen again to see a listing broker (sellers representative) sell a property to a direct client without representing them. If you are educated enough to make your own informed decisions, as a buyer you are free to work without the help of a real estate broker. As professionals, our duty is now just to make our obligations and your rights as a purchaser clear before moving forward. The OACIQ is assuring that everyone feels comfortable and protected throughout the transaction.
At the end of the day, double representation is something that truly does not make sense, how can one person properly defend the interests of two parties? But that does not mean that one person cannot help conclude a transaction between two parties in which he represents the interests of one. A realtor’s job is to advise and consult their clients, not make decisions on their behalf.
If you are looking to buy, or simply have any more questions concerning these regulations, don’t be shy to give us a call today! We are here to simplify everything for you!