We’ve been visiting a lot of open houses lately. I’ve heard we can get a better deal if we buy directly from the listing agent. – EAR TO THE GROUND
DEAR EAR: Sometimes buyers misunderstand the nature of the Realtor-client relationship and think they can get a better price on a home by working with the listing agent. When a Realtor represents both sides in a transaction, it’s called “multiple representation”. While legal in Ontario, this is something that I don’t actively pursue, since the potential for conflict of interest is just too great.
If a listing agent is already under contract with the seller, they are legally and ethically bound to protect the seller’s interests, negotiate for their benefit and keep their information confidential. If that agent were to represent the buyer as well, they would be obliged to provide them the same level of service. Obviously, this would be difficult to do without compromising one side or the other.
A buyer who is in the midst of a bidding war may hope the listing agent can tell them what they should offer in order to win the deal. This is not a viable strategy. Any agent who discloses such information is in breach of their ethical duties and could face severe sanctions.
PRO TIP: In my opinion, it’s essential for both buyers and sellers to have their own representation. A real estate transaction is a negotiation, and each each side needs a Realtor who is fully committed to their protection. Otherwise, it might be like heading into court with your opponent’s lawyer.
We’re downsizing and found a condo we love, but the complex is 25 years old. What if it needs major repairs in the next few years? We’re on a fixed budget. – WORRY WART
DEAR WORRY: Here in Ontario, the Condominium Act requires each condominium corporation to have a Reserve Fund. The Reserve Fund is set up to make sure that the corporation will have money on hand to cover future maintenance and repairs of common areas.
Reserve Fund contributions are taken out of the monthly condominium fees that are paid by each owner. The corporation holds these monies separately. So in effect, every condominium corporation has been saving for future repairs since it was first established.
Additionally, condominium corporations are required to complete an independent “Reserve Fund Study” on a periodic basis, typically every three years. The study confirms that the funds being collected are enough to cover the anticipated cost of any major projects over the short and long term.
PRO TIP: Old or new, condominiums are highly regulated. Their Reserve Funds allow owners to enjoy reasonable protection from unexpected fee hikes related to the upkeep of common areas.