Whose interests is your agent really working for?

In part 2 of my exposé-series on the “Out of Town Agent” I will address what I believe to be the ethics of selling real estate in an area that you’re not familiar, or in which you do not belong to the local association of Realtors.

So here is a typical situation; you hire a Realtor to sell your house in one market and they offer to help you buy in another market. Many consumers would happily agree as they already have established a rapport with their agent, trust them, and think their Realtor is going above and beyond by traveling a distance to representing them in another market place. It all seems innocent enough but there is a problem: your “best interests”. 

As Realtors we must abide by the Real Estate Business and Brokers Act 2002 (REBBA), legislation that outlines how we trade in real estate with the ultimate goal of protecting consumers. Part of this Act includes a strict code of ethics that every Realtor in Ontario must adhere to, a code of ethics that clearly states we must protect, promote, and act within our clients “best interests”, and   that we must be knowledgeable in what we sell[1]. One could argue that a contract is a contract and a sale is a sale regardless of the area it’s located in. But the reality is real estate knowledge is very regional and there are many important differences between selling a house in Toronto vs. selling a house in Northumberland. This is especially true when comparing an urban Toronto property with a rural Northumberland one.

I once had a rural property for sale and an agent from the city called me and asked what I meant in my listing by “septic”. They actually had no idea what a septic system was or what it’s used for. I can’t count the amount of times an “Out of Town” agent has asked me what the crime rate is in a particular neighbourhood. If you’ve ever been to Cobourg you’ll understand the humour in this question as Cobourg is one of the safest towns around.

As Realtors we have a fiduciary duty to act in our clients "best interests" and owe our buyers full disclosure. If your dream house seems too good to be true for the price perhaps it’s because it was a former grow operation, or it backs on to an area that is soon to be developed. What’s the likelihood that a Realtor who has never stepped foot in the area is going to be aware of these important details that could dramatically affect the value of the house and ensure you’re making a wise choice?

A perfect example of this is the 'Port Hope Area Initiative'. You, my local reader, may have heard of it but there’s a good chance the “Out of Town Agent” hasn’t. This government initiative affects every property sold in Port Hope. There are specific clauses and legal conditions that need to be included within any offer of purchase and sale. Most local agents have been through extensive training and are well aware of the ins and outs of the program. There was a legal case a number of years ago where a buyer purchased a home in the Port Hope area and was never informed of the Port Hope Area Initiative or provided a 'certificate of clearance' that is a standard requirement for every transaction in Port Hope. The buyer’s agent never informed them of the program, provided a status certificate or any appropriate disclosure.

In my opinion, the Realtors who are willing to sell a client a property in an area that they, as a Realtor, are not familiar with or an area where they are not a member of the local association of Realtors are not protecting and promoting their clients' interests. My advice is that before you agree to be represented by an agent who is unfamiliar with the market you’re buying in, you might want to ask yourself just whose best interests are they really working for.

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[1] Real Estate Business and Brokers Act 2002

Best interests

 4. A registrant shall promote and protect the best interests of the registrant’s clients.

Conscientious and competent service, etc. 3

 5. A registrant shall provide conscientious service to the registrant’s clients and customers and shall demonstrate reasonable knowledge, skill, judgment and competence in providing those services.  

The opinions expressed in this blog are solely those of Jacqueline Pennington and do not represent those of the Northumberland Hills Association of Realtors or RE/MAX Lakeshore.  

Copyright © 2014 Jacqueline Pennington. All rights reserved.