Real Estate Talk:
Why use a broker to purchase

A few major advantages to using a broker to buy property

By Joseph Marovitch

 July 17, 2024

A buyer visited a property that was being sold by an older gentleman who placed a sign he purchased from Canadian Tire on his front lawn. The couple rang the doorbell to inquire and the seller invited them in to see the property. The seller told them he kept the property in excellent condition and immediately offered to sell the property for $500,000.

He told the buyers it was far less than he originally wanted but if they would agree that day, he would. They decided to proceed. Both parties did contact a notary and a week later the deal was done. The buyers did not have all the available cash for the purchase so the seller offered a balance of sale in which the buyers could put down some cash and pay the seller with monthly instalments.

When they moved in, the buyers started to find issues such as low water pressure, the exterior walls requiring repair, mould in the basement, and several built-in appliances such as the garburator and water heater not working. Upon calling an electrician to repair the issues, the electrician noted no plugs were grounded and the buyers could get shocked.

Both had costly problems that could have been avoided. However, there was no inspection, no clause in any contract that would curtail these issues such as proof of funds or examination of documents, and no guidance.

Two issues, among several, occurred. First, the buyers went after the seller for damages after they started repairs, and they had no more funds to repair the house. Secondly, with a balance of sale, the buyer would take the house back, but in worse condition than when he sold it. Both had costly problems that could have been avoided. However, there was no inspection, no clause in any contract that would curtail these issues such as proof of funds or examination of documents, and no guidance.

Lawyers for both parties would untangle the mess but it cost the buyer and seller plenty.

Many buyers and sellers, without brokers, do not realize they are subject to the rules, terms and regulations of the Real Estate Brokerage Act (REBA), which is an integral part of the Quebec Civil Code. This means that if they sell or buy on their own and do not run into issues, then all is fine. It is when legal issues arise, and a lawyer is retained, that the rules in the rules of REBA come into play.

Many buyers and sellers, without brokers, do not realize they are subject to the rules, terms and regulations of the Real Estate Brokerage Act (REBA), which is an integral part of the Quebec Civil Code.

To this end, it is strongly advised to use a broker. Real estate issues can be some of the most expensive issues in one’s life. Beyond REBA there are a myriad number of reasons to use a broker when purchasing.

1. A broker will search for property based on the buyer’s very clear criteria when asked specific questions by the broker. This narrows the search and saves time, money, energy and gas.
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2. Brokers acquire detailed information on the property the buyers are interested in purchasing, such as:
   – Year of construction
   – Any taxes outstanding
   – If there are 60-day assessments on the property
   – Precise measurements of the property
   – Expenses of the property
   – A seller’s declaration indicating the condition of the property to the best knowledge of the seller, is very important if issues arise and for pricing
   – And much more
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3. Arrange an inspection to assess if any issues may devalue the property causing either renegotiation or cancellation of the offer.
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4. Brokers provide security, protection and insurance against defects, fraud, sellers deciding not to sell after all conditions are met, sellers incapacitated and unable to show up at the signing at the notary, etc.
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5. Brokers provide and manage all forms that state the terms, conditions and deadlines of the sale.
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6. Brokers negotiate the best terms, conditions and price to the maximum benefit of the buyer.
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7. Brokers are trained and experienced in the Real Estate Brokerage Act and its laws to either avoid or resolve legal issues.
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8. Brokers either procure inspectors, notaries, mortgage brokers and more that they know and trust from experience, or carefully observe the ones they are not familiar with to ensure proper and good work is being performed.
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9. It is the broker’s expertise and years of experience that enable them to see potential problem issues before they occur and provide advice or resolutions.
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10. Brokers are neutral in negotiations and conflict resolution which enables them to manage issues that most buyers are emotionally not trained to handle. It is very important in negotiations to keep a good rapport with both parties. Emotions can interfere and break down what might have been a very good transaction.

Should you have questions or comments, please refer to the comments section at the bottom of the page. As well, to view past articles, click here.

Next article: Prep to sell during the summer months

State of the market

Much has occurred to affect the real estate market, starting with the attempted assassination of the president-elect of the GOP. The failed assassination attempt has emboldened the Republican party and provided much more political clout along with a recent Supreme Court ruling that has provided present and future presidents immunity from prosecution for their actions while in office.

These recent issues have tipped the scales of the election in favour of the GOP. On the GOP platform, they intend to cease any further funds to Ukraine and allow Russia to attack any NATO country that does not pay their fair share as per his doctrine of America First. Should Ukraine fall to Russia and should Russia enter a NATO country for the purpose of domination, we would be looking at escalating tensions, further war, and emboldened countries such as North Korea, Iran, and China. In turn, we would see slow supply chains, rising inflation and interest rates. In four months, we will know more.

‘In the coming months, we expect to gain more clarity on the direction of the market. Until then, it’s advisable to remain vigilant and adaptable to potential changes in the real estate landscape.’

The real estate market remains sensitive to political and economic developments. Real estate professionals and investors need to stay informed about these developments while maintaining a balanced, long-term perspective. In the coming months, we expect to gain more clarity on the direction of the market. Until then, it’s advisable to remain vigilant and adaptable to potential changes in the real estate landscape.

Have a great week.

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Feature image: Alena Darmel – Pexels

Other articles by Joseph Marovitch