Why are Realtors Asking you to Sign a Service Agreement in Manitoba?

For those looking to move in Manitoba, you might have noticed a few changes in the last couple of years should you have reached out to a Realtor for advice or questions. Some of the changes have been subtle – but some not as much. If your Realtor or potential Realtor has told you that they need you to sign an agreement, prior to providing you with advice or information on listings, there IS a reason for that.  It is simply this: They ask, because now they HAVE to!

What are the stipulations?

Effective January 1, 2022, the Real Estate Services Act came into effect in Manitoba. The most notable difference, in our opinion, is the requirement to have a Written Service Agreement before providing services to ANY client – Buyer or Seller. This must be a written agreement signed by all parties. These agreements have existed for some time, so you may have heard of them before, but only recently have they become mandated by the Manitoba Securities Commission. Some areas that are considered to be a service include:

• Preparing market evaluations for Sellers
• Sending listings information to Buyers
• Preparing and presenting offers
• Advising on appropriate terms on a contract
• Advertising a property
• Showing a property
• Sharing sales history on properties
• Providing staging suggestions
• The list goes on – but you get it!

What do these changes look like?

In the past, we were required to sign listing contracts with Sellers. So, the changes there are more subtle. A Service Agreement should still be signed prior to reviewing our assessment of a Seller’s home – which is oftentimes prior to the signing of any listing contract.  This can make a Seller nervous should they be interviewing many Realtors for the sale.  What we usually will do to alleviate these concerns is sign a contract for only a 3-hour period.  After which, it lapses and they are free to choose whomever they want to represent them in their sale.  They are not bound to us.  However, if you do select us to sell your home, a minimum of a 60-day contract must then be signed for the sale (The MLS requires 60-day contracts in Manitoba – their rules, not ours!).

The most notable difference though is for Buyers. In the past, it wasn’t uncommon for a Buyer to call us, ask us to be setup on a search for their dream home.  We would usually discuss their home search goals, timelines, and advise on what was reasonable and start sending them some comps that we thought could work for them.  This is no longer possible unless we have a signed service agreement upfront.  Terrifying, isn’t it?  Committing to a Realtor without any real opportunity to get to know them seems nerve-wracking – and we agree.  It wouldn’t be our first choice of how to do business, but it is our required choice.  Ours and EVERY other Realtor in Manitoba.

What it means to sign with our team?

So, what does this mean if you are signing an agreement with our team?  It’s simple!  It means:

• Putting pen to paper to establish that you have authorized us to work on your behalf.
• It means setting terms and timelines that YOU are comfortable with. 
• It sets out terms for canceling the agreement
• It adds clarity to the Realtor-Client relationship.
• Our service agreement is exclusive – which means we represent you throughout your entire home-buying or home-selling process.
• There is no cost to sign our Buyer Service Agreement.  Realtors are typically compensated by the Seller in the transaction, and as a result we sign all of our agreements at 0%!
• For Sellers, there is no additional fee to sign this agreement beyond what agreed to within our MLS listing contract.

Other housekeeping items

If you are concerned about long contracts, fret not.  We do have an easy cancelation policy.  BUT we also understand that signing an agreement is still scary.  As a result, our team has instituted a quick trial period for those that want to “test out” our services.  The initial contract need only be signed for two weeks.  We like to call this period an orientation period. In this period, we typically:

• Discuss an overview of the process
• Put you in touch with the right professionals – such as mortgage brokers, home inspectors, etc.
• Provide you with a copy of our Home Buyer Guide
• Start sending you listings and sales statistics for your chosen areas
• Essentially, get you setup for success!

If you are happy with us after this initial two-week trial, then we can look at signing a more long-term contract.  If you aren’t, consider the contract canceled and you are free to look for new representation!

Please be careful

If you are calling listing agents to go and tour their listings, they are not required to have a signed service agreement with you.  Some might enjoy the freedom this provides from signing a contractual agreement.  BUT keep in mind, it does come at a cost. The Realtor has already signed a service agreement – it just isn’t with you.  They have signed it with the Seller and that allows them to market and show the property on the Seller’s behalf.  What does that mean for you, the Buyer?  It means you are not properly represented and that anything you might say while on that tour could be used against you in future negotiations.  So please, be careful.  We truly believe that it is always in our clients’ best interest to have their own, individual representation.

Even though it is mandatory, we can understand that it is terrifying to sign a contract with someone before really having the opportunity to work with them.  If your fear is that you aren’t going to mesh well with your Realtor, it is important to have that honest discussion upfront.  Clear communication is truly essential, and sometimes it is best to have an opportunity to clarify and explain.

Also, keep in mind that a Realtor that agrees to represent you but does not have this documentation signed upfront is actually breaking the law.  Is that the type of representation you want on your side on one of the biggest transactions of your life?

Can you cancel at any time?

This will differ from Realtor to Realtor, as each Realtor has the right to set out their own terms in their Service Contract.  But for our team, the answer is YES!  Truth be told, if it turns out you don’t want to work with us, you simply need to let us know and we will happily cancel the contract. We would never want to force someone to work with us.   

Additional resources

For more information, here is a link to the Manitoba Real Estate Association’s write-up on these service agreements

https://realestatemanitoba.com/promises-on-paper

#AgentJen

Jennifer Queen

Phone: (204) 797-7945
Email: Jennifer@JenniferQueen.com

One of the best parts about being a realtor is helping customers see their dreams come true. For some customers it is walking into a new home and seeing their eyes light up at the sight of the spacious kitchen, or the dazzling ensuite. For other customers they dream of building a custom home. The opportunity to turn your dreams into a tangible reality with a local home builder is a unique experience that does not happen often in most people’s lives.

If this is you, and you are excited about turning the home in your dreams to the home of your dreams you may be wondering “how do I make sure I pick the best custom home builder available to me?”. Building your forever home is an exciting but daunting undertaking. It takes some hard work to find a really good home building partner, but that is well worth the effort when the reward is a dreamy custom home.

Step 1 – Get a List Together

Having toured numerous Winnipeg properties, you realize that there are none that check all your boxes. So, with the decision to build custom, you get to determine exactly what boxes need ticking. Spend time putting together the things that are important to you. Are you looking for a sustainable home to reduce your ongoing energy costs? Are you after healthier materials to reduce your allergies or the VOC’s in your home? What features do you want in your home? Are there going to be saunas? Steam rooms? Elevators for aging in place? Get your scorecard together, and then get ready to start searching.

There are a lot of decisions to make during the home building process, especially if you choose to build a custom home. You will get to choose everything from countertops and flooring to the colour of the door hinges on all your interior doors. You can pick the size, shape, colour and wood species of your baseboards and casing. If you have strong feelings, you can even weigh in on joist end insulation details! Ultimately when building truly custom you can choose as much or as little customization as you wish.

At this stage you should also start looking for interior designers that you will want to work with. Do not begin working with your interior designer until you have found your builder, but due to the volume of decisions and information tracking required for a new custom build, it is helpful to have a designer who can save you time and money by helping to guide your selections.

Step 2 – Gather a Large Pool of Contenders.

At this point it is a great idea to speak to a trusted real estate agent , friends, family members and neighbours about their experiences. They may suggest a great company they have experience with. This company should be top of list to check out. They may suggest there are some companies not worth talking to. There should also be a list for this. At this stage it is a good idea to cast a wide net, use your list of priorities and must-haves to inform your search terms.

While compiling this list make sure you are attentive to the professionalism and response times from the companies. It will be an indicator of how willing and comfortable they are helping you with your custom build. A smooth sales process and attentive listeners at sales meetings indicate they truly care about you and your priorities and will not try selling you stock plans to suit your specific needs.

Step 3 – Start Weeding!

When you get to this stage you will want to be quite picky about the ones that make it on to the next interview stage. You want to make sure you do proper research because interviewing and meeting with your top choice builders will take some time. At this stage we recommend asking some very specific questions to confirm they have the capacity or professionalism to deliver a great product with a fun relationship.

There are some good templates available, but the prime point of this exercise is to determine the builder’s confidence at building what you want built. You will want to ask about their previous experience with your list of wants and must-haves, and if they meet basic professional requirements (insurance, what size deposit is required, where do they work, are there hidden fees, what style is their contract)

This step should give you a good idea if you are talking to a custom home builder, or a track builder who wants to sell a pre-designed home. You will need to decide how custom your needs are. If you are after an economical new home where you can choose the floor type and paint colours you may not need a fully custom design-build firm that starts drawing your home from scratch. If you are looking for a unique in-fill home that matches the lot and capitalizes on passive solar heating techniques, you will want to have a fully custom builder.

Some custom builders will have in-house design teams, and others will work with architects they recommend. Both options are good, but you will want to make sure that the design and building components collaborate early and often. With modern technology some design-build firms will provide 3d photo renderings, others will provide full texture elevations, and some will even provide a full VR experience where you can literally walk through the home before you apply for permits.

Step 4 – Start the Interviews

The goal of the process to this point is to find three or four well suited home builders to increase the chances of you finding an excellent match that can make the journey fun and rewarding. With the right partner, you will find yourself guided through a fun and rewarding process. The point of the interviews in step 4 is to figure out “do we get along” and narrow your list of three or four down to one builder to rule them all.  

Up to this point you likely have been talking to just the sales team, but now is your chance to ask to meet more of the team. If you can chat with a production member and accounting member as well as sales team that is great. They will be taking care of you during the process, so it is good to know if you’ll be able to get along. Again, it will be a 1–3-year commitment, so making sure you enjoy interacting with your builder will go a long way!

In the interview phase you will want to ask them about some projects that are like yours and ask how those projects went. What were the challenges, what went well? After you have heard from your prospective builder it would be good to get references from the customer on that project as well as a couple others to ask about their experience with the builder.

You will notice that pricing has been absent from the process to this point. The reason we recommend waiting to talk pricing till the end is that pricing is tough to compare builders on. Some builders price basic across the board, and others will include energy efficient features (like ICF instead of conventional concrete), or upgraded finishes based on your wants list. So square foot pricing doesn’t really work because each builder will assume different specs.

Once you have your list at three or four builders you can now engage in more in-depth pricing exercises. At this point you will want to make sure you have preliminary house plans together with an idea of the finishes you want. When you have just a couple builders pricing you can afford to spend more time with each one to confirm they are pricing the same things. Some builders will give rock bottom allowances regardless of the finish level you request, so make sure you confirm that they are indeed pricing what you asked for.

Step 5 – Contract Review

Once you have made it through the steps and have narrowed your list down to one solid option, it is time to request the contract and do a formal review of it. It is well worth having your lawyer provide their opinion on the contract, and ensure it is fair to both parties. Some builders will not be flexible on the contract terms and others will be open to revising some terms, though they will likely ask you to pay for their legal fees on having their lawyer review.

The contract is an important thing to make sure you understand and agree with. This will lay out the ground rules for how the project will go and how each party should conduct themselves in regard to timelines, payments, dispute resolution and so on. No matter the conversations about how a company conducts itself the contract will be decisive in what you can expect to be the minimum treatment of your relationship.

Now with a good build, the contract never comes out again after having signed it and the work has commenced. With the homework you have done until this point in selecting your builder, it is likely this will be your experience. However, if things go rough, and either party needs to enforce the contract it is good to be fully aware of what you can expect.

So, there you have it. A guide to follow in anticipation of taking a large, exciting and rewarding step. When you find the right builder, and you can work openly and honestly with each other the process of building a home will become fun and edifying. If you need help finding a lot in a desirable in-fill community, or in a new sub-development, reach out to the Queen team.

Guest post from Dueck Builders

Josh Friesen

(204) 806-0616