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.
For more information, here is a link to the Manitoba Real Estate Association’s write-up on these service agreements
Phone: (204) 797-7945