Are you looking to buy a home in Ontario? Whether you’re looking to buy in Toronto, Hamilton or Kitchener, it’s a good idea to work with a real estate agent. By working with a local real estate agent who knows the real estate market well, you’re more likely to find your dream home sooner and pay a reasonable price for it.
When working with a real estate agent, you may be asked to sign a buyer agency agreement. The buyer agency agreement is a legal document that outlines the relationship with the brokerage. (In Ontario, it’s the BRA , for “buyer representation agreement,” which may be a funny acronym, but don’t let it fool you—it’s an important legal document.) It includes information such as your desired property type, location, commission and the amount of time of the agreement. It also places fiduciary duty on the brokerage to promote and protect your best interests.
Being an agent can be tough. When your agent helps you look for a home, they won’t get paid unless you buy a home with them. The BRA at least guarantees you won’t go behind your agent’s back and use another agent.
Should you sign a buyer agency agreement? In my experience, it’s usually the newer agents who ask you to sign one. When you do, you’re committed to working exclusively with the real estate brokerage for the length of the agreement. If your agent is a rock star, it shouldn’t be a problem. But what if they’re not a good fit? Unless they let you end the agreement early, you’re stuck working with the same brokerage until the agreement expires. If you buy a home with an agent at another brokerage, your first agent could sue both the second agent and you for breaching the agreement.
When you’re asked to sign a buyer agency agreement, think of yourself like the franchise player on an NBA team. Would Kyle Lowry or LeBron James sign the first contract offer put in front of them? I don’t think so. Take time to think it over. If you do decide to sign an agreement, give your agent a trial run. Start with 30 days and see how it goes (signing any longer than three months is nuts!). You can extend it once your agent proves they’re a rock star. Also, make sure the agreement is limited to a specific geographic area and property type (e.g., houses, townhouses, or condos).
Check with the regulator in the jurisdiction you’re buying in for the rules on buyer agency.
Brought to you by Sean Cooper