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Service agreements are contracts entered into by a real estate licensee and their client. A service agreement outlines the expectations and obligations of each party. Service agreements will include:
- the names and addresses of all the parties;
- the amount of remuneration (if any) the seller is required to pay the real estate licensee’s brokerage;
- the duration of the listing agreement;
- how your personal information will be used.
Once you have selected a real estate licensee to work with, that professional will use market research, along with their knowledge and expertise, to assist you in setting the best listing price for your home.
Before finalizing the asking price (sometimes referred to as the list price), you may wish to ask your real estate licensee to prepare an estimate of the net cash proceeds you will receive on completion of the sale, based on the suggested asking price and the financing arrangements currently in place.
After an asking price has been established, you will be asked to sign a service agreement. This service agreement is typically referred to as a listing contract and can either be an exclusive contract or what is known as a multiple listing contract. Once this contract is entered into, your real estate licensee must provide you with a fully executed copy of it. In B.C., electronic signatures are valid on all types of contracts. This must not be confused with an email signature at the bottom of the email. An electronic signature must be on the contract itself as would a signature written in ink. Your real estate licensee will have programs that can be used to facilitate an electronic signature and it can be done on a phone tablet and many computers.
Exclusive listing gives the seller’s brokerage the sole right to sell the home. This means that even if you sell the home to a prospect of your own during the term of the listing, you must pay the agreed commission to the seller’s brokerage unless that prospect was specifically excluded from the listing agreement.
Multiple listing is a form of exclusive listing which differs from exclusive listing only in that the seller’s brokerage agrees to register your home in a Multiple Listing Service (MLS®) so that its availability is made known to all real estate licensees who are members of the local real estate board.
In this case, the seller’s brokerage agrees to share a specified amount of the commission with any other member of the real estate board who is able to find a buyer for your home.
In addition to the Listing Contract, the real estate licensee may ask for additional information to assist in the marketing of your home, including:
- the existing financial arrangements and whether this financing can be assumed by a new owner;
- a list of items attached to the building (normally called fixtures) which are not to be included in the sale; for example, a fireplace insert or a crystal chandelier; and
- the date on which you can give possession of the home to a new owner.
When you employ a real estate licensee, you are responsible for providing them with accurate information concerning your home, such as:
- its age;
- the current financing arrangements;
- the condition of the roof and hot water heater; and
- the property taxes.
The real estate licensee may also need your assistance to gather information about such things as the ownership details, the outstanding balance owing on the mortgage, the home’s assessed value, and the current zoning of the property. Most information is publicly available at the Land Titles office and is not considered to be confidential or private information.
For strata titled properties, real estate licensees will want your assistance to gather and provide information, including:
- minutes of all strata meetings in the last two years;
- current financial statements;
- registered bylaws;
- current rules;
- building inspection or engineer’s reports;
- Information Certificate (Form B prescribed under the Strata Property Act);
- how parking stalls and storage lockers are designated;
- whether a special assessment is being proposed; and
- any other documentation relevant to the strata property.