Representation Series: Buyer Representation Agreement in Ontario (Form 300)

Representation Series: Buyer Representation Agreement in Ontario (Form 300)

In this episode I explain the new legislation, TRESA (Trust in Real Estate Services Act), which aims to provide greater transparency in real estate transactions. I go into detail regarding the major sections of the RECO Information Guide which is now 11 pages long and provides detailed information about agency and consumer expectations. I then focus on the Tenant Representation Agreement - Form 346, explaining its components, including the name of the Brokerage, the designated representative, the start and expiry dates, and the property type. I also discuss the  commission structure, the relationship between the tenant and the brokerage, and the concept of multiple representation. Finally, I  mention the use and distribution of personal information and the declaration of insurance.

Form 300 is a contract between a Buyer and a real estate company and its designated representative that gives the real estate company permission to act on the Buyer’s behalf in the purchase of a property. Assuming the Buyer is a Client of the real estate company, the Real Estate Council of Ontario (Ontario’s governing body) TRESA General Regulation requires that Salespeople have a written Buyer Representation Agreement presented for signature prior to an offer being presented on behalf of the Buyer. TOP SECTION OF THE AGREEMENT: The section at the top identifies the parties involved in the Agreement and sets the time frame for which the contract is valid. The TRESA Code of Ethics requires the Buyer’s initials on this Form.

The Buyer is warranting that the Buyer has not entered into any buyer representation agreement with another brokerage.
The Buyer hereby warrants that the Buyer is not a party to a representation agreement with any other registered real estate
brokerage for the purchase or lease of a real property of the general description indicated above (the section that describes the type and geographical location of the real property).

Important:

COMMISSION: This section of the Agreement sets the structure for the commission to be paid to the real estate company. It states that
the Buyer agrees to pay a commission to the real estate company the detail of which is set out in this section. The real estate company is
entitled to commission when the Buyer enters into an agreement to buy or lease property. The Buyer agrees the commission may come
from a listing brokerage or from the seller. If it turns out that there isn’t enough the Buyer will make up the difference.
2. COMMISSION: In consideration of the Brokerage undertaking to assist the Buyer, the Buyer agrees to pay commission to the Brokerage as follows:
If, during the currency of this Agreement, the Buyer enters into an agreement to purchase or lease a real property of the general description indicated
above, the Buyer agrees the Brokerage is entitled to receive and retain any commission offered by a listing brokerage or by the seller.....

YouTube Video - Buyer Representation Agreement Form 300 Explained

Ciao ciao

Transcript

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Nico James-Bock: The buyer. Representation, agreement, authority for purchase or lease form 300. This is the document that establishes the agency relationship between a buyer

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Nico James-Bock: and the brokerage and designated Representative.

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Nico James-Bock: The Buy Representation Agreement forms part of the Representation series that I Am. Providing through this Podcast brick by brick, real Estate.

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Nico James-Bock: building real estate through building wealth through real estate. The Buy representation agreement is the document that

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Nico James-Bock: establishes a relationship between a buyer and the real estate company before the buyer

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Nico James-Bock: signs such an agreement. The designated representative is to present the buyer with the Rico Information Guide. The Rico Information Guide is a new guide under Tresa, that is, trust in real Estate Services Act phase, 2 of which kicked in on December 1, st 2023.

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Nico James-Bock: The Rico Information Guide provides detailed description of the process through which a property is sold or bought.

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Nico James-Bock: or least it outlines the relationship, the different types of relationship, and the different types of representation.

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Nico James-Bock: There are several

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Nico James-Bock: sections to the guide before Tressa. The working with a realtor was just a pamphlet, a 1 or 2 page document that explained

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Nico James-Bock: agency, the Rico Information Guide is 11 pages long. It goes into great detail. The different types of agency, the different types of representation, and the rights and responsibilities of the parties involved.

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Nico James-Bock: it outlines also the complaint process. So if a consumer has a complaint with regards to a registrant, there are steps to be completed, and the guide outlines those steps

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Nico James-Bock: getting back to the buyer. Representation agreement. All agreements have to be in writing. All agreements have to have a start

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Nico James-Bock: and an expiry date. So the Start date for the Buy representation agreement is front and center as well as the expiry date.

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Nico James-Bock: The brokerage is named

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Nico James-Bock: as well as the designated representative. Prior to Tresa there was only one type of representation, and that was brokerage representation, where all of the members of the brokerage was all of the members were representing the interests of a client, and that could cause issues, as we will see when we discuss multiple representation.

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Nico James-Bock: so designated, representation was created in order to provide clarity. My brokerage by default uses designated representation. So that is where the representative is named in the representation agreement, and that representative provides the services and representation to the client.

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Nico James-Bock: The brokerage provides simply the services.

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Nico James-Bock: There's also a provision that the buyer acknowledges that the representation agreement can be for a period of 6 months or longer, but they have to provide their initials, acknowledging that fact

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Nico James-Bock: as well as the Commission

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Nico James-Bock: currently in Ontario buyer. Representation is a by default, is a free service in the sense that the seller is the one responsible for handling, for paying the Commission to both the listing brokerage and the cooperating brokerage. So it's the responsibility of the seller. That is how most seller representation agreements

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Nico James-Bock: are worded and designed.

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Nico James-Bock: So the buyer representation agreement indicates what the designated representative is entitled to receive. So that's what this section explains. It explains that the designated representative is entitled to receive remuneration for the services rendered.

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Nico James-Bock: and gets that remuneration from the listing brokerage in the event that the listing brokerage is not providing the remuneration, then it is incumbent upon the buyer to provide that

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Nico James-Bock: payment, and that is explained during the process. So the buyer will then be responsible for paying for those services. This is the model that the Us. Has adopted. It hasn't been adopted in Canada, but, like most things, it's probably just a matter of time.

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Nico James-Bock: This is in preparation for that. But there are also circumstances in which the buyer may just be responsible for paying for services. For example, if a property is not listed and there is no commission agreement with the seller, then the buyer will take on the responsibility of paying the

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Nico James-Bock: the brokerage and the designated representative for brokering that sale.

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Nico James-Bock: With that purchase

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Nico James-Bock: as well, we go on to representation. So representation is fully explained, and it also introduces the concept of multiple representation. Multiple representation will be fully explained in its own episode. It requires a great deal of explanation to

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Nico James-Bock: make sure that it is clearly understood by buyers and sellers.

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Nico James-Bock: as well as referral of properties. So the buyer agrees that during the currency of the buyer representation agreement

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Nico James-Bock: the buyer will act in good faith and work exclusively with the brokerage for the purchase or lease of real property of the general description

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Nico James-Bock: indicated above. There is a section of the buyer representation agreement that describes the type of real estate that the buyer will be purchasing. The buyer agrees that during the currency of this agreement the buyer shall advise the brokerage immediately of any property of interest.

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Nico James-Bock: so the brokerage, the designated representative, will endeavor to locate the properties of interest for the buyer. The buyer, however, is free to do their own research, and any properties of interest shall be made immediately known to the designated representative, and then they will continue to do their duty to find out if it's an appropriate property

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Nico James-Bock: finder's fee, so the buyer acknowledges that their brokerage may be receiving a finder's fee reward or a referral incentive. So this just indicates that the buyer acknowledges that fact and is aware of it.

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Nico James-Bock: Consumer reports. The buyer is hereby notified that a consumer report containing credit and or personal information may be referred to in connection with this transaction. It's clearly stated that any and all information pertaining to the buyer's creditworthiness will be made available to the designated representative.

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Nico James-Bock: The following section includes the signatures of the parties involved, as well as a declaration of insurance of the registrant. All registrants have to have valid areas of admission insurance, and this section provides that declaration.

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Nico James-Bock: As I mentioned earlier, all representation agreements must be in writing. There are other agreements associated with the buying of real estate. This particular agreement the Buyer representation agreement is form 300 form 301 is the cancellation of a buyer representation agreement form 302 is the assignment of a buyer representation agreement.

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Nico James-Bock: There's also form 304, which is the suspension of a by representation agreement. All of these forms

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Nico James-Bock: must be in writing by all parties in order for them to take effect. There are others, but for the purposes of this particular explanation, we will limit it to the by representation agreement. And these most common forms.

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Nico James-Bock: if you do not have access to the a visual

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Nico James-Bock: explanation through Youtube. Because you're listening to this while driving or just walking or exercising.

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Nico James-Bock: I will provide a link. There is a link in the description in the show notes to the Youtube episode, where I go through all of the different sections of the representation agreement as well. My contact information is in the show notes you can reach out to me through

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Nico James-Bock: all of my social channels. That's it. For this episode of building wealth through real estate, brick by brick, Ciao Ciao.