Unrepresented Buyers and Referral Fees

New Form Pending: Disclosure to Sellers of Expected Remuneration (to be published before June 15) At the outset of your relationship with the seller, discuss how you will deal with potential unrepresented buyers. Explain that if you refer unrepresented buyers to another licensee, you may receive a referral fee from that
licensee.

That way, if the situation arises, you can say “remember when we talked about unrepresented buyers and referrals? I have been approached by an unrepresented buyer and I am going to refer the buyer to a licensee who has offered to pay me a referral fee.” By discussing the situation in advance, you’ll
help to prevent misunderstandings later on.

When you receive or anticipate receiving a referral fee you must promptly disclose the referral fee in writing – you can use the Council’s Disclosure of Remuneration form. Make sure you include:

– The source (who is paying the referral fee);
– The amount, or if the amount is unknown, the likely amount or method of calculation of the amount; and any other relevant facts related to the referral fee.

You must also disclose the referral fee each time you present an offer to your seller.

This ensures transparency, so the seller is fully informed about the remuneration you will receive based on each offer.

Disclosure to Unrepresented Parties Required

New Form Pending*: (to be published before June 15)

To help ensure consumers [not customers] can make informed decisions about whether to be represented by a licensee in a real estate transaction, licensees must make a new disclosure about unrepresented parties.

Before you can treat a consumer as an unrepresented party in a real estate transaction, you will need to:

Inform the consumer of the risks of being unrepresented in a real estate transaction;

is close the limits to the services a licensee can provide to an unrepresented
party; and,

Advise the consumer to seek independent professional advice.

*You will need to use a mandatory Council-approved form for this disclosure. The Council is currently developing the form it will be made available before the new rules come into effect.

Material Information: You must share “all known material information respecting the real estate services, and the real estate and the trade in real estate to which the services relate” with your clients.

So what is material information? A material fact is anything that could affect a buyer’s decision to buy, or a seller’s decision to sell. In other words, you need to tell your client any facts that could cause a reasonable person to make a different decision about the transaction. And you need to make sure that you’ve made reasonable efforts to gather material information.

Listing agents can use the Council’s as a guide to help ensure they collect all the relevant Listing Checklist information about a property. Buyer’s agents should verify all listing information – particularly any information that is important to their client.