experts: real estate column Tuesday, November 29, 2005

Buyers are entitled to know what we're paid

There are no exceptions. If they ask, we must tell.

By Marty Douglas

As published in REM - independent news and opinion for Canada's real estate industry.

Some people are just thick. Unfortunately, I can't require a certain level of comprehension in my readers, but I'm always optimistic. I continue to write columns to the broad spectrum of readers rather than the focused interest group. But every now and then the shallow end of the gene pool gets a copy and because of their agenda, misinterprets the written word.

Case in point: my July column on disclosure hit a nerve with the anonymous emailer I quoted. The column was titled "Ever heard of agency disclosure?" and his email began, "Yes, I have! Have you?"

He then questioned whether I had disclosed to the REM editor that I was earning a fee by using his "contribution." This seems a strange question, considering most editors proofread before printing. Then he asked for a referral. I'm going to give him the entire fee I receive from REM for every article in which his anonymous rants appear. Seems only fair to reward my muse.

Just one problem - but I'll let you figure that out for yourselves.

He then claimed to have asked the Real Estate Council of B.C. about disclosure and indicated their response implied "that it's only the 'EXTRA' income beyond our contracted fee with our seller that we must declare - not as you just put it in your article, and what we were first led to believe, that all fees are to be declared to everyone. That then makes sense! Your misleading info, as from the others, doesn't!"

Here's what I said: "Licensees must disclose to the buyer, among other things, the amount of commission we will earn." And further on in the column, "...one of the other disclosures necessary is for any remuneration earned indirectly from the transaction. In other words, the reward points from the mortgage broker or the referral from the Realtor in Alberta where we sent the client after the deal in B.C. had closed."

Let me put it in simple terms. Our buyer is entitled to know how much we will be paid. Not "only the extra," because that would imply there existed a standard commission each buyer knew about. There are no exceptions. If they ask, we must tell. The seller, having signed the listing contract, presumably knows how much we will be paid. But if, for example, a buyer offers the listing salesperson a reward if their offer is successful on that salesperson's listing, ya gotta disclose to the seller. Even if you don't take the reward! There is another option and that is to avoid dual agency. If they aren't your client, they are entitled to honest and fair dealing and that doesn't include telling them how much the seller is paying you.

In the August issue of REM, my long-time colleague and friend Jim McCaughin outlined his passion for contracted buyer agency. (If you didn't read it, go to www.remonline.com and have a peek. If you have never visited REM's site, this is as good a time as any talk about your research goldmine!) If we ever progress to Jim's position, (once known as the Pat Moore position), then all misunderstanding about disclosure of remuneration should cease, because it will be in black and white on both sides of the transaction, as it should be. Because I always like to leave a session with a point to ponder, here's a little something for people of 'roomy girth'. It appeared as a sign in an aquatic centre.

"If swimming is so good for your figure explain whales."

Marty Douglas is the sales manager for Coast Realty Group (Comox Valley) Ltd., one of nine Coast Realty Group offices on Vancouver Island. He is a past chair of the Real Estate Errors and Omissions Corporation of B.C., the Real Estate Council of B.C., the B.C. Real Estate Association and the Vancouver Island Real Estate Board. 1 800 715 3999; fax 250 897 3933. Email mdouglas@island.net.




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Recent Articles by this columnist:

Surviving in a slower market
Wednesday, December 19, 2012


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Thank you, FINTRAC
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A Snapshot of Alberta
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All articles by Marty Douglas

Related Links:

Marty Douglas

REM

Real Estate Council of B.C.

Related Articles:

Ever Heard of Agency Disclosure?



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