NEWS FLASH!!
Scuttlebutt Bungalow
SURPRISING NEWS
From Professional
Real Estate Broker
Peter Sisco
I’VE Been
GAGGED!
You Need to Know This
As of December 1, 2023
Peter Sisco
We Can’t Advise You
Red Door Brokers
AT ALL IF YOU
are a “SELF-REPRESENTED PARTY” (SRP)! What the heck is THAT?? WELL, If YOU are INVOLVED in a real estate TRANSACTION, and are NOT A CLIENT of a real estate brokerage, YOU ARE NOW considered to be a SELF-REPRESENTED PARTY.
LET ME EXPLAIN!
There have been some changes to the Provincial government legislation that regulates the Real Estate business. These changes modify what’s now known as the “Trust in Real Estate Services Act, of 2002.” The acronym is “TRESA”! RELAX FOLKS!! I’m definitely not going to bore you with any of the mind numbing government legislative double speak. But, if you are so inclined I’ll be happy to send you a copy of the “Act”.
I WILL SAY THIS. There are some VERY GOOD aspects to the revisions which will increase transparency and clarity in the buy/sell process. In future “Scuttlebutt Bungalow” editions I plan to address these benefits.
BUT, in today’s Scuttlebutt publication I want to focus you AND the Government of Ontario on some potentially UNINTENDED CONSEQUENCES of the “Act” that could cause serious financial harm to those that choose to buy or sell property ‘unaided’ without the expertise of a real estate professional!
Let me give you an illustration to legitimize my sincere concerns!
Suppose you hire me to sell your house! IF SO, we have a signed “Representation Agreement”, and You are MY client! I am NOW obligated under the Provincial Statute to act in your best interests. This means I’ll advise you in regards to the appropriate “listing price”; I will recommend financial conditions to be attached to the listing; I may suggest upgrades to your house to improve its competitive advantage …
I will use my skill and judgement to prepare a professional marketing strategy highlighting your homes greatest features and amenities and MUCH MORE! WHY? So, I can sell your house as quickly as feasible at the best price possible given the current market’s conditions. Okay are you with me so far? Good!
Now, in the normal course of business someone will make an offer to buy your house. Typically, it will be the buyer’s agent, their representative, who will interact directly with me, on their ‘client’s behalf. As YOUR professional representative I will enter into negotiations with the other party’s agent. What normally ensues is a back and forth discourse between two equally qualified; equally knowledgeable agents, each representing their clients best interests; each taking the offer and the counter offer to their clients and advising them as to their options!
In time, there is a ‘meeting of the minds’ and the deal is done! The sales process works this way TODAY and it has worked successfully this way for decades!
This system works BECAUSE each side in the sale is equally represented. Both “parties” are ‘clients’ of registered Real Estate agents! Let’s call it a fair heavyweight fight! It’s like Ali vs. Foreman! In the end the bout will be settled in a fair competition.
But now, INCREDIBLY, appearing under “TRESA”, there’s a “NEW KIND” of PARITICPANT! The” “SELF-REPRESENTED PARTY”, “SRP”- the aforementioned “unattached” INDIVIDUAL, who has chosen to act without a professional REALTOR to buy or sell properties worth MILLIONS OF DOLLARS, OR MORE!
SO, WHAT’S that got to do with ME? PLENTY! Here’s my concern for YOU!
Virtually ANYONE can qualify as an SRP. Sign THE DISCLOSURE, — acknowledge the risks, then go to it! REMEMBER there’s at least TWO parties involved in any REAL ESTATE TRANSACTION—NOT just the SRP. With that in mind, name any other profession in Canada where it’s legal for SOMEBODY to sign a form of agency, then, begin putting OTHER people at risk. Can DOCTORS do this? Stock brokers? Electricians? Policemen? Then WHY do we NOW allow SRPs to do this?
WANT more? Here’s MORE!
Yes it’s TRUE the SRP (buyer / seller) is solely responsible for his or her outcome. BUT, it seems to me the Government has completely NEGLECTED to consider the SRP’s impact on MY CLIENTS OUTCOMES!
You might say the Government has set the bar too low regarding SRPs! I’d suggest the Government has removed the “bar” ALL-TOGETHER! A complete RETHINK is required!
NOW, here’s the BOMBSHELL! I cannot help this “SELF-REPRESENTED PARTY”! Under the new law, I am GAGGED! Not only me—but every Real Estate agent in Ontario is GAGGED too, because of the changes in the TRESA law.
In the plainest of English … Here’s the RUB!
For SRP’S dealing with a REGISTERED AGENT the SRP must understand that the REALTOR’s allegiance is solely to his/her client! When an SRP makes a mistake on an offer … doesn’t matter how big it is. If it isn’t in my Client’s interest to fix it, I am not allowed to say a word.
Even if it’s a mistake that could change the SRP’s life.
Folks, Real Estate has become a very complicated business. Even experienced Agents
Need to check and recheck, to make sure all is right.
Returning to our ALI vs. Foreman heavyweight boxing metaphor—whenever an SRP contests a property deal with a professional Realtor, the expected outcome would be like George Foreman vs. the wimp, Deputy Barney Fife. It will not end well for the SRP.
Without the benefit of Divine intervention, the chances of an SRP out-negotiating a professional Real Estate Agent are essentially slim or none. But the downside could be financially epic for the Self-represented party and my client given the variability of the SRPs. WE don’t know anything about them … Am I going to treat SRP’s different than
Clients of Brokerages, ABSOLUTELY!!! I don’t know who I am talking to, and there is no Agent on the other side with a License to lose if “all is not as it appeared to be”.
This is just one of the ‘UNINTENDED CONSEQUENCES’ that not only concerns me—it grieves me! Why? Here’s WHY! First, I have great respect for the colleagues I work with and the professionals I compete with!
For decades our industry has worked hard to elevate the public’s view of Real Estate. A significant step was establishing the REAL ESTATE COUNCIL of ONTARIO, or RECO! RECO is THE-Regulatory Body, which governs the conduct and professionalism of every Real Estate Agent in Ontario!
SO WHAT—YOU MAY SAY!
WELL, here’s WHY this is so fundamental. First, every person who becomes an Agent must abide by RECO’s strict code of ethics! Any Agent who violates the Code could lose their license! CONSIDER THIS–In order to become an Agent it’s necessary to invest the time and money to study AND graduate from RECOs college level Real Estate courses. Then, to maintain your license there are hours annually of obligatory continuing education. Finally, to professionally practice as a REALTOR it is compulsory to carry and also to maintain the minimum dollar amount of Malpractice Insurance! Plus the Agent must prove this to RECO.
OKAY, here’s why I’m losing sleep! ANY “SELF-REPRESENTED PARTY”—any SRP—is NOT required to do any of these things. They have NO requisite code of ethics—they have NO educational requirements—there is NO mandatory malpractice insurance—essentially they are wild cards! DO YOU see the GIGANTIC POTENTIALITY for disaster?
When you combine the many complexities in the Real Estate business with uninformed, inexperienced “do-it-your-selfers, it becomes a tragic recipe for injury and lawsuits! Why? Because EVERYTHING related to Real Estate that is second nature to me, or any professional, are virtually unknown to the SRP.
Things as simple as preparing a proper ‘offer to PURCHASE’ with all its necessary component parts —OR—much more convoluted matters like zoning, building permits, inspection, financial ‘closing’ issues—these and many other intricate facets may be beyond the scope of the “SRPs” capacity.
PLEASE KNOW THIS: IF YOU ARE MY CLIENT—NOW I ALSO I NEED TO PROTECT YOU FROM “SRPs”—AN UNEXPECTED DANGER CREATED BY PROVINCIAL GOVERNMENT!
Based on the potential harm that could affect so many people I seriously recommend that our Provincial Government reassess their position regarding SELF-REPRESENTED PARTIES”. I urge the Powers-that-Be to require every SRP to pass a competency test— follow the same ethical standard AS Registered Agents–and secure Malpractice insurance so MY CLIENTS are not EXPOSED to an SRPs incompetence! Do you agree?
Thank you to all of our Red Door friends and clients. If there are any questions or concerns about this edition of “Scuttlebutt Bungalow” OR any questions regarding any aspect of Real Estate call or text me day or night. 519-902-3214
Remember we stand by our clients; YOU can be confident that Red Door Realty will be here to expertly guide you in the purchase or sale of your home!
Kindest regards, PETER SISCO.
Red Door—will get done—what you need—to get done!
I’m just a phone call or a text away…519-902-3214!