Is Buyer Broker Agency designed to tie up the public?
I’m not so sure the BBA is about loyalty per se. There have been many discussions about why the Real Estate Council of Ontario insists agents have a buyer broker contract in place. They will not adjudicate a controversy if there is no BBA in place, yet we all know the public cannot be “forced” to sign. Is this a contradiction?
Contrary to people who don’t want to talk about commissions, part of the contract IS about “getting paid.” HOW doesn’t matter, for sake of discussion; but the “how” should be spelled out in the contract, in fact MUST be spelled out in detail, and understood by all involved.
Carolyne Lederer
All parties who are doing the “hiring” must sign the BBA contract, not just one member of a family. The public needs to understand that if they are “under contract” with a BBA in place, they could become liable for paying the commission under certain situations, not the least of which is if they forget they signed a contract and go off to buy a house with another agent, failing to say they are already under contract with another agent. The first agent can and often does claim the right to be paid, and in court usually wins.
The concept of having a BBA in place is not to tie up members of the public wishing to purchase a property. Although it would be easy to think so, based on how some of the BBA contracts are arrived at.
The BBA is merely “confirmation” that the one doing the work will be paid, remunerated for services – eventually, typically at time of closing. There have been innumerable commentaries in the industry that seem to indicate that Realtors are committing an abominable sin by reinforcing the concept that they “deserve” to be paid.
How much? Who cares? I, for one, don’t care how much agents get paid. That topic is between them and their client. It is, simply put, no one else’s business. Period. But how the Realtor gets paid IS tied to those BBA papers. And, by signing a BBA, a contractual relationship has been formed: agency, fiduciary duty, privacy, as well as the standard duty of care, applies. Is the buyer a client or a customer? But that question goes to the root of “Representation.” (Perhaps read my articles on my website: Are You Represented? and Commissioning an Agent.)
Aside from all the rules and regs and differentiations associated with BBA, in the end it is NOT about buying or selling “loyalty,” not at all, but merely a confirmation of the facts involved, only one of which is how, and how much, the Realtor will process as commission “through the brokerage” he works for. Some brokerages, within their own corporate structure, dictate what commission structure completes the BBA; others let the agent decide.
Just because he is an independent contractor does NOT mean an agent doesn’t “work for” a company. “Independent contractor status” is purely an accounting term. The Realtor “represents” the brokerage, always, and “through that affiliation,” he (the firm) represents the public. An agent cannot work for more than one company at a time. Ultimately his brokerage assumes ALL responsibilities for his actions, even when he is an independent contractor.
Therefore, anyone “hired” by any brokerage, is deemed to “represent” that company, both in and out of the office. YOU, as an agent, represent “the company;” the COMPANY represents the public. It’s not that the agent’s personal life is owned by the company that signs the paycheques, but by virtue of who is shown as the brokerage and the broker of record, the agent does owe the corporation more than loyalty. Back to contractual “agency” defined again.
The agent is the conduit between the brokerage, the public, and yes, the governing bodies. You can’t get away from it. It follows you wherever you go. When an agent signs on to wear the yellow jacket or sport the red white and blue, or the green and white flags, they need to realize they are swearing an allegiance to perform “in the name of the company.”
As a member of the public: If you don’t want a representative to work with/for you, exclusively, that is perfectly fine. You will choose to have “one” work for/with you when that “meeting of the minds” happens; you will choose the Realtor you are most comfortable with. Then, if not before, the agent might insist you sign a BBA, otherwise his company might choose not to pay him.
If you are NOT comfortable, don’t sign on the dotted line, not ever. Not before, not by being coerced by some risqué Realtor and his/her creative website that insists even before you meet to discuss business, that you must sign a contract. Think of the BBA as a listing contract, in reverse. The contract, simply put, says the agent is working FOR the buyer, not for the seller.
Does the public really expect Realtors to do all the work and not get paid? Has anyone polled this topic amongst the public in their trading area? I think CREA has done various polls over the years, as has NAR, I believe, attesting to the “value” a Realtor brings to the table. But has anybody asked the question: Do you think your Realtor deserves what he/she was paid?
I don’t know that this question has been put out there. Answers would vary. Sometimes the public wants to blame the Realtor, saying they were “forced” to pay too much, or likewise, “forced” to accept a price too low for their place. Let’s get this straight once and for all. Realtors do not “force” people to do ANYTHING. We are dealing with adults, who make their own decisions before signing on the bottom line. A change in pricing does not necessarily equate to a higher paycheque, and if it does, the differential is so small as to not be worth discussing. Do the math.
There are so many wonderful Realtors out there, and so much attention is being drawn to the negative side of our industry by the opportunity to “just post a (mere) listing” with no specific information, on MLS; yet the Realtor who “posts” still bears the full responsibilities – believe it or not, even some Realtors don’t know that. And this topic, complete with new rules and regulations got really messy, thanks to the input from the people at the Competition Bureau, none of whom, to the best of our knowledge, are/were Realtors.
Carolyne Lederer
Broker of Record
Carolyne Realty Corp.
Brampton, Ont.
