TRESA: Hold onto that SRP Badge!

You are a real estate agent and you are looking to increase your business. You host an Open House for your client at 123 Main Street.

Along comes Jeff, and he likes the house but says that it is a little too small. What can you do? It’s your only Listing. But, you do know that there is another house, 456 Dunburn Avenue, two blocks away, located in the interior of the subdivision backing onto a park. It’s bigger, and is $75,000.00 more expensive than yours. It’s listed by another Brokerage. Can you show it?

Some people would say “no”. You can only show the property to Jeff if you sign him up under a Buyer Representation Agreement. Is that true? Does that make any sense?

TRESA Procedure for Signing Up a Buyer as a Client

There are a few steps:

1. Determine whether Jeff is represented with another real estate agent,
2. Explain agency,
3. Produce the RECO Information Guide,
4. Get Jeff to sign it,
5. Produce the Working with a Realtor document from OREA (WWR),
6. Get Jeff to sign it,
7. Explain agency a second time,
8. Produce the Buyer Representation Agreement from OREA (BRA),
9. Get Jeff to sign it.

Now, of course, you can show Jeff 456 Dunburn Avenue. Those were the steps. It all works!

However, Jeff is reluctant to sign up. You would like to show him the property, so that he can determine:

• Whether he likes the property, and
• Whether he likes you.

Why not take some steps to show off your capabilities, your knowledge and your skills? Let Jeff see you in action! If it all works out well, he will sign a BRA and submit an Offer on the property.

The SRP Badge

In your briefcase, you are carrying around a number of SRP badges. They say “Self-represented party”. If you hand one to Jeff to have a look at, that’s OK, but, if he pins it on his shirt, “you’re done”. It’s over! You have crossed the limit. You can’t show him the property according to RECO and OREA. You might be charged with a disciplinary offence and have to pay a $50,000.00 fine. Your Brokerage might have to pay a $100,000.00 fine for not educating you about this.

The Remedy

This is very simple. Keep the Badges in your briefcase until after you have showed the property! Don’t hand them out too soon! If Jeff says he wants a Badge, then, you’re stuck.

TRESA Representation

There are only two categories dealing with a trade in real estate:

• Represented
• Not Represented

Let’s not get that far where we have to make a decision. Let’s just pause for a moment.

Right now, there’s no trade on the table.

So, who’s Jeff?

Consumer: Uncommitted, undetermined, undecided

Jeff is that person in the store who says to the clerk: “just looking”. He hasn’t made any decisions, He’s not a “buyer”. He’s uncommitted, undetermined and undecided. He’s a potential consumer, but he’s not there yet. So, you can show him stuff. If he likes you, maybe he will do business with you. Jeff is simply a “prospect” for future business.

Show the Property

Go ahead and show the property to Jeff and at the end of the showing you might inquire whether he’s interested in this particular property?

Jeff says “no”

Then, ask him if you can send him some future Listings.

Jeff says “yes”

This is great news. Now, look at those steps above and get him to sign a BRA. Proceed to draft an Offer and get paid the cooperating commission.

No Man’s Country

Jeff said “no, not interested” and you like Jeff and would like to send him other Listings. Hopefully, you can build up a relationship with him and he will trust you, and place his confidence in you. As long as he doesn’t pull out that SRP Badge, you can continue to show him properties. Just a word of caution. He might decide to go to another real estate agent, so, you might never be paid for all your hard work. But, if you do continue, then you will see more properties, gain more market knowledge and possibly have a chance at making some money in the future.

Prospect’s Statements

There are really a number of things that Jeff might say before he’s ready to sign up:

• I’m just looking
• That’s a long Form, I’ll read it later
• I want my lawyer to read it first
• I’m not quite sure
• My next door neighbour is a real estate agent
• Not sure about this neighborhood
• I have to get my finances in order first

All of the above statements are great, because you can continue to show Jeff properties. Once he puts on the SRP Badge, that’s it. It’s over. He’s on his own!

Delaying the Determination

You have now showed Jeff three properties and are beginning to develop a good relationship with him. You take him to a coffee shop, and buy him a coffee and suggest that you line up four or five properties for next weekend to see. He’s in agreement to see them with you. You are cautious about the SRP Badge, so you say: “you should run all this information by your lawyer first before signing anything”. That’s good. That buys you some time. You have another week to show Jeff some properties and convince him, that you are the “one” to deal with.

Day of Reckoning

Naturally, there will come a day, when all of this is over. You need Jeff to decide, or you are never going to be paid any money. So, pull out the BRA and ask him how to spell his last name. He says: “B-E-Z-O-S” and he signs up. It took a while, but it was worth it. You were skillful in ensuring that you did not create “implied agency”, so the commencement of your fiduciary obligations now starts with the execution of the Buyer Representation Agreement.

Moral of the Story

Don’t hand out the SRP Badge too soon!

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com