Under TRESA, we have the same mandatory disclosures in respect to competing offers.
- The number of competing offers,
- If the Listing Brokerage acts for one of the prospective Buyers, and
- If a commission arrangement might affect the decision to accept an Offer.
No significant changes here. The number is still the number. If an Offer expires, it is to be deducted from the count. With TRESA, that might mean sharing all irrevocable times. That would work. Alternatively, once it expires, it is simply eliminated from the overall total. That would work as well.
Brokerage Multiple Clients
This used to be a Buyer who was either a Client or a Customer. Now that customers under TRESA are gone, it’s just Clients.
However, be careful Customers can run until 30 March 2024. So, count them just like Clients in the meantime.
Here’s the relevant regulation:
“23.(4) If a brokerage has entered into a representation agreement with a seller and an agreement between the brokerage and the seller contains terms that relate to remuneration and those terms may affect whether an offer to buy is accepted, the brokerage shall disclose the existence of and the details of those terms to any person who makes a written offer to buy as soon as possible after the offer is made and before any offer is accepted.”
The key words here are “may affect”. It doesn’t say “reduce” which is the common understanding. That’s actually the most likely situation. There are actually a couple of additional examples.
The self-represented party cannot receive the cooperating commission offered. The total commission remains the same ie. 5% and while it was 2.5% -2.5%, it’s now 5% for the Listing Brokerage. Essentially, that means that the Listing Brokerage may very well be cheering for the self-represented party, since they make double the commission.
The actual Listing agent felt that they should not have a multiple representation situation. So, they referred out (subject to a referral fee) all the potential Buyers who attended the Open House. One of them, now wants to place an Offer. In this situation, The Listing Brokerage will be receiving a 25% referral fee. Again, the Listing Brokerage will be cheering for this Buyer over others, since they will make a higher commission.
This is the summary:
- Reduction of commission overall, if Brokerage represents Buyer
- A Cooperating Brokerage waiving commission
- A Cooperating Brokerage reducing its commission entitlement
- A self-represented party who cannot receive commission
- Entitlement to a referral fee from a Buyer’s Brokerage
Brian Madigan LL.B., Broker