REAL ESTATE SERVICE AGREEMENTS!
What are they and why am I required to sign one
just to view or sell a home?
As of January 1, 2022, it is now a requirement by law, in Manitoba, to have a Service Agreement signed and in place between a REALTOR® and a BUYER or SELLER, before any services can be provided to you! This LAW is administered by the MANITOBA SECURITIES COMMISSION and is formally called Bill C70 in the MANITOBA LEGISLATURE. Failure to comply with this LAW can result in fines, to the violating REALTOR® of up to $500,000.00!
The LAW States that before a REALTOR® can provide you any service, information, sending property listings, arranging viewings, providing market evaluations, opinion of value, advertising, or advising on pricing, etc. A Service Agreement must be prior signed and agreed to by all parties. NO EXCEPTIONS!
The goal of this SERVICE AGREEMENT is to assist buyers and sellers better understand the services REALTORS® have promised to provide YOU as a customer prior to engaging their service. REALTORS® can not provide you with any services without it. Its like driving without a licence.
HOW DOES A SERVICE AGREEMENT IMPACT ME AS A BUYER OR SELLER?
By signing a service agreement with a REALTOR® it authorizes that REALTOR® to provide you the service you require. It is not a contract for compensation, you are not obligated to pay anything to the REALTOR® for this service. All it does is give the REALTOR® permission to provide the service you are asking for.
DOES THIS AGREEMENT EXPIRE OR CAN I TERMINATE IT BEFORE EXPIRY DATE.
This agreement must have a commencement and termination date. You can terminate this agreement at any time, unless otherwise stated in the SERVICE AGREEMENT. If you terminate the agreement before the date of expiry, it must be clearly stated either in writing or by electronic communication.
WHAT WILL IT COST TO SIGN THE AGREEMENT?
IF YOU ARE A BUYER, there is NO COST to sign a Service Agreement, unless another arrangement has been agreed upon.
IF YOU ARE A SELLER, there is NO COST to sign a Service Agreement. The only time there is a cost to a SELLER is after a SELLER signs a LISTING AGREEMENT that outlines the commissions to be paid for selling the home. However, payment only occurs after the sale is finalized, or whatever arrangement for remuneration has been agreed upon in the LISTING AGREEMENT.
WHAT IF I DO NOT FEEL COMFORTABLE SIGNING A SERVICE AGREEMENT?
Unfortunately, if you do not feel comfortable signing a SERVICE AGREEMENT the REALTOR® can not provide you any service, be it buying or selling.
WHAT IF I DO NOT WANT TO COMMIT WITH ONE REALTOR?
The Service Agreement is NOT an “Exclusive Agreement”. “Not Exclusive” means you can sign a Service Agreement with more than one REALTOR® and you can choose the length of time for it to be valid. It can be as short or long as you both agree upon. However, you both must agree, and it must be in writing with an expiration date.
What is the difference between Exclusive and Not Exclusive Agreement? A good example of Exclusive is when you are a Seller and sign an Exclusive Listing Agreement (MLS) or if you are a Buyer and sign a Exclusive Buyer Agency Agreement. Exclusive means you are under contract with one REALTOR®. You are “Exclusive” as a client to that one REALTOR® representing YOU! Not Exclusive means you are not under contract, and you can deal with multiple REALTORS®. Hence why you are not under contract when you sign a Service Agreement. All a Service Agreement does is authorize a REALTOR to perform a service before a sale is made.
For more clarity about the difference with Listing Agreements or Buyer Agency Agreements and Service Agreements should be discussed with your REALTOR®.
WHAT ARE THE BENEFITS OF HAVING MULTIPLE SERVICE AGREEMENTS?
If you are a SELLER, you may sign more than one Service Agreements with multiple REALTORS® so you may receive multiple Home Market Evaluations to determine the value of your home or to find the best REALTOR® to represent you in the sale.
For a BUYER – you may sign multiple Service Agreements if you are “just looking” and not serious about buying a home just yet OR you have not found the “Right REALTOR®” to represent you. (Caution when contacting a REALTOR® who is advertising a home for sale)! The LISTING REALTOR® is not obligated to show you a home and may not sign a SERVICE AGREEMENT with you.
The LISTING REALTOR® is under contract “exclusively” with the SELLER OR may NOT be authorized by the SELLER to show you the home.
WHY THEN AM I NOT REQUIRED TO SIGN A SERVICE AGREEMENT AT AN OPEN HOUSE?
Because, under the Exclusive Listing Contract with the SELLER, the LISTING REALTOR® has already signed a Service Agreement authorizing them to allow public customers attend a “PUBLIC” OPEN HOUSE.
If the SELLER does NOT AGREE to having a “PUBLIC” OPEN HOUSE, then a BUYER must sign a SERVICE AGREEMENT with a REALTOR® to view it “PRIVATELY” with a REALTOR® of their choice.
If you call the LISTING AGENT to schedule a viewing and they are not willing to show you their listing, its because they may not be authorized to do so.
If you are viewing a private sale, Service Agreements do not apply!
For more details on SERVICE AGREEMENTS, you can search MANITOBA REAL ESTATE SERVICE AGREEENTS on the internet or search MANITOBA BILL C70 - REAL ESTATE SERVICE ACT (RESA).
This NEW law (January 1, 2022) may be a little confusing, if you are in the market to buy or sell a home, feel free to call me, I am here to help!
Tony Rinella – B.A. Urban Studies
Ethos Realty
755 Osborne Street
Winnipeg, MB. R3L 2C4
204-771-3866 Call or Text
www.tonyrinella.com
#serviceagreements
#RealEstateServiceAct
#RealEstateServiceAgreement
