Frequently Asked Questions | www.rebgv.org

We hope you are happy with the services of your REALTOR®. If you aren’t, we urge you to file a complaint. Here’s what we suggest you do.

For serious misconduct

If you think your Realtor hasn’t conducted themselves properly, please contact the Real Estate Council of BC. Council is the government’s regulator of the real estate industry. Its mandate is to protect home buyers and sellers in BC, and deal with complaints made against Realtors.

We want to make sure our Realtors meet not only their statutory obligations, but also the ethical standards laid down in the REALTOR® Code of Ethics.

However, Council requires consumer complaints first be made to it. If Council investigates your complaint and finds wrongdoing by our member, we will be notified. A Realtor who is in breach of Council requirements and/or the law may be subject to an additional investigation and sanction by us.

File a complaint to the Council here.

For minor issues

If you have a service-quality or relationship concern with your Realtor, you may wish to contact their managing broker to ask for resolution. Managing brokers are responsible for actions of Realtors under their supervision. You can reach the managing broker by telephoning their brokerage.

For compensation

The Real Estate Board of Greater Vancouver doesn’t have the power to grant compensation. If you’re seeking monetary compensation, please contact your Realtor’s managing broker, small claims court, or a lawyer.

Find more information on small claims court here.

For complaints between Realtors

The Real Estate Board of Greater Vancouver is the professional organization that represents and provides services to Realtors in Metro Vancouver. Members are obligated to report potential wrongdoing by their colleagues to us. Complaints of this nature are made directly by members to the Board’s Professional Standards Department.

 

 

What is the REALTOR® Code of Ethics?

REALTORS® are subject to the REALTOR® Code of Ethics.

Real Estate Board of Greater Vancouver members have been subject to the Code of Ethics since the Board was established in 1919. This Code, amended and updated a multitude of times since, reflects the values for which REALTORS® stand:

 • Absolute honesty and integrity
 • Cooperation with and fairness to all
 • Professional competent service
 • The Golden Rule

Standards of Business Practice

Appended to the Code of Ethics is the Code’s Standards of Business Practice. Its 28 articles describe the expected standards to be met by them in their professional capacity as REALTORS®. The Code does not regulate REALTORS® in their private lives. The Standards of Business Practice deals with client-agent relationships, due diligence investigations, professional competence and courtesy, respecting agency relationships and supporting the profession’s various organizations.

The Standards of Business Practice has a lot to say about professional standards including the obligation of REALTORS® to:

• be informed of essential facts about relevant legislation, standards, the real estate market, the contents of standard forms and the obligation to update professional knowledge through the taking of continuing education courses;

  • describe the nature of (or the lack of) agency representation being provided to the client or customer; the obligation to follow clients’ lawful instructions; act in the clients’ best interests, keep their confidences and disclose all material facts. The obligation to follow a client’s instructions does not allow them to mislead other parties and does not include accepting client instructions that would require REALTORS® to breach professional standards.

  • take reasonable skill and care to discover facts about properties so as not to misrepresent them;

  • put agency contracts (e.g. listings and buyer agency agreements) and contracts of purchase and sale in writing while ensuring that these contracts accurately reflect the agreement of the parties in a clear and legible form;

  • disclose all benefits being received (or those that are anticipated to be received) by the REALTOR® to clients and customers;

  • accurately account for all monies and valuables entrusted to the REALTOR® by the client;

  • recommend that clients take professional advice from third parties when the REALTOR® cannot provide the information clients require;

  • promptly disclose in writing and on the required form that the REALTOR® is buying, selling or attempting to buy or sell (directly, or indirectly) an interest in property;

  • provide a skilled and conscientious service to clients and customers that reasonably conforms to the expected professional standard;

  • meet or exceed professional advertising standards including providing accurate information; making clear and supported claims, specifically noting any significant exceptions to offers or inducements and not misleading the public;

  • meet all Human Rights legislation and general obligations and not to discriminate (or accept instructions to discriminate) against any member of a protected class of individuals;

  • comply (and cooperate with) their Board or Association’s bylaws and professional standards;

• meet or exceed any statutory requirements relevant to their professional services including, for example, the Competition Act;

• vigorously compete with other REALTORS® for business but not to publicly discredit another REALTOR® or brokerage;

  • respect other REALTORS®’ agency contracts;

  • place professional or financial disputes before their Board’s Professional Conduct or Arbitration Committee;

  • respect websites’ terms of use; trademarks and the intellectual ownership rights of others.

Please note

Notwithstanding that the REALTOR® Code of Ethics and Standards of Business Practice regulate how REALTORS® must conduct themselves; it does not regulate:

 • civility, courtesy, the type or quality of the services provided
 • the fees or commissions that REALTORS® freely negotiate with their clients.

These issues and the relationship challenges that often go with them are within the sole discretion of the brokerage and managing broker to resolve with the client.

Contractual disputes, claims for money and/or demands to be released from a listing or buyer agency contract can only be resolved in court if the parties are not been able to resolve them directly.

The Board cannot require REALTORS® to pay compensation to claimants; to vary their agency contracts or require that the parties meet their obligations in a real estate contract.

 

Can you explain sellers’ and buyers’ contractual obligations?

Buyers and sellers with signed contracts that are legally binding have many contractual obligations. Here are a few examples.

Included items

The standard form, Contract of Purchase and Sale, contains this clause:
“The Purchase Price includes any buildings, improvements, fixtures, appurtenances and attachments thereto, and all blinds, awnings, screen doors and windows, curtain rods, tracks and valances, fixed mirrors, fixed carpeting, electric, plumbing, heating and air conditioning fixtures and all appurtenances and attachments thereto as viewed by the Buyer on the date of inspection...” (Clause 7: Included items).

The contract provides a space for additional items that are to be included or excluded, for example, washing and drying machines, curtains or even a stone garden bench.

If you are a buyer, and you have specified items that you want to be included in the contract and if these items have been removed when you take possession of your home, then talk to your REALTOR® and/or your lawyer as to whether the seller has breached Clause 7 of the contract.

Property condition

The standard form Contract of Purchase and Sale contains this clause:
“The Property and all included items will be in substantially the same condition at the Possession Date as when viewed by the Buyer...” (Clause 8: Viewed).

If the property’s condition is different when you take possession of your property, talk to your REALTOR® and/or your lawyer as to whether the seller has breached Clause 8 of the contract.

Other commitments

Buyers may impose a specific obligation on the seller, for example, to make repairs or to clean the property prior to the closing. Examples could include shampooing carpets, power washing the driveway, removing garbage and unwanted items, cutting lawns, and repairing fences.

Sellers (and buyers) are obligated to keep their contractual commitments. If a contractual commitment has been breached, consider talking to your REALTOR® and/or your lawyer as to your options.

Your REALTOR® and his/her brokerage may be able to help resolve this complaint by contacting the other party’s REALTOR® or brokerage to ask for assistance or to communicate your concerns.

Note: Your REALTOR® cannot force the other party to do what they said they would do in the contract. For this, you need the assistance of a lawyer or the Courts.

Subject to clauses

Buyers may wish to make “subject to” offers for example; subject to the buyer being able to obtain financing; subject to an inspection of the property and/or subject to legal advice. Sellers can accept an offer subject to the seller being able to find another suitable property within a specified period of time or subject to legal or financial advice. The parties must act in good faith and are expected to make reasonable efforts to satisfy and remove subject clauses from the agreement.

Note: A subject clause is not necessarily an “escape clause.” If the other contracting party does not believe you have made an effort to satisfy the subject clause he/she may consider that you have breached your contractual obligations.

Deposits

Deposits are most commonly held in trust by the buyer’s REALTOR®’s brokerage. Once deposit monies have been placed in the brokerage trust account they can only be removed from the trust account with the written approval of the buyer and seller. If the parties cannot agree, the real estate brokerage may pay the monies into court pending legal action that the parties may choose to take.

 

 

Can I cancel a listing contract, a buyer agency or an exclusive agency contract?

Contracts can only be cancelled with the mutual consent of the parties.

In BC, Realtors use standard form real estate contracts. The wording and terms of these contracts have been prepared by BC lawyers and have been tested in Canadian courts. Multiple Listing, Buyer Agency and Exclusive Listing contracts are made between the real estate brokerage (often referred to as “the agency”) and the client (the seller or buyer.)

Realtors work within a legal relationship called designated agency. This relationship exists between you, the principal and your Realtor. (The brokerage for which your Realtor works is the contracting party, but is not your agent.) The essence of the agency relationship is that the Realtor has the authority to represent you in dealings with others. Note that while the Realtor may be your designated agent, the managing broker is the representative of the brokerage and is therefore responsible for the actions of his/her Realtors.

*It is also possible for a Realtor to assist you as an “unrepresented party.” A Realtor who represents you in this way is not your agent and has no fiduciary duties to you.

A Realtor assisting you in this type of relationship can, for example:

  • Explain real estate terms, practices and forms;
  • Assist in screening or viewing properties;
  • Prepare and present all offers and counter-offers at your direction;
  • Inform you of lenders and their policies;
  • Identify and estimate costs involved in a transaction. 

If you have signed a standard form:

  • Multiple Listing Contract;
  • an Exclusive Buyer Agency Contract; or
  • an Exclusive Listing Contract; and you wish to cancel the contract early, you may be able to do so, but only if the other party to the contract (your Realtor’s company) agrees. If you have a concern here is what you should do:
      1. Discuss your concerns directly with your Realtor and ask for a resolution of the issues that are bothering you. Keep written notes and make your instructions in writing.
      2. If your concerns are not addressed, contact your Realtor’s managing broker to ask for assistance. Make meeting requests in writing and advise the managing broker why you want to see him/her in advance.
      3. If your concerns are not resolved, contact your lawyer to discuss your options. 
      4. The Real Estate Board cannot unilaterally cancel your listing or buyer agency contract. It can assist you with problems or disputes by contacting your Realtor’s managing broker to make him/her aware of your concerns.

The Real Estate Board is not empowered to regulate members’ commissions/fees, service levels, services provided or their civility to you. Please contact your Realtor’s managing broker if you have a concern in these areas.

It is a breach of the REALTOR® Code of Ethics for a Realtor:

  • to suggest to a potential client that another Realtor’s listing or buyer agency contract should be cancelled early, or to suggest that another member’s contract should be unconditionally released; or
  • to make direct contact with other Realtor’s client(s) if they do not have advance permission from their colleagues; and
  • to publicly discredit another Realtor or brokerage.

 

What is an Offer to Purchase?

When you decide to buy a property, your Realtor will prepare what is known as an Offer to Purchase. The standard form used for this is called the Contract of Purchase and Sale. Once accepted by the parties it becomes the contract between the buyer and seller.

Verbal offers: it’s important to note that while any verbal communication about offers, counter-offers and acceptance of offers can be useful to the parties, in British Columbia; a contract dealing with land is not enforceable against the parties unless it has been made in writing and properly signed by all parties to the contract. If you do not have a written contract, agreed to by all the parties, then you do not have an enforceable real estate contract.

An offer to purchase contains the date of your offer, the description of the property you are making the offer on, the amount of your deposit, the amount you are offering (based on data provided by your Realtor, the amount you intend as your down payment and financing details, as well as your name and address and the name and address of the owner of the property you want to buy, subject-to clauses, closing dates, and any special requirements you want to impose on sellers (for example, you want the kitchen appliances.).

If your Realtor® is your agent, s/he can advise you every step of the way when you make an Offer to Purchase. If your Realtor is not giving you agency representation s/he cannot give you advice nor reveal confidential information about any clients they might have. But they can, for example, explain the standard forms you will be asked to sign.

Once your offer has been prepared and you have signed it, it will be presented to the seller without delay through the seller’s Realtor (unless otherwise instructed by the seller).

Buyers’ Realtors have a right to be present when their buyers’ offers are presented to sellers unless the seller has given his/her Realtor written instructions to the contrary.

Sellers’ Realtors are obligated to advise buyers’ Realtor in advance if more than one offer is to be presented unless they have received written instructions from the seller to do otherwise. If more than one offer is being presented, the offers are presented to the seller in the order in which they were received. Buyers’ Realtors may only be present when their own buyer’s offer is presented to the seller.

Once all the offers have been presented, the seller’s Realtor and the seller consult in private and decide how they will deal with the offer(s).

Sellers are entitled to deal with offers as they choose. Sellers do not have to accept an offer even if it is for the full asking price. Sellers are not obligated to counter an offer or otherwise respond to an offer, although most do.

In multiple offer presentations, the seller can accept or counter any offer of his/her choosing, and is not bound to deal with the highest or first offer if s/he does not wish to do so.

Sellers’ Realtors are obligated to advise buyers’ Realtors of the seller’s decision in writing, if they are asked to. Seller’s Realtors are not obligated to disclose any information about other buyers’ offers nor the seller’s reasons for dealing with a particular offer.

As agents for their clients, both sellers’ and buyers’ Realtors must not reveal confidential information about their clients.

Buyers who are involved in a multiple offer presentation should consider making their best offer, the first time, to encourage the seller to deal with their offer instead of another buyer’s offer.

Remember: even though a Realtor has drafted the buyer’s offer he/she is not a party to that contract. Realtors cannot force their clients to fulfil contractual terms (or to deal with your offer).

If the buyer or seller does not fulfil the commitments they have made in the contract the injured party may have legal recourse and should seek the advice of a lawyer.

 

 

What is a contract and when is it legally binding?

A contract is a legally binding agreement between two or more parties and describes the rights and obligations of the parties to the contract.

Where a contract has been properly drafted and signed by the parties to the contract, and where the terms are clear and the contract is not for an illegal purpose, then it is likely that a Canadian court would consider the contract valid and enforceable.

Only the parties to a contract can sue or be sued under the terms of that contract.

Before you sign a contract

  1. Never sign a contract you don’t understand.
  2. Before signing a contract, consult your Realtor, your Realtors’ managing broker, and/or your lawyer for advice.

Generally, Canadian courts expect if you have signed a contract, you have agreed to it and you will therefore be bound by its terms. You may not be protected if you claim that you did not understand what you were signing. Always ensure that you understand a contract before you sign it.

Standard Form contracts

The real estate contracts used by Realtors are standard form contracts. The wording and terms of these contracts have been prepared by lawyers and have been tested in Canadian courts.

Cancelling a contract

If you have signed a standard form Multiple Listing Contract, Exclusive Listing Contract or Exclusive Buyer Agency Contract and you wish to cancel the contract early, you can only do so if the other party to the contract (your Realtor’s company) agrees. The Real Estate Board cannot require its members to cancel listing or buyer agency contracts early.

If you have signed a contract to buy or sell a property (contract of purchase and sale) and wish to cancel it you should seek legal advice without delay. Realtors are not parties to these contracts and therefore cannot cancel them unless the contracting parties agree, in writing, to do so.

What happens if a buyer or seller doesn’t fulfil the terms of a contract?

Even though your Realtor may have drafted the contract to sell or buy a property for you, s/he is not a party to that contract. A Realtor cannot force his/her client to fulfil the terms of a contract with the buyer or seller.

If the buyer or seller does not fulfil the commitments they have made in the contract, you may have legal recourse and should seek legal advice. If you do not have a lawyer, you may wish to contact the Lawyer Referral Service at 604-687-3221. If you have difficulty understanding English then you may wish to contact organizations like S.U.C.C.E.S.S. at 604-684-1628 for assistance.

Here are examples of typical issues for which the buyer or seller (not the Realtor) is responsible:

  • Buyer does not close the sale.
  • Buyer does not remove the contract’s subject clauses.
  • Seller does not close the sale.
  • Seller does not remove the contract’s subject clauses.
  • Property is left untidy or dirty by the seller.
  • Seller has removed items that were included in the contract.
  • Transaction does not close on time.
  • Appliances break down or a previously unknown property defect reveals itself after closing.

Your Realtor and his/her brokerage may be able to assist you to resolve this type of complaint. Typically your Realtor will contact the other party’s Realtor or brokerage and let them know about your concerns and ask them for assistance in resolving your concern. As noted, your Realtor cannot force the other party to do what they said they would do in the contract. (For this, you need the assistance of a lawyer or the Courts.)

If you have a monetary claim of less than $50,000 you do not need a lawyer to represent you in court, although legal representation is recommended. The Small Claims Court of BC  is a place you can go to make your case before a judge.

 

What’s the difference between a buyer’s and seller’s market?

    

Several factors influence the housing market, including mortgage interest rates, inflation, employment, investment, construction, immigration, government assistance programs, and the health of local and world economies. All of these influence the supply and demand of the market which, in turn, affects prices.

There are three classifications experts use to describe the balance of supply and demand in the housing market:

Seller's market

A seller’s market is when there are more people looking to buy then there are homes available. This causes a rise in price above the long-term average rate of inflation. Typically this is indicated by a sales-to-active listings ratio of 20% or higher.

Buyer's market

In contrast, a buyer’s market is when there are many more homes for sale than there are buyers. As a result, prices increase slower than the long-term average rate of inflation. In extreme circumstances this can cause prices to decline. Typically this is indicated by a sales-to-active listings ratio below 12%.

Balanced market

A balanced market occurs when supply and demand are about the same, with home prices rising in line with long-term average rate of inflation. Typically this is indicated by a sales-to-active listings ratio between 12% and 20%.

Summary

Over a sustained period of time:

  • a seller's market is represented by a ratio of 20% or higher
  • a buyer's market is represented by a ratio of 11% or lower
  • a balanced market rests between 12-19%

 

Will I have to pay capital gains when I sell my house?

Capital gains taxes, first introduced in 1972, are charged on the difference between what you paid for an asset – for example, a stock, and what you sold it for.

You are not required to pay capital gains when you sell your principal residence for more than you paid for it.

However, you may be required to pay the tax on other properties you own including rental units and vacation homes. Capital gains tax is charged at a rate of 66.67 per cent. Consult with your lawyer or accountant since each home property seller and each property sold is a unique situation.

Why do I have to pay property taxes on the house I’m buying?

Property taxes in BC are due the first business day after July 1. If you buy a home at another time, for example in September, unless the property seller has stated they are responsible for pay property taxes in the Contract of Purchase and Sale, then you must pay your share of the year to avoid a penalty.

Consider these examples:

Before July 1

If you buy your home before July 1 or before the taxes are fully paid, you’ll receive the sellers part of the property taxes. You’ll be responsible for paying the total amount of the property taxes.

• Possession date: April 1
• Taxes: $3,500 less $570 (Home Owner’s Grant) = $2,930
• January 1 to April 1, 2015 is 90 days. $2,930.00 X 90 days = 26,370 ÷ 365 days in a year = $722.46

You’ll receive $722.46 from the seller towards total cost of the property taxes, which you will pay in full by July 1.

After July 1

If you buy your home after the seller has paid for the full tax year, you’ll have to reimburse them.
• Possession date: September 1
• Taxes: $3,500 less $570 (Home Owner’s Grant) = $2,930
• September 1 to December 31, 2013 is 122 days. $2,930  X 122 days = 35,746 ÷ 365 days in a year = $979.34

You’ll need to reimburse the seller $979.34 on the Statement of Adjustments to compensate them for already paying the taxes for the full year.

 

 

I have doubts about selling my house after I have accepted an offer? What are my options?

After you accept a buyer’s offer and all the conditions are met, the offer is binding on both sides.

An Agreement of Purchase and Sale between you and the buyer is a legal contract and you are obliged to sell your home. If you don’t sell you can be sued for damages.

Always make certain you understand and agree with all of the terms of the offer before signing. Get legal advice.

I’ve put a deposit on a home. Now I have second thoughts. What should I do?

At 3 a.m. you awaken, worrying about whether you’ve made the right decision to buy a home.

You wonder if the home is too big or too small and whether you took enough time to explore the neighbourhood. You also wonder if you paid too much and what would happen if interest rates suddenly rise?

This is a typical reaction to buying a new home. It’s known as buyer’s remorse. Buying a home is the largest purchase you’ll likely make in your lifetime and one of your mist significant commitments. Buyer’s remorse can strike any homebuyer, whether they’ve bought their first or tenth home.

Contact your REALTOR® who will 

  • review your original requirements, including your “must have’s” and your “nice to have’s,” your options for neighbourhoods and type of home – single family, town home or condominium. 
  • review your financing and what you decided you could afford, the comparative market analysis on the home you selected and the report from the home inspector; and
  • ask you to list the benefits of your home purchase so you will know you’ve made the best decision for you and your family.

It may take a few more days but your buyer’s remorse will pass. Congratulations on your new home!

How does a REALTOR® establish the selling price of my house?

To attract buyers and ensure you receive a price that works best for you, your REALTOR® will help establish your home’s current market value. ‘Market Value’ (given sufficient market exposure) is the price a reasonable buyer would pay for a property of that kind.

REALTORS® have access to information from various sources to help establish market value. When retained to advise on pricing questions, REALTORS® can:

  • review the stated value on your current BC Assessment Property Notice 
  • review recent sales and current listings history for properties like yours 
  • do on-site inspections, examining the exterior and interior of your property in detail, noting new features that could affect the property’s value 
  • give you information about the current economy and how it may have affected the value of your property e.g.  an improving economy may mean rising prices, while a declining economy may mean falling prices

 

Based on this information, your REALTOR® will provide an estimate of the value of your property  and then, together, you can establish an appropriate asking price.

Most successful home sellers have something in common: they use an informed, expert REALTORS® to help them through the complex process of selling their home.

 

Can you recommend a REALTOR® or a home inspector?

We don’t recommend specific professionals. We do offer the following sources to help you make an informed decision:

  • REALTOR®click here to view the listings in the neighbourhood where you plan to buy or sell your home to see which REALTORS® specialize in your area. Drive, cycle or walk around the neighbourhood and visit open houses to meet REALTORS®. Ask family, friends, colleagues and neighbours for recommendations. Interview REALTORS® to determine who would work best with you. 
  • Home inspector – visit the professional association at www.hiabc.ca which lists members. Ask family, friends, colleagues, neighbours and your REALTOR® for recommendations. Interview several home inspectors to determine who would best work with you. Ask about their education and experience, and for references. Remember to ask if the home inspector has professional liability insurance. 
Why do I need a home inspection?

When you move into your home you don’t want any unpleasant surprises, such as a long-forgotten underground fuel storage tank, or a structural flaw in your home’s foundation.

The solution is a home inspection.

Home inspections typically last three hours and cost up to $500, depending on the size of the property. The home inspector examines the roof, siding, foundation, basement, flooring, walls, drainage, electrical, heating and plumbing. The inspector looks for wood rot, mould, insects and fuel storage tanks, lead paint, aluminum, asbestos, knob and tube wiring, and urea formaldehyde foam insulation.

Take care to hire a fully trained, professional home inspector. Interview several and ask if they are members of a trade organization such as the Canadian Association of Home Inspectors and if they have Errors & Omission Insurance.

The inspector will give you an inspection report which detail property conditions. Carefully review the limitations contained in the report since the inspector can only report the condition of what s/he sees.

What’s the difference between the assessed value and the value a REALTOR®  places on your home?

REALTORS® are often asked why the assessed value of a home on a municipal property tax notice is different from the property value determined by a REALTOR®.

What accounts for the difference?

1. The assessed value on a municipal property tax notice is determined by BC Assessment (BCA), the provincial government agency responsible for classifying and assessing BC real property. BCA has a database of close to 2 million properties.

BCA’s estimate of value is current to the previous July 1, which means values may lag by six months. To update values, BCA appraisers may not visit every property. Instead BCA uses a mass appraisal system to calculate property value, looking at:

  • lot size
  • house type
  • square footage
  • age
  • type of heating
  • other structures such as a garage

2. A REALTOR® determines the value of a property by scrutinizing the most recent comparable market  data for homes sold in a neighbourhood using the MLS®. A Realtor also physically examines the exterior and the interior of a property, architectural styles, renovations, views, landscaping and neighbourhood zoning.

Where every lot and every home on a street is generally the same, both BCA’s estimate of value and a REALTORS’® estimate of value will be similar. Differences occur depending on the time of year, whether the home is unique and if there are features such as views.