Real Estate

How binding is the exclusivity clause of the "Buyer Representation Agreement"?

  • Last Updated:
  • May 21st, 2019 7:20 pm
Newbie
May 16, 2017
16 posts
3 upvotes

How binding is the exclusivity clause of the "Buyer Representation Agreement"?

Here's the form in question: http://realvaluehome.ca/pdfs/6%20Toront ... eement.pdf

I was curious to learn more about this because it seems somewhat predatory.

A real estate agent shows you a couple apartments and you have to promise to only work with them?

And I owe them commission if I find an apartment on my own?

What happens if I theoretically go ahead and find an apartment by myself and refuse to pay? How would they even know I found an apartment?

This all seems very fishy...
25 replies
Deal Addict
User avatar
Dec 27, 2007
1310 posts
761 upvotes
Oshawa
You’re asking how binding is a contract both parties sign that is black and white which clearly outlines the responsibilities of each during a real estate transaction?
It’s binding, and the contract is with the brokerage not the agent.
If you find an apartment and refuse to cover any costs owed to said brokerage then they are within there legal right to take you to court.
How would they find out? Many various ways, it’s a gamble you would have to take hoping that they didn’t.
Advice...don’t work with an agent that asks you to sign one.
Deal Expert
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Aug 2, 2010
15196 posts
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Here 'n There
jonnyb wrote: You’re asking how binding is a contract both parties sign that is black and white which clearly outlines the responsibilities of each during a real estate transaction?
It’s binding, and the contract is with the brokerage not the agent.
If you find an apartment and refuse to cover any costs owed to said brokerage then they are within there legal right to take you to court.
How would they find out? Many various ways, it’s a gamble you would have to take hoping that they didn’t.
Advice...don’t work with an agent that asks you to sign one.
LOL exactly. This is probably the most kindergarten-ish question I have ever seen on RFD. Actually, even a fetus wouldn't ask that question!

The OP committed to something by signing a legal contract. By the OP's thought process if they have a fixed mortgage that the bank signed their name to it shouldn't be that 'binding' and the bank should be able to double the rate, because, well, why should a legal contract the signed be binding?

If anything is fishy it's that the OP asked the question. Must be a troll question. It can't be anything else...
Deal Addict
Sep 19, 2009
2280 posts
991 upvotes
Toronto
ruffalbite wrote: I was curious to learn more about this because it seems somewhat predatory.
I believe that you do not realize that you do not have to sign the BRA. Any agent will happily help you buy a house without a BRA as this is the way they make money on you.

You should check your inbox, probably couple offers are already waiting for your consideration :)
Sr. Member
May 7, 2015
951 posts
1529 upvotes
Toronto, ON
ruffalbite wrote: Here's the form in question: http://realvaluehome.ca/pdfs/6%20Toront ... eement.pdf

I was curious to learn more about this because it seems somewhat predatory.

A real estate agent shows you a couple apartments and you have to promise to only work with them?

And I owe them commission if I find an apartment on my own?

What happens if I theoretically go ahead and find an apartment by myself and refuse to pay? How would they even know I found an apartment?

This all seems very fishy...
How binding is the agreement? I dunno why don’t you read the agreement ...
Newbie
May 6, 2019
28 posts
9 upvotes
This form isn't fishy, it's a normal real estate practice.
What might be fishy is if this form isn't explained to you or if the agent attempts to deceive you into signing.
In order to avoid being deceived, you just have to know what you're signing before you sign.

If you have sign this form, yes, you will need to pay them the commission they are owed even if find an apartment on your own.
There are many agents in the field today who do not require you to sign this form.
They will show you properties and act in good faith that you won't just use them and then ditch them after they've offered you their services.
Newbie
May 16, 2017
16 posts
3 upvotes
eonibm wrote: LOL exactly. This is probably the most kindergarten-ish question I have ever seen on RFD. Actually, even a fetus wouldn't ask that question!

The OP committed to something by signing a legal contract. By the OP's thought process if they have a fixed mortgage that the bank signed their name to it shouldn't be that 'binding' and the bank should be able to double the rate, because, well, why should a legal contract the signed be binding?

If anything is fishy it's that the OP asked the question. Must be a troll question. It can't be anything else...
Nope - didn't say I signed one, said I was wondering about it. Please read more carefully to improve your understanding.

People find ways out of predatory contracts - see: gym contracts. Google returns about 700k results on the subject. ;)
Newbie
May 16, 2017
16 posts
3 upvotes
moeymoeymoeymoe wrote: How binding is the agreement? I dunno why don’t you read the agreement ...
This logic is backwards. It is clear that reading the agreement led to the question...
Sr. Member
May 7, 2015
951 posts
1529 upvotes
Toronto, ON
ruffalbite wrote: This logic is backwards. It is clear that reading the agreement led to the question...
Reread the agreement until you understand it.
Sr. Member
Dec 23, 2012
672 posts
532 upvotes
RICHMOND HILL
ruffalbite wrote: Nope - didn't say I signed one, said I was wondering about it. Please read more carefully to improve your understanding.

People find ways out of predatory contracts - see: gym contracts. Google returns about 700k results on the subject. ;)
It's a contract, which is binding, but really only as binding as much as a small claims judge would enforce, sometimes they do, sometimes they don't. I'm curious though, since you know you can google how gym contracts work, what prevented you from googling how buyer representation agreements work?
Deal Expert
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Aug 2, 2010
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Here 'n There
ruffalbite wrote: Nope - didn't say I signed one, said I was wondering about it. Please read more carefully to improve your understanding.

People find ways out of predatory contracts - see: gym contracts. Google returns about 700k results on the subject. ;)
My understanding is absolutely perfect. You are asking what the situation would be if you signed the contract. I answered. Whether you actually signed it is irrelevant to your 'question'. Sheesh!

You don't seem to understand the meaning of the word 'contract'. Try the google for an answer.
Deal Expert
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Aug 2, 2010
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Here 'n There
Mosho1 wrote: It's a contract, which is binding, but really only as binding as much as a small claims judge would enforce, sometimes they do, sometimes they don't. I'm curious though, since you know you can google how gym contracts work, what prevented you from googling how buyer representation agreements work?
There is no such thing as 'only as binding as a small claims court judge would enforce' unless the obvious factors for declaring a contract void are there, ie illegal or against public policy, person not of sound mind when signing, not of age, terms impossible, etc.

Contract enforceability are otherwise not subject to which side of the bed the small claims court judge got out of that morning. Geez, the advice some people provide on RFD gets more bizarre by the hour!
Deal Guru
User avatar
Mar 23, 2008
13006 posts
10009 upvotes
Edmonton
eonibm wrote: There is no such thing as 'only as binding as a small claims court judge would enforce' unless the obvious factors for declaring a contract void are there, ie illegal or against public policy, person not of sound mind when signing, not of age, terms impossible, etc.

Contract enforceability are otherwise not subject to which side of the bed the small claims court judge got out of that morning. Geez, the advice some people provide on RFD gets more bizarre by the hour!
No, but it is subject to the wording of the contract, the debating/logic/analytic skills of the two parties, and the interpretation of the JP/judge. My experience in trying to get legal opinions from family who are lawyers are always filled with phrases like “most likely, probable, etc.” Never a straight answer. :)

C
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Aug 2, 2010
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CNeufeld wrote: No, but it is subject to the wording of the contract, the debating/logic/analytic skills of the two parties and the interpretation of the JP/judge. My experience in trying to get legal opinions from family who are lawyers are always filled with phrases like “most likely, probable, etc.” Never a straight answer. :)

C
Wrong again. It has nothing to do with the 'debating/logic/analytic skills of the two parties' which the Judge doesn't give a rat's ass about, nor 'the interpretation of the JP/judge'. A contract is a contract unless the circumstances I outlined are present. Period.

And the reason you don't get a straight answer is because of who are asking for a gratuitous legal opinion from.
Sr. Member
Dec 23, 2012
672 posts
532 upvotes
RICHMOND HILL
eonibm wrote: There is no such thing as 'only as binding as a small claims court judge would enforce' unless the obvious factors for declaring a contract void are there, ie illegal or against public policy, person not of sound mind when signing, not of age, terms impossible, etc.

Contract enforceability are otherwise not subject to which side of the bed the small claims court judge got out of that morning. Geez, the advice some people provide on RFD gets more bizarre by the hour!
It's technically binding, but if no one enforces it it may as well not be binding. Law and contracts is (sadly) not black and white and there are many ways to get out of a "binding" contract on technicalities and loopholes. In the case of this particular type of agreement, many realtors (most I've ever worked with and family have) give you the representation agreement with the documents to sign for the first offer. The onus to explain it is on them and there is a very good chance that if you claim it wasn't explained to you clearly even if you were of a sound mind when signing, and they can't prove otherwise to a judge, then the contract won't be enforced.
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Aug 2, 2010
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Mosho1 wrote: It's technically binding, but if no one enforces it it may as well not be binding. Law and contracts is (sadly) not black and white and there are many ways to get out of a "binding" contract on technicalities and loopholes. In the case of this particular type of agreement, many realtors (most I've ever worked with and family have) give you the representation agreement with the documents to sign for the first offer. The onus to explain it is on them and there is a very good chance that if you claim it wasn't explained to you clearly even if you were of a sound mind when signing, and they can't prove otherwise to a judge, then the contract won't be enforced.
Yeah well you are just repeating one of the ground I already referred to. I don't know why.
Sr. Member
Dec 23, 2012
672 posts
532 upvotes
RICHMOND HILL
eonibm wrote: Yeah well you are just repeating one of the ground I already referred to. I don't know why.
What you're saying is that the contract is binding unless it isn't binding because of any number of reasons then, which isn't a very useful statement to the OP and while my wording wasn't accurate I think my meaning was clear. You could have pointed that out instead of being pointlessly confrontational.
Member
Feb 15, 2018
449 posts
558 upvotes
Edmonton
Not legal advice. Please talk to a lawyer.
A contract is only binding to to the extent the aggrieved party is willing to enforce the contract through the courts. For a small property costing $400k, the commission lost would be $10k, hardly worth the legal battle. So the realtor might not even pursue it.

For a million dollar home that might be a whole different ball game.

You might need to research case law on these matters to see how prevalent such law suits are and the judge's reasoning.
Edmonton area Realtor
Newbie
May 16, 2017
16 posts
3 upvotes
Mosho1 wrote: It's a contract, which is binding, but really only as binding as much as a small claims judge would enforce, sometimes they do, sometimes they don't. I'm curious though, since you know you can google how gym contracts work, what prevented you from googling how buyer representation agreements work?
Given the context of the thread, it should be clear that it was attempted, but the issue not nearly as widespread as gym contract problems.

Practically speaking, that's probably because it's a generic problem all over the English speaking world, whereas this specific contract appears to be for Toronto. In addition, I would suppose that one signs up for gyms more often than they rent new apartments.
Newbie
May 16, 2017
16 posts
3 upvotes
eonibm wrote: My understanding is absolutely perfect. You are asking what the situation would be if you signed the contract. I answered. Whether you actually signed it is irrelevant to your 'question'. Sheesh!

You don't seem to understand the meaning of the word 'contract'. Try the google for an answer.
Thanks for the suggestion! Unfortunately, it is clear you haven't comprehended the spirit of the original question.

There are examples (too lazy to find any but you can feel free to search for yourself) of predatory companies suing defendants and losing because the contract was unreasonable / predatory.

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