The Condo Contract!

Nov 2, 2021

When you’re about to buy a condo in Toronto (or Mississauga since we love the 905), your agent will put a contract called “Buyer Representation Agreement” (BRA for short) in front you before submitting your offer for review. Everyones parents always told them not to sign things and that fear still exists in the eyes of new home buyers!

When you read through the contract you’ll see key words and dates which come across as scary but this is something that you’ll need to sign at some point!

Let us explain what a BRA is exactly. A buyer needs to be represented legally throughout their real estate transaction, this paperwork legally binds everything and everyone involved. This paperwork ALSO makes sure that the buyer agent gets their pay cheque for the service he/she has provided in the process.

In almost 99% of real estate transactions, the service for a buyer is free. The buyer agent will typically bill their commission to the seller agent’s company. On the BRA you will see a line that discloses this commission percentage and the fine print says (paraphrased) that if the buyer agent isn’t paid the stated amount, they will send an invoice to the buyer for the difference. Now that, can be expensive, especially as buyer who most likely just dumped all of their money into their downpayment and saved the rest for their closing costs! Your agent will typically explain to you what this means, but our advice is that you should ask your agent what their policy is on commission if there is a discrepancy between what is on the BRA and what the seller pays.

Along with commission, the next most questioned section of the BRA happens to be the timeline on the contract. In the defence of all agents and the industry, it is fine to ask for some commitment from when we spend time finding properties and showing them, however, each agent is different! Most clients will see this part of the BRA and say “I don’t want to be tied down!” and that’s completely ok as well. As a buyer, have that conversation with your agent to see what best fits your need and what best caters to your relationship with your agent. At The Condo Nerds, we make our contracts valid for about 7 days once we decide it’s time to put in an offer, which gives us enough time to firm the deal. Some agents will make their contracts valid for 30 to 60 days, but again that is something that should be talked about with your agent!

The BRA is a vital part of any real estate transaction, it protects everyone involved. When you end up seeing one of these, don’t run from it! Just make sure you question what may be unclear to you and get the clarity you need.

Happy buying!