Using an Open House Agent in London Ontario
by Kathy Mendham-Meathrel

I received a lot of great feed back on my prior article “Using Your Own Real Estate Agent to Purchase a New Build Home”. However, many readers asked a similar question, they wanted to know if they attended an Open House on a resale property are they under a similar obligation to the Open House agent? The answer to that question is the focus of this article.

In my prior article I stated:

“If you have ever attended a model home open house the person running it is not always a licensed real estate agent, it can be anybody hired by the builder to sell their houses. It is not well known but you do not need to use this individual to get your home built. Although once you’ve attended an open house and recorded your name in the ‘guest book’ you are usually stuck with who ever the builder has provided. “

This is the case because most home builders prefer to use there own staff, and feel that if you’ve attended there model home of your own accord, the outside agent isn’t introducing a new buyer to them.

The other big difference between purchasing a new home build and a resale sale home, is that the builder has most of the power in the relationship, they sell lots of homes each transaction isn’t a big deal to them, which is why you typically cannot negotiate price and are required to play by their rules. A resale home sale is a transaction between individuals with both parties having a similar level of power and both making huge financial decisions.

Getting back to the topic at hand, when you attend a normal open house you are under no obligation to use the agent who shows you the home. Real Estate professionals are bound by professional regulations, however these rules do not apply to you the client.

As a buyer you become bound to an agent once you sign a contract with them. The only time you are required to have a contract is when an agent is making an offer to purchase. The London St. Thomas Real Estate board would prefer a contract signed when an agent first shows you a home, however in practice this is commonly signed as part of the offer papers. The period to which you are bound for in the London area is typically 30 days, however it can be limited to the property in question, or greater than 6 months.

If you attend an open house and find that you wish to make an offer, in my opinion it’s in your best interest to consider the use of your own agent to purchase the home. (Note that occasionally the listing agent is not the agent who was hosting the open house.)

Reasons to consider the use of your own agent versus the use of the listing agent is that you avoid a situation commonly referred to as “dual agency”. This is when the agent is representing both the buyer and the seller, agents act neutral in these situations by not providing advice during negotiations. However, in these situations you will often be required to sign an Ontario Real Estate Association document entitled “Working with a Realtor – The Agency Relationship”. It states:

“Or, some buyers choose to contact the seller’s agent directly. Under this arrangement the REALTOR is representing the seller, and must do what is best of the seller, but may provide many valuable customer services to the buyer”.

If you are a buyer I strongly recommend seeking out your own agent to handle your purchase. Your agent will be able to look after your interests and provide you advice during the negotiation process. I know of several agents that would be willing to help you negotiate a purchase on short notice.

The situation of “dual agency” is not necessarily bad for you as the seller, since your agent has done their job and brought you a purchase offer. Like the buyer you lose their advice during the negotiation process, hopefully you will have discussed a negotiation strategy during the listing process. The big advantage to the seller is that they can save on commission fees, since some listing agents offer a lower commission rate in a dual agency situation.

I hope you found this article useful, as always if you have any questions about London Real Estate please feel free to contact me.

Kathy

*not intended to solicit properties currently listed for sale.