Buyer representation

What representation means under BC rules

In British Columbia, what a brokerage owes you as a client is a written list rather than a matter of goodwill. Section 30 of the Real Estate Services Rules sets out the duties a brokerage and its licensees owe a client, and it is short enough to read before you sign anything.

The duty buyers notice most is the eighth one: use reasonable efforts to discover relevant facts about any property the client is considering buying. That is the difference between somebody who opens doors for you and somebody whose job is to find out what the listing does not say.

The fourth duty matters almost as much, and it works in the other direction. A licensee must advise you to get independent professional advice on anything outside their own expertise. Read that as a boundary rather than as a disclaimer: the answer to a legal question, a structural question or a lending question is supposed to come from somebody qualified to give it.

• Act in the best interests of the client.
• Act in accordance with the lawful instructions of the client.
• Act only within the scope of the authority the client has given.
• Advise the client to get independent professional advice on matters outside the licensee's expertise.
• Keep information about the client confidential.
• Disclose to the client all known material information about the real estate services.
• Communicate all offers to the client in a timely, objective and unbiased way.
• Use reasonable efforts to discover relevant facts about any property the client is considering buying.
• Take reasonable steps to avoid any conflict of interest.
• Disclose a conflict of interest promptly and in writing, in a document separate from any other agreement.

Questions lenders check at pre-approval

The form that comes before the advice

Before a licensee provides trading services to you, they have to give you the Disclosure of Representation in Trading Services form and go through it with you. The form states in plain terms whether you are being represented as a client, with the full set of duties above, or dealt with as a non-client, with much less.

Your signature on that form is optional. Signing it only records that you received it, and a licensee still has to review it with you if you would rather not sign. A licensee dealing with a consumer who is not accompanied by their own licensee has to make the disclosure even if that consumer already has a relationship with another licensee elsewhere.

At an open house the obligation has a threshold. A licensee can host the event and answer general factual questions without producing the form. It applies once confidential information is asked for or offered, which is the moment the conversation stops being general.

The practical rule for a buyer follows from that. Until you know which side of the form you are on, do not say what your maximum price is, why you are moving, or how quickly you have to be out of where you live now.

If you choose not to be represented

Buying without your own representation is allowed, and some buyers prefer it. The rules then require the licensee on the other side to tell you, in writing, three things: the risks that arise because they owe their duties to their own client, the limited assistance they are able to give you, and the recommendation that you get independent professional advice.

It is worth understanding what that limitation actually is. The listing licensee owes the seller the duty to act in the seller's best interests and to disclose to the seller all known material information about the services. Anything you tell that licensee about your budget or your timing is information that may travel to the seller. That is not a failure on their part. It is the duty working as written, for the other party.

Your three business days after the offer is accepted

Since January 3, 2023, a buyer of residential property in British Columbia has had a right to cancel the contract within three business days after the offer is accepted. It is called the Home Buyer Rescission Period. Only a buyer can use it, and neither side can waive it or contract out of it.

Using it costs a fee set by regulation at 0.25% of the purchase price stated in the contract. On a purchase at $900,000 that is $2,250 paid to the seller. On a purchase at $1,400,000 it is $3,500.

Four kinds of sale sit outside the right entirely, as listed in the regulation: property on leased land, a leasehold interest, property sold at auction, and property sold under a court order or the supervision of a court. If you are buying any of those, the three days do not exist for you.

Notice has to be served the way the regulation sets out: by registered mail to the seller's address, by fax to the seller's fax number, or by email with a requested read receipt, using the details in the contract. The notice counts as served when it is sent, which is why the method matters more than the delivery.

The part worth planning around is the length. Three business days does not fit a home inspection, a strata document review and a financing approval. It is a period to reconsider a decision, not a period to complete your due diligence, and that is exactly why subject conditions in the contract still do the real work.

Subject-free offers explained Home inspection checklist for BC

What to ask before you sign a buyer's agreement

A buyer's agreement is a contract, and the terms vary between brokerages. The questions below are the ones that change what you are agreeing to, and every one of them has an answer that can be written into the document.

Two of the section 30 duties cover conflicts specifically: take reasonable steps to avoid any conflict of interest, and disclose a conflict promptly, in writing, in a document separate from any other agreement. The separate-document requirement exists so that a disclosure cannot be buried in a clause of the agreement you are signing.

• Which geographic areas and property types the agreement covers
• How long it runs, and exactly how it ends before that date
• Whether it is exclusive, and what that prevents you from doing
• Who your day-to-day contact is, and who covers for them
• How the fee is calculated, who pays it, and when it becomes payable
• What happens if you buy privately, or directly from a builder's sales centre
• How a conflict of interest would be disclosed to you, and in what document
• What written record you receive of property research done on your behalf

The people who are not your real estate licensee

A real estate licensee is one of five or six people involved in a purchase, and the duty to refer you outward on matters outside their expertise means several of these are not optional.

Your lawyer or notary prepares the transfer, registers it, and produces the statement showing what you owe on completion day. Your inspector reports on condition. Your lender or mortgage broker decides how much you can borrow and on what terms, and their approval is the one that makes a subject to financing condition removable. Your insurer has to be willing to cover the property, which is not guaranteed on an older home or one with a past claim. An appraiser gives a lender an independent value, which is a different exercise from a market evaluation.

Line those relationships up before you need them. The week between an accepted offer and a subject removal deadline is a poor time to be looking for a notary who has capacity.

Closing costs in BC Home insurance before completion

The tax question to settle early

Property transfer tax is the largest single closing cost for most buyers, and whether you are exempt from it changes your cash plan more than every other line together. It is charged in bands on the fair market value: 1% on the first $200,000, 2% on the portion from $200,000 to $2,000,000, 3% on the portion from $2,000,000 to $3,000,000, and a further 2% on the residential portion above $3,000,000.

The First Time Home Buyers' Program removes it entirely on a property with a fair market value of $835,000 or less, and gives a partial exemption where the value is more than $835,000 but less than $860,000. Those thresholds took effect April 1, 2024. The province has changed them before, so confirm them on gov.bc.ca rather than relying on any article, including this page.

The qualifying conditions are strict and several of them are easy to fail without realising it. The prior-ownership test covers a registered interest in a principal residence anywhere in the world at any time, not just in British Columbia, and the occupancy conditions continue for a year after registration.

• Be a Canadian citizen or a permanent resident
• Either have lived in BC for at least one year immediately before registration, or have filed at least two income tax returns as a BC resident in the six taxation years before registration
• Have never owned a registered interest in a property that was your principal residence anywhere in the world, at any time
• Have never received a first time home buyers' exemption or refund before
• Buy a property of 0.5 hectares or less, with only residential improvements, as your principal residence
• Move in within 92 days of the registration date, and occupy it as your principal residence until the first anniversary of registration

Property transfer tax and the first-time buyer exemption First-time buyer programs that stack