Exclusive Brokerage Agreement for Property Purchase: Guide by Team Tardif 2024

Exclusive Brokerage Agreement for Property Purchase: Guide by Team Tardif

When you choose to be represented by a broker for the purchase of a property, it is imperative to use the mandatory form from the OACIQ, the Exclusive Brokerage Agreement for Purchase. This form is required in the following cases:

Acquisition of a residential building with less than 5 units; Purchase of a divided co-ownership; Investment in joint ownership condominiums.

Designed according to OACIQ standards, just like the other forms our brokers use, this contract aims to ensure your maximum protection while clearly establishing the basis of the broker's intervention. It includes, among other things:

The essential characteristics of the desired property; The price and terms of purchase aimed for; The respective commitments of the buyer and the broker, including the buyer's broker's remuneration (either directly paid by the buyer or added to the offered purchase price for the property, thus becoming part of the mortgage financing).

ATTENTION: Without the signature of a Brokerage Agreement for Purchase, the broker cannot represent you or promote your interests in the acquisition of residential property. The law prohibits brokers from representing clients without a written brokerage agreement.

Key Points to Remember

By signing an Exclusive Brokerage Agreement for Purchase, you ensure that the broker's obligations are defined therein and that they are obliged to adhere to them. This contract also allows for planning the type of follow-up that will be carried out by your broker. Additionally, if the seller of the property you are eyeing is not represented by a broker, your broker will conduct all necessary checks, thus filling the gap left by the absence of checks performed by the seller's broker. This contract also authorizes the broker to prospect and solicit individuals for properties that are not yet on the market.

When you are represented, your broker advocates for your interests as a buyer, advises you according to your needs and criteria, negotiates the terms of a purchase offer, and presents it to the seller or their broker on your behalf.

If you choose not to sign a Brokerage Agreement for Purchase, the seller's broker or their associate cannot advocate for your interests as they work for the seller, who has their own interests in the transaction. Thus, without a contract, the broker is obligated to ensure you fair treatment by providing, objectively, relevant information about the transaction as well as the rights and obligations of all parties involved.

Before Committing: Essential Preparation

Understanding the role of a real estate broker. Choosing your broker and the property that suits you. Establishing your budget and borrowing capacity. Carefully reviewing the Exclusive Brokerage Agreement for Purchase.

The remuneration and compensation conditions of your broker must be specified in your brokerage agreement. If the seller has also chosen to work with a broker, compensation sharing conditions are defined. Thus, a portion of the compensation specified in the seller's brokerage agreement will be allocated to your broker and deducted from what is specified in your purchase brokerage agreement.

You will not have to pay your broker if the sharing conditions specified in the seller's brokerage agreement are equivalent to the compensation specified in your purchase brokerage agreement. If these conditions are less advantageous, you must pay the difference directly to your broker or finance it otherwise.

Suppose the seller is not represented by a broker. In that case, you will have to pay the total compensation specified in your purchase brokerage agreement directly to your broker or have it included in the purchase price. In the latter case, the additional amount will be added to the offered purchase price (and thus to the mortgage amount). Your broker will be compensated by the notary from the available funds for the transaction, with the remainder handed over to the seller.

The property description sheet, provided by your broker or the seller's broker, will allow you to evaluate a property of interest to you. It contains a detailed description of the property in its current state, allowing you to become acquainted with all the details that may influence your decision, such as the asking price, property type, number of rooms, cladding, etc.