8. Presenting transaction proposals
8.1 Buyer’s broker: presenting one’s own transaction proposals
8.2 Seller’s broker: allowing transaction proposals to be presented
8.3 Ensuring timely presentation
8.1 Buyer’s broker: presenting one’s own transaction proposals
When a licence holder signs a brokerage contract to purchase in order to represent a client, he undertakes to protect and promote the client’s interests throughout the entire transaction. One of the key steps of the broker’s representation role is the presentation of a promise to purchase on behalf of his client. This step represents an added value to the broker’s role in a real estate transaction.
The representation duty of the buyer’s broker includes presenting a promise to purchase himself, whether in person, by phone or by videoconference. This increases the transaction’s chances of success since by so doing, the buyer’s broker can ensure that the strengths and salient points of the proposal, which are key elements in the protection of his client’s interests, are properly communicated to the seller. For his part, the seller’s broker can ask questions of the buyer’s broker in order to obtain answers, explanations and clarifications on the promise to purchase being presented.
By sending a promise to purchase by email or text message for the seller’s broker to present to his client, the buyer’s broker is not properly fulfilling his duty to represent, protect and defend the interests of his client.
8.2 Seller’s broker: allowing transaction proposals to be presented
The seller’s broker must allow a licence holder who has obtained a written proposal from his client to participate in the presentation of the proposal1.
He has an obligation to ensure that the information concerning the promise to purchase is fully and accurately communicated to his selling client, since his role is to protect and promote the latter’s interests, but also in order to provide fair treatment to all parties to the transaction.
There is only one exception where the seller’s broker can prevent another licence holder from presenting a promise to purchase to his selling client, i.e. when the broker has received written instructions to this effect from his client. This request must originate from the seller, and not result from a suggestion on the part of the broker. Brokers representing sellers may not adopt the practice of systematically and unjustifiably asking their clients to provide such instructions.
Only in exceptional cases, such as a client claiming a prohibitive medical condition, may the seller’s broker inform other licence holders that they might not be able to present transaction proposals themselves.
In these exceptional situations, the seller’s broker must, in a timely manner, that is as soon as he enters “collaboration mode,” inform other licence holders that they will not be able to participate in the presentation of promises to purchase or counter-proposals. A good professional practice consists in mentioning this in the “collaborator info” section of the detailed description sheet, to avoid other licence holders from being caught unprepared.
1 Section 100 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising
8.3 Ensuring timely presentation
The seller’s broker must ensure that his client can offer his immovable to as many potential buyers as possible in order to maximize his chances of obtaining the best possible price and conditions. Therefore the broker must present to the seller every transaction proposal received as soon as possible following receipt, without preference as to chronological order of receipt, identity of the licence holder submitting it, or circumstances under which the proposal was made2.
In addition, the seller’s broker must not unduly delay the presentation of a transaction proposal received from another licence holder3. He cannot limit such presentation to a specific time, nor prevent a buyer from presenting a transaction proposal or force him to do so in a framework that could be adversely affect the buyer.
This means that licence holders may not recommend to their selling clients a sales strategy that consists in having promises to purchase presented simultaneously at a given date and time. They cannot refuse or delay the presentation of a promise to purchase claiming this as a marketing “strategy,” since this goes against the obligation to present every transaction proposal as soon as possible following receipt. This rule exists to protect the public, whether on the buying or the selling side.
For example, a prospective buyer could find himself in a situation where the acceptance deadline of his promise to purchase ends before the date set for the presentation of transaction proposals. If the seller’s broker refuses to have this proposal presented to his client, claiming that he is waiting to receive offers until the date and time announced, this “strategy” would penalize both the buyer and the seller by limiting their access to the market. The seller must have the opportunity to respond to the proposal, either by accepting it, refusing it, or countering it, or even by informing the buyer that he wishes to wait until he receives other offers before responding. As for the buyer, he has the right to have his promise to purchase presented to the seller without delay.
On the other hand, if the seller accepts a promise to purchase without waiting for others that may be presented by the deadline set, he could be responsible toward the other prospective buyers who waited until the deadline set by the seller. In this situation, a buyer could have missed out on another transaction while waiting for a response to his offer. This is another reason why a strategy aimed at having all promises to purchase presented simultaneously is not advisable.
In summary, all promises to purchase received must be presented as soon as possible, without delay nor preference as to chronological order of receipt, identity of the licence holder submitting it, or circumstances under which the proposal was made.
