The Exclusive brokerage contract – Purchase

When you choose to do business with a broker for the purchase of a property, the OACIQ recommends the use of the form Exclusive Brokerage Contract – Purchase for the purchase of:

A residential immovable containing less than 5 dwellings

A divided co-ownership property

An undivided co-ownership property

Like all other forms created by the OACIQ and which brokers are required to use, this one was designed to offer you maximum protection while clearly establishing the terms under which the broker will act. It specifies, among other things:

The essential features of the desired property;
The desired price and terms of purchase;
The respective obligations of the buyer and the broker, including as regards the remuneration of the buyer’s broker (which can be paid directly by the buyer or added to the purchase price offered for the property and included in the mortgage loan).

GOOD TO KNOW

By signing an Exclusive brokerage contract – Purchase, you make sure that your broker’s obligations are defined and that he will fulfil them. The contract can also stipulate what type of follow-up will be done by your broker. In addition, if the seller of the property you are considering is not represented by a broker, your broker will make all the necessary verifications that would otherwise be the responsibility of the seller’s broker. This contract also allows the broker to canvass and solicit for properties that are not on the market.

GOOD TO KNOW

Remuneration

The amount and terms of your broker’s remuneration must be specified in your brokerage contract.

If the seller has also opted to do business with a broker, remuneration sharing conditions will be discussed. A portion of the remuneration amount indicated on the seller’s brokerage contract will be paid to your broker and will be deducted from the remuneration stipulated in your brokerage contract to purchase.

You will not have to pay your broker if the remuneration sharing conditions on the seller’s brokerage contract are equivalent to the remuneration stipulated in your brokerage contract to purchase.

If the remuneration sharing conditions on the brokerage contract to sell are below what is stipulated in your brokerage contract to purchase, you will be required to pay the difference directly to your broker, or to include it in your financing.
In the latter case, the difference in the amount payable will be added to the purchase price offered (and therefore added to the amount of the mortgage loan), and your broker will be paid by the notary from the sums available for the transaction, with the rest being paid to the seller.

If the seller is not represented by a broker, you will need to pay to your broker the entire amount stipulated on your brokerage contract to purchase or include it in your financing. In the latter case, the total remuneration payable to your broker will be added to the purchase price offered (and therefore added to the amount of the mortgage loan), and your broker will be paid by the notary from the sums available for the transaction, with the rest being paid to the seller.

Detailed description sheet of the immovable

The detailed description sheet provided by your own broker or by the seller’s broker will help you review the features of a property you are considering. It contains a detailed description of the property in its current condition, including all the details liable to have an impact on your decision, including asking price, type of property (e.g. single-family, co-ownership, intergenerational, income property), number of rooms, exterior cladding, etc.

Read the article COVID-19: Its impact on your real estate transactions to learn more about the OACIQ's recommendations in the current context.

Avoid making a bad decision

When you see a property you like, it can be tempting to want to proceed quickly and overlook certain details. Here are some of the main regrets expressed by first-time buyers a short time after their purchase (according to an U.S. survey):

House too small or layout not suited to needs;
Underestimated installation and maintenance costs;
Unpleasant neighbours;
Yard too small or difficult to maintain.

To avoid these problems, take the time to get the information you need and stick to your budget, while keeping some flexibility (see section Establishing your budget and your borrowing capacity). Your broker can help you with this process.