Choosing a Listing Agent: Questions to Ask Before You Sign

Your listing agent helps you set a price, markets your home and negotiates the sale, so it pays to compare a few agents before you sign anything. Here is how to check a licence in BC, the questions I suggest you ask each agent you interview, the red flags to watch for, and what every agent must disclose to you under BC's rules.

The short version

Check the licence first

In BC, anyone who provides real estate services to others for pay generally needs a licence from the BC Financial Services Authority (BCFSA), unless an exemption applies. BCFSA's Find a Professional search lets you look up a licensee by name, team name or licence number, or a brokerage by name. The results show contact details, the licence category and level, any conditions or restrictions on the licence, and recent discipline history. What to look for:

• The right category. The search lists three kinds of service: trading (which covers sales), rental property management and strata management. To list your home, you want a licensee for trading services.
• The level. Most licensees are representatives. An associate broker has the education to manage a brokerage but isn't in charge of one, and a managing broker is in active charge of a brokerage and supervises its licensees.
• The brokerage. A licensee can't provide real estate services unless a brokerage engages them, and they act in its name. Your listing contract is with the brokerage, and the commission is paid to it.
• Conditions and discipline. BCFSA says the Superintendent of Real Estate can place conditions on a licence for a variety of reasons, so if you see one, ask about it. The search shows only the current licence period, not the full licensing history.
• Teams. Teams must register with BCFSA, and you can search by team name. On a team, all the members are collectively your agent, and they must all be named on your service agreement and disclosure forms.

Questions about price and marketing

BCFSA suggests interviewing several real estate professionals and making sure you understand each one's proposed marketing strategy. Ask each agent the same questions, so you can compare the answers:

• How would you price my home, and why? Ask to see the recent sales and current listings behind the number, and how they adjusted for differences in size, condition and lot. I explain how this works in Inside a Comparative Market Analysis.
• Would you price below market value to draw offers? BCFSA warns that this can backfire: buyers may offer only below the list price, or assume something is wrong with the home. Ask how they would handle an offer date, which I cover in Offer Dates.
• What is your marketing plan? Photos, floor plans, online advertising, open houses and signs, and whether the home goes on the MLS® System or stays an exclusive listing.
• What do you know about homes like mine nearby? Ask about their recent sales in your neighbourhood and of your type of home, and what buyers there tend to ask about.

Questions about service and communication

• Who will I be dealing with? Ask whether you will work with the agent alone or with a team, and who will be at showings and open houses. BCFSA's guidelines say an unlicensed assistant can't show a property, host an open house, answer questions about the listing from people outside the brokerage or present an offer.
• How will showings work? Who books them, how much notice you will get, and whether a lockbox will be used.
• How will you keep me informed? How often you will hear from them, how you will get feedback from showings, and how quickly they usually reply.
• How will you handle offers? Agents in BC must communicate every offer on your listing to you, and BCFSA suggests asking how competing offers would be managed.

Questions about commission and the contract

• What is the commission? There is no standard rate you have to pay. BCFSA's consumer guide says that while some brokerages have a commission all their agents charge, any amount can be negotiated, and if you can't agree, either of you can decide not to go ahead. The Financial Consumer Agency of Canada says commissions typically range from 2% to 6%, depending on where you live.
• How much goes to a buyer's brokerage? Your listing agreement must state the total you will pay and, where it is shared, how much goes to a cooperating brokerage, meaning the buyer's brokerage, and how much the listing brokerage keeps.
• How long is the listing? The agreement must state when it takes effect and when it expires. Ask for a term you are comfortable with, and what happens if you want to end it early.
• Can I read the agreement first? Take it home and read every clause. I go through the key terms in Listing Agreements in BC.

Red flags

• A high price promised to win the listing. If one agent's number is far above the others and they can't show you sales that support it, ask why. An overpriced home may get fewer showings, and you may end up reducing the price later; see Price Reductions.
• Commission on anything over the list price. BC's rules don't allow a commission based on the difference between your list price and the sale price.
• Pressure to sign on the spot. BCFSA's guide says your agent will explain all the terms of the listing contract before you sign it, so you understand your obligations. Take the time you need.
• Vague answers about who does the work. If you can't find out who will show your home and handle offers, keep asking.
• Advice to keep a known defect quiet. An agent who knows of a material latent defect must disclose it in writing to the other parties before an agreement is made.
• No licence on record. If you can't find the person on BCFSA's search, or the licence isn't for trading services, don't sign.

What every agent must disclose

BC's rules require these disclosures, in writing:

• Disclosure of Representation in Trading Services. Before providing any trading services, the agent must tell you whether they will represent you as a client, explain their duties to clients and non-clients, and tell you how to make a complaint to BCFSA.
• Payments from anyone but you. If the agent receives or expects payment from someone other than you, such as a referral fee from an inspector or contractor, they must tell you the source and the amount, or how it will be worked out.
• Interest in the trade. If the agent wants to acquire your home, directly or indirectly, they must disclose it on BCFSA's form, signed by their managing broker, before any agreement.
• Conflicts of interest. The agent must take reasonable steps to avoid conflicts, and disclose any promptly and fully.
• Expected remuneration. With each offer, your agent gives you a Disclosure to Seller of Expected Remuneration, showing in dollars what you would pay the listing brokerage, what goes to the buyer's brokerage and what the listing brokerage keeps.

Once you are a client, your agent must act in your best interests, follow your lawful instructions, keep your information confidential and disclose all known material information. If you think a licensee has acted improperly, you can make a complaint to BCFSA, and its Practice Standards Advisors answer questions about real estate services. I explain how brokerages handle buyers and sellers in the same deal in Dual Agency in BC.

Questions sellers often ask me

How do I check that a real estate agent is licensed in BC?

Use BCFSA's Find a Professional search. You can search by name, team name or licence number, and the results show the licence category and level, any conditions or restrictions, and recent discipline history.

How many agents should I interview?

There is no set number, but BCFSA suggests interviewing several. Ask each one the same questions about price, marketing, communication and commission, so you can compare the answers.

Should I choose the agent who suggests the highest price?

Not on that basis alone. Ask each agent for the sales behind their number; a price far above the others with nothing to support it may mean fewer showings and a price reduction later.

Can my agent's assistant show my home?

Not if the assistant is unlicensed. BCFSA's guidelines say unlicensed assistants can't show a property, host an open house or present an offer, though they can open the door so a licensee can show it.

Can my agent keep everything over the list price as commission?

No. BC's rules don't allow a commission based on the difference between your list price and the sale price. Commission is often a percentage of the sale price, or it can be a set dollar amount.

Getting ready to sell? See what it costs to sell a home in BC and the BC selling process from listing to completion, or request a free home evaluation.

This article is general information, not legal advice. The details come from BC's Real Estate Services Rules, BCFSA's guidance for consumers and real estate professionals and the Financial Consumer Agency of Canada, and were current at the time of writing. For BCFSA's licensee search, see Find a Professional.