December 1st - 2006

Full price not the full story

The REALTOR® had a Listing Agreement for $123,900 and presented an offer for $120,000 which the seller refused, insisting that she wanted her full asking price. Several days later the REALTOR® presented a second offer from the same buyer for the full asking price.

The REALTOR® said that "these were the normal warranties that agents put in." The seller had indicated in the Seller Property Information Statement that she was unaware of any problems with either the quality or quantity of the water. The judge said that "it is one thing to state that one is not aware of any problem with the water and quite another thing to warrant as a positive fact that there is no problem. Absent fraud or willful blindness, no liability attaches to stating a simple fact; giving an unqualified warranty exposes the seller to potential liability. Such an offer with those conditions and warranties was not agreed to by the seller. They are not within the terms of the Listing Agreement. The REALTOR® is not entitled to commission despite the fact that it was full price offer.”

Bird v. Ireland, 2005 CanLII 44382 (ON S,C.D.C.)

MERV'S COMMENTS

A full price offer is not the full story. The entire Listing Agreement must be read to determine if a conditional offer meets its terms, especially if the offer is one that the seller will not accept - as she is entitled to do. Here is how the OREA Listing Agreement (Form 200) states it: "In consideration of your listing the Property, I agree to pay the Listing Broker a commission of .... for any valid offer to purchase or lease the Property from any source whatsoever obtained during the Listing Period and on the terms and conditions set out in this Agreement OR such other terms and conditions as I may accept."

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Ontario Real Estate Association

Jean-Adrien Delicano

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416-445-9910 ext. 246

Ontario Real Estate Association
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