Advice needed!

[lxy]

Hi,



I am a newbie in Real Estate and took my 1st step by attending a seminar held by a local Real Estate agent. The name of the seminar is "how to increase wealth in Real Estate", but it didn't talk about "how to invest". At the end of the seminar, we were asked to fill out a card with our info,including financial info and the option to request a consultation with the agent and its affiliated mortgage specialist.



Since I didn't learn "how to invest" from the seminar, I requested a consultation, but it turned out the purpose of the consultation was to sign a Buyer Representation Agreement. Well, this is my 1st time doing this, so I am a bit skeptical, because the agreement states that if the listing agent or seller failed to pay the agent the commission, I, as a buyer would have to pay it instead. My concern is that I have no control if the seller or listing agent is not going to pay my agent, especially in the case of a new condo, I cannot guarantee that the builder is going to pay a commission since the builder can sell the condo itself, this means that as a buyer, I have to compensate the agent under the agreement. It seems to not make sense.



Lastly, signing the Buyer agreement will allow me to become a VIP buyer to receive VIP listings. At the moment, I have filled their online form a number of times and have not yet received any listings and I think this is because the Buyer agreement is not signed.



Should I sign the Buyer agreement? Is this VIP buyer "program" common in practice? Any advice is greatly appreciated.

 

[Thomas Beyer]

What they want to avoid is you buying directly from the builder once they introduce you to a project, cutting them out. I can understand that. So, IF your intent is to buy a brand new condo, 1-3 years before they are ready, then I see no harm in signing it after careful review.



Likely this is for (overpriced) condos. Unclear what kind of condos they are selling. Is this in Toronto ? The market is somewhat saturated and overpriced, so why not flog (overpriced) condos to newbie's with the illusion you are "so special" and get a big discount to the retail investors ?



The VIP route works in a hot market where you can flip the condo out before construction is finished, say a year or 2 weeks later, for a 10K to 100K profit. I doubt the current market is like that.



Therefore I would not be too concerned about the contract, but the asset being acquired. If for your own use, in a prime location where you might want to live yourself for 4-6 years .. why not. As an investment: highly doubtful, as too many condos will come back on the market after sales below the purchase price in the next 1-3 years in Vancouver and Toronto. Thus, you must be able to hold through that flood of inventory, by renting or living there yourself.



Consider buying a cash-flowing asset, perhaps in W-Canada or in some ON town with growth prospects (outside of GTA) instead.




Consider joining REIN if you seek true education and envision getting involved with multiple assets over the next few years. You can make a ton of money in real estate, but it takes a lot of skills and time, and not every person wishes to invest both.

 

[GaryMcGowan]

[quote user=lxy]

The name of the seminar is "how to increase wealth in Real Estate", but it didn't talk about "how to invest". At the end of the seminar, we were asked to fill out a card with our info,including financial info and the option to request a consultation with the agent and its affiliated mortgage specialist.



Since I didn't learn "how to invest" from the seminar, I requested a consultation,




If learning "How to Increase Wealth in Real Estate" is what you are truly seeking, then I would not sign any documents with the agent. Seek out local Real Estate Investing Groups that do offer the education and not through the smoke and mirrors of a sales pitch. There is some great information on this website for starters.