It’s always good practice to, when working with any professional, determine who that person is actually working for, and more importantly, to whom is the agent is legally obligated.
The Canadian Real Estate Association (CREA) requires all Real Estate Agents to disclose Agency Relationship to a potential client at the earliest time possible.
Buyers Relationship to Realtors®
As a Buyer you have the choice of two relationships with your real estate agent. As a Client, a real estate company acting as a Buyers Agent must do what is best for the buyer. A written contract, called a Buyer Agency Agreement, establishes what’s called buyer agency. It also explains services the company will provide, establishes a fee arrangement for the real estate agents services and specifies what obligations a buyer may have.
Under such agency, a buyer will be obliged to work with that Brokerage for the period of time agreed upon. In return, whatever a buyer shares with that brokerage will be kept confidential. The Agent is also required to offer professional advice, negotiate the best price for you, the buyer, and provide the buyer with as much information required to make the right decision as possible.
You definitely want someone on you side working in your corner. Click on the Buyer Representation Agreement for the consumer version of the agreement. Everything in red explains the legal context.
As a Customer the buyer can expect to be treated fairly and honestly. It is important for the buyer to realize that under such a relationship, the REALTOR® is technically a sub-agent of the seller so that duties are owed to that seller.
However, the buyer can expect the REALTOR® to disclose all pertinent information about a property, not to misrepresent any facts, and to honestly answer all questions about the property. Under such relationship with the buyer, the REALTOR® must not imply that they shall negotiate a price for the buyer as that would be a direct conflict with the REALTORs® sub-agency relationship with the seller and a violation of our rules and regulations.
Sellers Relationship to Realtors®
A real estate company must do what is best for the seller of a property. A written contract, called a Listing Agreement, establishes sellers agency. It also explains services the company will provide, establishes a fee arrangement for the REALTORs® services, and specifies what obligations a seller must have.
Confidence a seller shares with their REALTOR® must be kept confidential from potential buyers and others. That REALTOR® must tell the seller anything known about the buyer. For instance, if the REALTOR® knows that a buyer is willing to offer more for a property, that information must be shared with the seller.
Sellers Relationship to Realtors®
A seller must understand that a REALTOR® working with a buyer as a sub-agent is ultimately working with the sellers best interest in mind. A REALTOR® working with a buyer, as a Buyer Agent, is working for the buyers best interest mind, but may still be compensated by the seller through provisions made to the Listing Agent.
Occasionally, a real estate company will be the agent for both the buyer and the seller. The buyer and seller must consent to this arrangement in their listing and buyer agency agreements. Under this multiple representation arrangement, the company must do what is best for both the buyer and seller.
Since the company’s loyalty is divided between the buyer and seller who have conflicting interest, it is absolutely essential that a multiple representation relationship be established in a written agency agreement. This agreement specifically describes the rights and duties of everyone involved and any limitations to those rights and duties.
About Jethro Seymour
Jethro Seymour, one of the Top Toronto Real Estate Brokers at Royal LePage RES Ltd., Johnston & Daniel Division. Jethro Seymour is a midtown Toronto residential specialist with over 20 years of sales experience in; real estate, marketing, construction and publishing. He has helped many families find homes in Toronto’s great neighbourhoods, and has extensive knowledge of local markets, new home construction, resale home sales, and the condo market. Living in midtown Toronto, Jethro previews many of the homes that come to market for his clients and inventory knowledge. Jethro specializes in Midtown, Davisville Village and Leaside neighbourhoods. For more information, call Jethro Seymour, Broker at 416-712-0767, or email [email protected].