Working with a Realtor

Realtors are governed by the legal concept of "agency".  An agent is legally obligated to look after the best interests of the person he or she is working for.  The agent must be loyal to that person.

A real estate company may be your agent - if you have clearly established an agency relationship with that Realtor.  But often, you may assume such an obligation exists when it does not.

Realtors believe it is important that the people they work with understand when an agency relationship exists and when it does not - and understand what it means.

In real estate, there are different possible forms of agency relationship:

Vendor's Agent
When a real estate company is a "vendor's agent", it must do what is best for the vendor of a property.

A written contract, called a listing agreement, establishes vendor agency.  It also explains services the company will provide, establishes a fee arrangement for the Realtor's services and specifies what obligations a vendor may have.

A vendor's agent must tell the vendor anything known about a purchaser.  For instance, if a vendor's agent knows a purchaser is willing to offer more for a property, that information must be shared with the vendor.

Confidences a vendor shares with a vendor's agent must be kept confidential from potential purchasers and others.

Although confidential information about the vendor cannot be discussed, a purchaser working with a vendor's agent can expect fair and honest service from the vendor's agent and disclosure of pertinent information about the property.

Purchaser's Agent
A real estate company acting as a "purchaser's agent" must do what is best for the purchaser.

A written contract, called a buyer agency agreement, establishes purchaser agency.  It also explains services the company will provide, establishes a fee arrangement for the Realtor's services and specifies what obligations a purchaser may have.  Typically, purchasers will be obliged to work exclusively with that company for a period of time.

Confidences a purchaser shares with a purchaser's agent must be kept confidential.

Although confidential information about the purchaser cannot be disclosed, a vendor working with a purchaser's agent can expect to be treated fairly and honestly.

Dual Agent
Occasionally a real estate company will be the agent of both the purchaser and vendor.  The purchaser and vendor must consent to this arrangement in their listing and buyer agency agreements.  Under this "dual agency" arrangement, the company must do what is best for both the purchaser and vendor.

Since the company's loyalty is divided between the purchaser and the vendor who have conflicting interests, it is absolutely essential that a dual agency relationship be establisher in writing and specifically describes the rights and duties of everyone involved.

Who's working for you?
Often a purchaser will work with one company and a vendor will work with another.  It may appear the Realtor working with the purchaser is working for that purchaser in an agency relationship.  That is not necessarily the case.

The Realtor working with a purchaser may be a "sub-agent" of the vendor.  In this case, the Realtor is actually a vendor's agent.  While a vendor's agent can provide many valuable services to a purchaser, he or she must do what is best for the vendor.

This information was provided courtesy of OREA from their brochure, Working with a Realtor - The Agency Relationship.

Ontario Real Estate Association
99 Duncan Mill Road
Don Mills, Ontario
M3B 1Z2
Tel: 416-455-9910
Fax: 416-445-2644

Honesty and Integrity
Most real estate professionals in our province are members of the Ontario Real Estate Association (OREA) and only members of OREA can call themselves Realtors.

When you work with a Realtor, you can expect not only strict adherence to provincial laws, but also adherence to a Code of Ethics.  And that code is very important to you - because it assures you will receive the highest level of service, honesty and integrity.

Highest Professional Standards
Before receiving a real estate license, candidates must successfully complete an extensive course of study developed by OREA on behalf of the Real Estate Council of Ontario.  That is only the beginning: in the first two years of practice, licensees are required to successfully complete three additional courses as part of their articling with an experienced broker.  In addition, all licensees must continue to attend courses throughout their careers in order to maintain their license.

 

 

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