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Working With a Realtor

Agency Relationship

Working With a Realtor®

When you engaged the help of a REALTOR®, you are gaining support to buy or sell your property. REALTOR® can guide you through every step of the process, explaining current market, help you understand and navigate paperwork and offer advice.

When working with a REALTOR®, it is important to understand who the REALTOR® works for. To whom is the REALTOR® legally obligated? The Canadian Real Estate Association (CREA) requires REALTORS® to disclose Agency Relationship to a potential client at the earliest time possible.

In real estate, there are different possible forms of agency relationship:
1. Buyer Representation
Real Estate Brokerage representing a buyer must do what is best for the buyer. A written contract, called a Buyer Representation Agreement, creates an agency relationship between the buyer and the brokerage, and establishes buyer representation. It also explains services the company will provide, establishes a fee arrangement for the REALTORs® services and specifies what obligations a buyer may have. Typically, buyers will be obliged to work exclusively with that company for a period of time. Confidences a buyer shares with the buyer’s agent must be kept confidential. Although confidential information about the buyer cannot be disclosed, a seller working with a buyer’s agent can expect to be treated fairly and honestly.

2. Seller Representation
A Real Estate Brokerage representing a seller must do what is best for the seller of a property. A written contract, called Listing Agreement, establishes seller agency. It also explains services the company will provide, establishes a fee arrangement for the REALTOR’s services and specifies what obligations a seller may have. A seller’s agent must tell the seller anything known about a buyer. For instance, if a seller’s agent knows a buyer is willing to offer more for a property, that information must be shared with the seller. Confidences a seller shares with a seller’s agent must be kept confidential from potential buyers and others. Although confidential information about the seller cannot be discussed, a buyer working with a seller's agent can expect fair and honest service from the seller’s agent and disclosure of pertinent information about the property.

3. Multiple Representation
Occasionally a Real Estate Brokerage will be the agent for both the buyer and the seller. The buyer and seller must consent to this arrangement in writing. Under this multiple representation arrangement, the brokerage must do what is best for both the buyer and seller. Since the brokerage's loyalty is divided between the buyer and seller who have conflicting interest, it is absolutely essential that a multiple representation be property documented. Representation Agreements specifically describes the rights and duties of everyone involved and any limitations to those rights and duties.