Working With A Realtor

When real estate professionals work with sellers and buyers, "agency" relationships are established. As you start working with a real estate professional, please ask for a clear explanation of the current agency laws in your province, so that you understand these important issues.

1.    Seller's/Landlord's Agent
When a real estate company is a "seller's/landlord's agent", it must do what is best for the seller/landlord of a property.

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

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

Confidences a seller/landlord shares with a seller's/landlord's agent must be kept confidential from potential buyers/tenants and others.

Although confidential information about the seller/landlord cannot be discussed, a buyer/tenant working with a seller's/landlord's agent can expect fair and honest service from the seller's/landlord's agent and disclosure of pertinent information about the property.

2.    Buyer's/Tenant's Agent
A real estate company acting as a "buyer's/tenant's agent" must do what is best for the buyer/tenant.

A written contract, called a buyer/tenant agency agreement or mandate agreement, establishes buyer/tenant agency. It also explains services the company will provide, establishes a fee arrangement for the REALTOR's services and specifies what obligations a buyer/tenant may have.

Typically, buyers/tenants will be obliged to work exclusively with the company for a period of time.

Confidences a buyer/tenant shares with the buyer's/tenant's agent must be kept confidential.

Although confidential information about the buyer/tenant cannot be disclosed, a seller/landlord working with a buyer's/tenant's agent can expect to be treated fairly and honestly.

3.    Dual Agent
Occasionally a real estate company will be the agent of both the buyer/tenant and the seller/landlord. The buyer/tenant and seller/landlord must consent to this arrangement in their and buyer agency or mandate agreements. Under this "dual agency" arrangement, the company must do what is best for both buyer/tenant and the seller/landlord.

Since the company's loyalty is divided between the buyer/tenant and the seller/landlord who have conflicting interests, it is absolutely essential that a dual agency 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.

Who's Working For You?
It is important that you understand who the REALTOR is working for. For example, both the seller/landlord and the buyer/tenant may have their own agent which means they each have a REALTOR who is working for them.

Or, some buyers/tenants choose to contact the seller's/landlord's agent directly.  Under this arrangement the REALTOR is working for the seller/landlord, and must do what is best for the seller/landlord, but may provide many valuable services to the buyer/tenant.

A REALTOR working with a buyer/tenant may even be a "sub-agent" of the seller/landlord. Under sub-agency, both the listing agent and the co-operating agent must do what is best for the seller/landlord even though the sub-agent may provide many valuable services to the buyer/tenant. If the seller/landlord and the buyer/tenant have the same agent, this is dual agency and the REALTOR is working for both the seller/landlord and the buyer/tenant.

Code of Ethics
REALTORS believe it is important that the people they work with understand their agency relationship. That's why agency disclosure is included in a self-imposed Code of Ethics which is administered by the Real Estate Council of Ontario. The Code requires REALTORS to disclose in writing the nature of the services they are providing, and encourages the REALTORS to obtain written acknowledgement of that disclosure. The Code also requires REALTORS to enter into a written agency agreement with any sellers/landlords or buyers/tenants
 they are representing.

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