1. Seller representation
When a real estate brokerage represents a seller, it must do what is best for the
seller of a property.
A written contract, called a listing agreement, creates an agency relationship
between the seller and the brokerage and establishes seller representation. It
also explains services the brokerage 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.
2. Buyer representation
A 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 brokerage will provide, establishes a
fee arrangement for the REALTOR�?s services and specifies what obligations a
buyer may have.
Typically, buyers will be obliged to work exclusively with that brokerage 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.
3. Multiple representation
Occasionally a real estate brokerage will represent 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 the seller.
Since the brokerage?s loyalty is divided between the buyer and the seller who
have conflicting interests, it is absolutely essential that a multiple representation
relationship be properly documented. Representation agreements specifically
describe the rights and duties of everyone involved and any limitations to those
rights and duties.
4. Customer service
A real estate brokerage may provide services to buyers and sellers without
creating buyer or seller representation. This is called ?customer service.?
Under this arrangement, the brokerage can provide many valuable services in a
fair and honest manner. This relationship can be set out in a buyer or seller
customer service agreement. Real estate negotiations are often complex and a
brokerage may be providing representation and/or customer service to more
than one seller or buyer. The brokerage will disclose these relationships to each
buyer and seller.
Who's working for you?
It is important that you understand who the REALTOR� is working for. For
example, both the seller and the buyer may have their own agent which means
they each have a REALTOR� who is representing them.
Or, some buyers choose to contact the seller's agent directly. Under this
arrangement the REALTOR� is representing the seller, and must do what is best
for the seller, but may provide many valuable customer services to the buyer.
A REALTOR� working with a buyer may even be a ?sub-agent? of the seller.
Under sub-agency, both the listing brokerage and the co-operating brokerage
must do what is best for the seller even though the sub-agent may provide many
valuable customer services to the buyer.
If the brokerage represents both the seller and the buyer, this is multiple
representation.
Code of Ethics
REALTORS� believe it is important that the people they work with understand
their agency relationship. That?s why requirements and obligations for
representation and customer service are included in a 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 REALTORS� to obtain written acknowledgement of
that disclosure. The Code also requires REALTORS� to submit written
representation and customer service agreements to buyers and sellers.
Acknowledgement by
__________________________________________________________________
(Names)
I/we have read and understand the Working with a REALTOR - The Agency
Relationship brochure:
Buyers
As buyer(s), I/we understand that
__________________________________________________________________
(Name of Brokerage)
Is (initial one)
______ Representing my interests, to be documented in a separate written agency
representation agreement, and I understand the brokerage may represent
and/or provide customer service to other buyers and sellers.
______ Not representing my interests, to be documented in a separate written
customer service agreement, but will act in a fair, ethical and professional
manner.
__________________________________________________________________
Signature Date
Sellers
As seller(s) I/we understand that:
__________________________________________________________________
(Name of Brokerage)
Is (initial one)
_______ Representing my interests, to be documented in a separate written agency
representation agreement, and I understand the brokerage may represent
and/or provide customer service to other sellers and buyers.
_______ Not representing my interests, to be documented in a separate written
customer service agreement, but will act in a fair, ethical and professional
manner.
__________________________________________________________________
Signature Date
In real estate, there are different possible forms of agency relationship:
This form is for information only and is not a contract.
For the purposes of this information, the term ?seller? can be interpreted as ?landlord? and ?buyer? can mean ?tenant?
WEBForms T M Jan/2008
