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

 

Buyers Relationship to Realtors

 

A Buyer has a choice of two relationships with a REALTOR®.

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 buyer agency. It also explains services the company will provide, establishes the fee arrangement for the REALTORs services and specifies what obligations the Buyer has. Under such agency, the buyer will be obliged to work with that company for a certain period of time. In return, confidence a buyer shares with that company will be kept strictly confidential. The REALTOR® is also required to offer professional advice, negotiate the best price for the buyer and provide the buyer with as much information required to make the right decision.

 

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 working for the seller because he will be 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 the fee arrangement for the REALTORs services and specifies what obligations a seller has. Anything the seller shares with their REALTOR® must be kept confidential from potential buyers and others. That REALTOR® must also 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. 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.

 

However, a REALTOR® representing a buyer as a "CLIENT" must have the buyers best interest mind, but may still be compensated by the seller through provisions made to the Listing Agent.

 

Dual 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. This must be a written agreement specifically describing the rights and duties of everyone involved and any limitations to those rights and duties.