The following should give you a good idea about what is involved in working with a REALTOR®.
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 a fee arrangement for the REALTORs® services and specifies what obligations a buyer may have. Under such agency, a buyer will be obliged to work with that company for a period of time. In return, confidence a buyer shares with that company will be kept 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 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 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.
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 a fee arrangement for the REALTORs® services and specifies what obligations a seller must have.
Confidence a seller shares with their REALTOR® must be kept confidential from potential buyers and others. That REALTOR® must 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. A REALTOR® working with a buyer, as a Buyer Agent, is working for the buyers best interest mind, but may still be compensated by the seller through provisions made to the Listing Agent.
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.
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 subagent 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.
*Source: Working with a Realtor, OREA TREB Form 345 Rev. 2008