Agency Relationship

Working with a REALTOR

When working with a Realtor it is important to understand who the Realtor works for. 
Realtors are governed by the legal concept of “agency”. An agent is legally obligated to look after the best interest of the person he or she represents. The agent must be loyal to that person. 
We as Realtors believe it is important that the people we work with understand when an agency relationship exists and when it does not - and to also understand what the relationship means

Client Relationship

A “client” relationship creates the highest form of obligation for a Realtor to a consumer (buyer or seller). The brokerage and it’s salespeople have a fiduciary (legal) relationship with the client and represents the interests of the client in a real estate transaction.

This relationship can be established by the use of a representation agreement, called a Listing Agreement for the seller and a Buyer Representation Agreement for the buyer. 
These agreements contain:
- An explanation of the services the brokerage will be providing
- The fee arrangement for those services
- The obligations of the client under agreement
- The expiry date of the agreement


Once a client relationship is established between brokerage and consumer, the brokerage must protect the interests of the client, strive for the benefit of the client, do what is best for the client and must not disclose a client’s confidential information to others. The brokerage must also make reasonable effort to determine any material facts relating to the transaction and must inform the client of such facts.
Although the brokerage is representing the interest of their client, they must still treat all parties in the transaction with fairness, honesty and integrity.

Customer Relationship

A buyer or seller may not wish to be under contract as a client with the brokerage but would rather be treated as a “customer”.
The Realtor is obligated to treat every person in a transaction with honesty, fairness and integrity but unlike a client, the Realtor provides a customer relationship with a restricted level of service. 

Brokerages use a Customer Service Agreement to document the services they are providing to a buyer or seller customer.
The Realtor has disclosure obligations to a customer and must disclose material fact known to the brokerage that relate to the transaction.

Dual Relationship...what happens when...?

Dual Relationship, or Multiple Representation, occurs when the brokerage represents both the seller and the buyer in a transaction.

Realtors and their brokerage must make sure all buyers, sellers and their realtors confirm in writing that they acknowledge, understand and consent to the situation before an offer is made. A document called the Confirmation of Co-operation and Representation is typically used in this situation.

The brokerage must not disclose:
- The motivation of the buyer or seller
- Any personal information of the buyer or seller
- The price the buyer should offer or the price the seller should accept


However, it is understood that factual market information about comparable properties and information known to the brokerage concerning the property will be disclosed to both buyer and seller to assist them to come to their own conclusions.

Honesty and Integrity

Most real estate professionals in our province are members of the Ontario Real Estate Association (OREA). Only members of OREA can call themselves REALTORS.

When you work with a REALTOR, you can expect strict adherence to provincial laws, which include a Code of Ethics. That code assures you will receive the highest level of service, honesty and integrity

Highest Professional Standards

Before receiving a real estate registration, candidates must successfully complete an extensive course of study developed by OREA on behalf of the Real Estate Council of Ontario. Ongoing educational courses are mandatory in order to maintain registration to ensure your Realtor is proficient with the latest trends and technology.

To ensure the best possible real estate experience, be sure to understand the nature of your relationship with your Realtor and the services they will provided. Make sure you ask your Realtor all of your questions and those questions are answered or explained. Be sure you read and understand every contract before you finalize it.