Working With A Realtor
The Real Estate Council of Ontario (RECO) is the governing body which sets enforceable standards of conduct for every salesperson and broker licensed under the Real Estate and Business Brokers Act in Ontario. On May 20, 1999, RECO implemented a new Code of Ethics to be complied with by every licensed Realtor in Ontario.
The Different Forms of Agency Relationships:
- Sellers Agent
When a real estate company is a "Seller's Agent", it must do what is best for the Seller of a property. 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. However, confidences a Seller shares with the Seller's agent must be kept confidential from potential purchasers and others. A buyer can expect fair service and disclosure of pertinent information about a property; nothing will be misrepresented about a property and all questions will be answered honestly by the Seller's Agent.
- Buyer's Agent
A real estate company acting as a "Buyer's Agent" must do what is best for the Buyer. A written contact establishes Buyer agency. It also explains services the Realtor will provide, spells out who will pay and specifies what obligations a Buyer may have. Typically, Buyers will be obliged to work exclusively with that Realtor for a period of time. a Realtor working for a Buyer will keep information about the Buyer confidential from the Seller.
- Dual Agent
Occasionally a real estate company will be the Agent of both the Buyer and Seller (A buyer whom it represents wants to buy a property listed with the same company.) Under this "Dual Agency" arrangement, the Realtor must do what is best for both the Seller and buyer. A dual Agent must fully disclose information to both the Buyer and Seller. No information will be confidential. A Realtor can be a Dual Agent only if both the Buyer and Seller agree by signing a standard OREA Confirmation of Co-operation and Representation form.
Who Pays ?
Usually, the Realtor will be paid BY THE SELLER from the proceeds of the sale, regardless of the form of agency which applies. The listing agreement states the selling Realtor's fee to be paid by the SELLER.
Note
It may appear that the Realtor working with a buyer is working for
that Buyer in an agency relationship, but that is not necessarily the case. Unless
the Buyer has signed a Buyer Agency Agreement with the Broker, the Buyer does not have
representation. The agent working with them is deemed to be working for the Seller,
and while a Seller's Agent can provide many valuable services to a buyer, he or she must
ultimately do what is best for the Seller.
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