|Working with a REALTOR™
The Agency Relationship
When working with a REALTOR™, it is important to understand who the REALTOR™ works for. To whom is the REALTOR™ legally obligated? REALTOR™S are obliged to disclose in writing to all parties their agency position in a transaction.
Honesty and Integrity
Most real estate professionals are members of the Ontario Real Estate Association (OREA) and only members of the OREA can call themselves REALTORS.
When you work with a REALTOR, you can expect not only strict adherence to provincial laws, but also adherence to a Code of Ethics. And that code is very important to you because it 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. That is only the beginning:in the first two years of practice, registrants are required to successfully complete three additional courses as part of their articling with an experienced broker. In addition, all registrants must continue to attend courses throughout their careers in order to maintain their registration.
In Real Estate, there are different possible forms of agency relationship:
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 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 seller's agent must be keep 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 confidential.
Although confidential information about the buyer cannot be disclosed, a seller working with 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 seller. The buyer and seller must consent to this arrangement in writing. Under this dual representation arrangement, the brokerage must do what is best for both the buyer and seller.
Since the brokerage’s loyalty is divided between the buyer and the seller who have conflicting interests, it absolutely essential that a dual representation relationship is 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.