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When working with a REALTOR, it is important to understand who
the REALTOR works for, and to whom is the REALTOR legally
obligated. The Canadian Real Estate Association (CREA) requires
REALTORS to disclose Agency Relationship to a potential client
at the earliest time possible.
Buyer’s Relationship to Realtors (A Buyer has a choice of two relationships with a REALTOR)
As a Client, a real estate company acting as a “Buyer’s 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 REALTOR’s 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 REALTOR’s sub-agency relationship
with the seller and a violation of our rules and regulations.
Seller’s 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 seller’s agency. It also explains services the
company will provide, establishes a fee arrangement for the
REALTOR’s 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 seller’s best
interest in mind. A REALTOR working with a buyer, as a Buyer
Agent, is working for the buyer’s 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.
Since the company’s loyalty is divided between the buyer and
seller who have conflicting interest, it is absolutely essential
that a multiple representation relationship be established in a
written agency agreement. This agreement specifically describes
the rights and duties of everyone involved and any limitations
to those rights and duties.
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