Agency Relationships Explained
When choosing Mary Dempster you can be confident knowing that she is working for you.
WHO'S WORKING FOR YOU?
Realtors in Ontario are governed by the legal concept of “agency.” An agent is legally obligated to look after the best interests of the person he or she is representing. In other words, the agent must be loyal to you.
In buying or selling property it’s important that you understand for whom each real estate agent is working. For example, in many cases, both the seller and the buyer may have their own agent. However, in some cases, buyers may choose to contact the seller’s agent directly. Under this arrangement, the real estate agent is working for the seller, and must do what is best for the seller, but may also provide customer service to a buyer.
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A real estate agent acting as a “buyer’s agent” must do what is best for the buyer.
A written contract, called a Buyer Representation Agreement, establishes buyer agency. It also explains what services the company will provide, establishes a fee arrangement for these services and specifies what obligations a buyer may have
Typically, buyers will be obligated to work exclusively with that company for a period of time and anything a buyer shares with the agent must be kept confidential. In most transactions, the buyer’s agent is paid by the seller through the MLS system and there is no cost to the buyer.
When a real estate agent is a “seller’s agent,” he or she must do what is best for the seller of a property.
A written contract, called a Listing Agreement, establishes seller agency. It also explains what services the company will provide, establishes a fee arrangement for those 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. However, information a seller shares with a seller’s agent must be kept 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 and disclosure of pertinent information about the property.
A real estate agent may provide services to buyers without creating buyer representation. This is called customer service.
Under this arrangement, the agent can provide valuable services in a fair and honest manner to a buyer while still acting in the best interests of the seller under seller’s agency.
A buyer working with an agent in a customer service relationship must be careful what they disclose to that agent, who is obligated to reveal everything to his sellers.