Agency Relationships

The relationship between a real estate brokerage and a client is called an “agency” and there are three kinds of agency relationships.



You sign a Listing Agreement with a salesperson/broker employee of a real estate brokerage firm. Your contract is with the listing company; your salesperson acts for the listing company in representing your best interests. The Company works for your benefit; does not disclose your confidential information to others and endeavours to unearth all information that would be of benefit to you.



Licenced Realtors are expected by RECO (Real Estate Council of Ontario) to explain the two representation options open to Buyers before counselling them. The most commonly chosen option is a CLIENT relationship. The Buyer signs a Buyer Representation Agreement with the Brokerage firm’s representative creating a fiduciary agency between the Buyer and the Brokerage. This document mirrors the Listing Agreement Sellers sign when engaging a brokerage to sell their property. As a client of the Brokerage, your salesperson will represent your best interests; will not disclose your confidential information and endeavour to unearth all information beneficial to you.

Less common is a CUSTOMER relationship. Here the salesperson works by default for the best interests of the Seller as a sub-agent of the Listing Brokerage. In this instance, the salesperson’s obligations to you are fairness, honesty and integrity. There is no fiduciary relationship.



When the Buyer and the Seller are under contract to the same brokerage company, the law states that Multiple Representation is taking place. Both Buyer and Seller must acknowledge that there is no conventional separation where the representation of the parties’ best interests are concerned. With Multiple Representation, it is expected that information will be shared with the exception of what a Buyer might ultimately be willing to pay and what a Seller might ultimately be willing to take. While this may seem problematic, in reality it need not be an issue. We look forward to explaining the nuances with you in person.

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