In Real
Estate, there are different possible forms of Agency Relationship:
1.
Seller’s Agent
When
a Real Estate company is a “Seller’s Agent”, it must do what is best
for
the Seller of the property.
A written
contract, called a Listing Agreement, establishes Seller Agency. It
also
explains services the company will provide, 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 the 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 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 from
the
Seller’s Agent and disclosure of pertinent information about the
property.
2.
Buyer’s Agent
A
Real Estate company acting as a “Buyer’s Agent” must do what is best
for
the Buyer.
A written
contact, called a Buyer Agency Agreement, establishes Buyer Agency. It
also explains the services the company will provide, establishes a fee
arrangement for the REALTOR’s 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.
Confidences
a Buyer shares with the Buyer’s Agent must be kept confidential.
Although,
confidential information about the Buyer cannot be disclosed, a Seller
working with a Buyer’s Agent can expect to be treated fairly and
honestly.
3.
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 “Dual Agency” arrangement, the
company must do what is best for both the Buyer and the Seller.
Since
the companies loyalty is divided between the Buyer and the Seller who
have
conflicting interests, it is absolutely essential that a Dual Agency
relationship
be established in written agency agreement. This agreement specifically
describes the rights and duties of everyone involved and any
limitations
to those rights and duties.
Who’s
working for you?
It
is important that you understand who the REALTOR is working for. For
example,
both the Seller and the Buyer may have their own Agent which means they
each have a REALTOR who is working for them.
Or,
some Buyer’s choose to contact the Seller’s Agent directly. Under this
arrangement the REALTOR is working for the Seller, and must do what is
best for the Seller, but may provide many valuable services to the
Buyer.
A REALTOR
working with a Buyer may even be a “Sub-Agent” of the Seller. Under
Sub-Agency,
both the Listing Agent and the Co-operating Agent must do what is best
for the Seller even though the Sub-Agent may provide many valuable
services
to the Buyer.
If
the Seller and the Buyer have the same Agent, this is Dual Agency and
the
REALTOR is working for both the Seller and the Buyer.
Code
of Ethics
REALTORS
believe it is important that people they work with understand their
agency
relationship. That’s why Agency Disclosure is included in a self
imposed
Code of Ethics which is administered by the Real Estate Council of
Ontario.
The Code requires REALTORS to disclose in writing the nature of the
services
they are providing, and encourages REALTORS to obtain written
acknowledgement
of that disclosure. The Code also requires REALTORS to enter into a
written
Agency Agreement with any Seller’s or Buyer’s they are representing.
Honesty
and Integrity
Most
Real Estate professionals in our province are members of the Ontario
Real
Estate Association (OREA) and only members of OREA may 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 license, 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 practise, licensees are required to successfully complete three
additional
courses as part of their articling with an experienced Broker. In
addition,
all licensees must continue to attend courses throughout their careers
in order to maintain their license.
Want
More Information?
Visit
http://www.orea.com/
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