When working with a Real Estate Agent, it is important to understand who Bhe/she works for, and to whom is the Agent legally obligated. The Canadian Real Estate Association (CREA) requires Real Estate Agents to disclose Agency Relationship to a potential client at the earliest time possible.

Buyers

you have a choice between being a Client or a Customer.

Let's look at the difference:

Client

As a Client, a Real Estate Agent, acting as a “Buyer’s Agent” must do what is best for the Buyer. A written contract, called a Buyer Agency Agreement (B.R.A), establishes Buyer Agency. It also explains services the Company will provide, spells out who will pay 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. Any confidential information the Buyer shares with his/her Agent, will be kept confidential The Agent 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.

Customer

As a Customer the Buyer can expect to be treated fairly,honestly and with intergity. It is important for the Buyer to realize that under such a relationship the Real Estate Agent is technically a Sub-Agent of the Seller so that duties are owed to that Seller. However, the Buyer can expect the Agent to disclose all pertinent information about a property, not to misrepresent any facts, and to honestly answer all questions about the property.  

The Seller’s relationship to the Real Estate Agent:

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 Agent’s services and specifies what obligations a Seller must have. 

Confidence a Seller shares with their Agent must be kept confidential from potential Buyers and others. The Agent must tell the Seller anything known about the Buyer. For instance, if the Agent 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 an Agent working with a Buyer as a Sub-Agent is ultimately working with the Seller’s best interest in mind. An Agent working with a Buyer, as a Buyer Agent, is having the Buyer’s best interest in mind, but may still be compensated by the Seller through provisions made to the Listing Agent.

Dual Agent or Multiple Representation

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 Seller.

Since the Company’s loyalty is divided between the Buyer and Seller who have conflicting interest, it is absolutely essential that a Dual Agency 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.