WHAT IS IT?
It’s an agreement that works in favour of buyers, guaranteeing the very best in real estate service.
The Real Estate Council of Ontario (RECO), a public agency formed to protect consumers and regulate the industry, introduced guiding principles mandating that REALTORS® ask their clients to sign a Written Representation Agreement at the earliest possible time.
When choosing representation, homebuyers have the option to sign either a Buyer Representation Agreement or a Buyer Customer Service Agreement.
The Buyer Representation Agreement signifies that for a designated period of time, the buyer has engaged a specific REALTOR® firm to work exclusively on his or her behalf at finding a property. The agreement confirms the REALTOR®’s commitment to make his or her best efforts for the buyer. It also explains services the brokerage will provide, establishes a fee arrangement for the REALTOR’s services and specifies what obligations a buyer may have.
FORMS OF REPRESENTATION
The Buyer Representation Agreement creates an agency relationship between the buyer and the brokerage, and establishes buyer representation.
Multiple Representation
Occasionally a real estate brokerage will represent both the buyer and the seller. The buyer and seller must consent to this arrangement in writing. Under a Multiple Representation arrangement, the brokerage must do what is best for both the buyer and the seller. Since the brokerage’s loyalty is divided between the buyer and the seller who have conflicting interests, it is absolutely essential that a Multiple Representation relationship be properly documented. Representation agreements specifically describe the rights and duties of everyone involved and any limitations to those rights and duties.
Buyer Customer Service Agreement
A real estate brokerage may provide services to buyers and sellers without creating buyer or seller representation. This is called “customer service.” Under this arrangement, the brokerage can provide many valuable services in a fair and honest manner. This relationship can be set out in a buyer or seller customer service agreement. Real estate negotiations are often complex and a brokerage may be providing representation and/or customer service to more than one seller or buyer. The brokerage will disclose these relationships to each buyer and seller.
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 representing them. Or, some buyers choose to contact the seller's agent directly. Under this arrangement the REALTOR is representing the seller, and must do what is best for the seller, but may provide many valuable customer services to the buyer.
