This article on Agency Relationships was written by Terry Landon, Broker
RE/MAX Cornwall Realty Inc., Real Estate Brokerage

The REAL ESTATE COUNCIL OF ONTARIO requires that: (1) A salesperson shall provide in a timely manner to all Buyers and Sellers with whom the salesperson works: a meaningful explanation of agency relationships in real estate transactions; and a completed agency disclosure form indicating whom the Real Estate Company and its Salesperson shall represent in a real estate transaction. (2) A salesperson who begins working with a potential Buyer shall provide to the potential Buyer a completed agency disclosure form at the first substantive contact and must establish at that time of contact whether Buyer will be customer or client.

When you choose to work with a real estate salesperson, he or she may or may not be "your" agent. An agent owes certain duties to a client but has a different obligation to a customer. You must know whether you are a customer or a client of a salesperson in a real estate transaction and that relationship must be established and disclosed prior to beginning to work together.

You should discuss the following information with the real estate salesperson with whom you may work in order to make informed decisions.

Who is a customer?
A customer is a person who seeks to buy or sell real estate, but who does not establish an agency relationship with a brokerage and, therefore, is not represented by a salesperson as his or her agent.

As a customer you cannot expect the salesperson to act as your agent or to negotiate on your behalf. A real estate salesperson can, however provide valuable market information and services to assist you as a customer. A salesperson is also obligated by law to treat customers honestly, to disclose known material facts about the property and to promptly present all offers and counter offers.

When selling or buying real estate, you may decide you don't need your own agent. The salesperson may be able to provide you as a customer with all the information and assistance you require to successfully complete a transaction. However, if you are a customer, the salesperson's primary loyalty is not to you. It is to his or her client. The agent must convey all known information to his or her client, such as a Seller's urgency to move if he or she represents a Buyer/client or a Buyer's willingness to increase an offer if he or she represents a Seller/client.

Who is a Client?
A client is a person who establishes an agency relationship with and agrees to be represented by an agent in a real estate transaction.

A Seller becomes a client of a real estate company by signing a formal listing agreement with a salesperson associated with the company. Prior to any transaction, this agreement must be in writing and must clearly establish the terms of the agreement and the obligations of both the Seller and the salesperson/company who becomes the agent for the Seller.

A Buyer becomes a client of a real estate company by signing a formal Buyer agency agreement with a salesperson associated with the company. Prior to any transaction this agreement must be in writing and must clearly establish the terms of the agreement and the obligations of both the Buyer and the salesperson/company who becomes the agent for the Buyer.

Who is an Agent?
An agent is the company/salesperson who by mutual agreement will act on your direction and represents your interest above all others in a real estate transaction. Once an Agency relationship is created, the broker in charge of the company is considered to be the agent of the client and all salesperson with the company become sub-agents of the broker representing the same client, although usually, you will work with one salesperson only.

Acting on your behalf, your agent/salesperson will negotiate for you the best price and terms in a real estate transaction. Your agent owes utmost loyalty to you, the client, and must pass on to you any information he or she knows which might influence your decision to buy or sell. You can rely on your agent to preserve confidential information provided by you. In short the primary duties of an agent/salesperson to his/her client are: Competence, Obedience, Disclosure and Accountability.

What is a Dual Agent?
In certain situations, a salesperson acts as an agent for and may represent the Buyer and Seller in the same transaction, provided each has consented in writing prior to the transaction. This is called Dual Agency since one agent represents both parties and both remain clients' of the company. The possibility and consequences of such an occurrence must be explained to you by the salesperson.

In most instances, the Buyer, Seller and Agent agree to amend their respective agreements to permit Dual Agency and to limit the Agent's responsibility. You should know that working with a dual agent is not the same as having your own exclusive agent; for instance, when representing both a Buyer and a Seller, the dual agent must not disclose to any party confidential information obtained from the other party. Also, a dual agent may not be the advocate for either party and cannot negotiate for nor advise either as to price or terms.

It is important that you discuss dual agency with the salesperson in order to understand the limits of representation, which a dual agent can provide. If requested by salesperson, you must determine whether or not you would be willing modify your established agency relationship and give your consent, thereby agreeing to limited representation by your agent.

Do you want to be a Customer or a Client?
Do you want only to receive information and assistance (customer) or to be represented (client)? To understand your options, discuss this with the real estate salesperson. It is important to you and the salesperson that your working relationship with the salesperson be established and acknowledged and that you are aware of the services you will be provided. At your discretion, it may be advisable for you to obtain legal or other professional advice, which you feel necessary to protect your own interest. Note: The signing of the acknowledgment of a relationship disclosure brochure does not alone create agency obligations. (See Who is a Client?).

RE/MAX Cornwall Realty Inc., Real Estate Brokerage
RE/MAX Cornwall Realty Inc., Real Estate Brokerage has been the area leader serving the needs of Sellers and Buyers for over 20 years. Our salespersons are actively involved in almost 50% of the MLS activity in Cornwall. Locally, they deal with more Buyers and Sellers than any other real estate company. As Buyer representation grows, the potential for Dual Agency will increase. We know that Buyers and Sellers will continue to put their faith and trust in the honesty and integrity of our salespeople. As a result of this change in Buyer demands and in order to continue to offer the highest level of service to our clients, it is necessary to define agency in a form, which can easily be understood by all parties and acted upon by our salespeople. Before making your decision as to who you want to work with and what level of service you need, ask a RE/MAX cornwall salesperson to explain Agency in detail.

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