The Agency Relationship
When working with a REALTOR, it is important to understand who the REALTOR
works for. To whom is the REALTOR legally obligated? REALTORS
are obliged to disclose in writing to all parties their
agency position in a transaction.
Honesty and Integrity
Most real estate professionals
in our province are members of the Ontario Real Estate
Association (OREA) and only members of OREA can 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
licence, candidates must successfully complete an extensive
course of study developed by OREA on behalf of the Ontario
Government. And that is only the beginning: in the two years
after receiving their licence,the new real estate professionals are
required to successfully complete three additional courses as
part of their articling with an experienced broker.
REALTORS are governed by the legal concept of
"agency." An agent is legally obligated to look
after the best interests of the person he or she is working
for. The agent must be loyal to that person.
A REALTOR may be your agent - if you have clearly established
an agency relationship with that REALTOR. But often, you may
assume such an obligation exists when it does not.
REALTORS believe it is important that the people they work
with understand when an agency relationship exists and when
it does not - and to understand what that means.
In real estate, there are 3 different possible forms of
agency relationships: Vendor's Agency, Purchaser's Agency
& Dual Agency.
1.Vendor's Agent
When a real estate company is
a "vendor's agent," it must do what is best for the
vendor of a property.
A vendor's agent must tell the
vendor anything known about a purchaser. For instance, if a
vendor's agent knows a purchaser is willing to offer more for
a property, that information must be shared with the vendor.
Confidences a vendor shares with a vendor's agent must be
kept confidential.
A purchaser can expect fair
service and disclosure of pertinent information about a
property. Nothing will be misrepresented about a property.
All questions will be answered honestly.
2. Purchaser's Agent
A real estate company acting
as a "purchaser's agent" must do what is best for
the purchaser. A written contract establishes purchaser
agency. It also explains services the REALTOR will provide,
spells out who will pay and specifies what obligations a
purchaser may have. Typically, purchasers will be obliged to
work exclusively with that REALTOR for a period of time.
A REALTOR working for a
purchaser will keep information about the purchaser
confidential from the vendor.
3. Dual Agent
Occasionally a real estate
company and its sales representative will be the agent of
both the purchaser and vendor. Under this "dual
agency" arrangement, the REALTOR must do what is best
for both the vendor and purchaser and strict procedures must
be followed. A REALTOR can be a dual agent only if both the
purchaser and vendor agree in writing. Ask your REALTOR for
more specific details.
WHO PAYS?
Usually, the
REALTOR will be paid from the proceeds of the sale. The
listing agreement states the REALTOR's fee.
Purchasers & Vendors will ALWAYS be told - in writing -
who a REALTOR is working for.
Ask your REALTOR for more information
This
information was taken from a series of brochures prepared by
the Ontario Real Estate Association
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