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Mark & Vivian DeBruyn-Smith, Sales Reps.
General Info
Real Estate Relationships Explained

Royal LePage State Realty, Brokerage
905.525.3737 Bus. / 905.570.2500 Cell
mark@instantpage.org and vivian@instantpage.org

REALTORS® are required to establish and clearly explain the nature of their relationship with all parties involved in a Real Estate transaction at the earliest possible moment. This is often referred to as "Agency Disclosure" since the REALTORŪ must establish and disclose whether you will be their "client" or their "customer". There are substantial differences in the duties owed and the services provided to clients and customers, and you should be familiar with your options before committing to either.
Definitions:

  • Client:
    Often referred to as a Principal, a client is a person who asks an agent to act on his or her behalf during the purchase, sale, exchange or rental of a property or business. An agent owes their client full fiduciary duties, such as loyalty, confidentiality, accountability, duty of care, obedience to all lawful instructions, and full disclosure of all pertinent facts.
  • Customer:
    A customer is a person who has not retained an agent to work on his or her behalf. While a customer does not enjoy the fiduciary duties and benefits of the client-agent relationship, they are nevertheless entitled to be treated fairly, honestly and with due care at all times. A buyer who chooses to be a customer by not retaining their own agent and relies solely on the seller's representative (the listing agent) for help in negotiating an offer is in effect waiving the right to confidentiality and guidance regarding disclosures of information pertinent to the transaction. They are also waiving their right to receive information and advice concerning the true value of the property and how to negotiate the best deal since the REALTOR® is actually working for the other party.
  • Agent:
    While the term "agent" is not specific to the Real Estate industry, most Real Estate Salespeople, Brokers and REALTORS® act as agents when conducting business. An agent is commonly defined as any person who represents another person in a business transaction.
  • Fiduciary:
    A fiduciary is a person in a position of trust and confidence who must put the interests of another person (their client) above all others. Fiduciary duties refer to responsibilities owed to the client by the person in this position of trust.
Types of Agency Relationships:

An agency relationship is created when a person, known as the client, asks another person, known as an agent, to act for and on their behalf in a business transaction. In a typical Real Estate transaction an agency relationship is created when a seller or buyer asks a REALTOR® to be their agent.

There are two basic types of agency relationships:

  1. Single Agency:
    When an agent exclusively represents a single client's interests in a transaction, it is known as single agency. The agent owes their client all fiduciary duties, such as loyalty, confidentiality, accountability, duty of care, obedience to all lawful instructions, and full disclosure of all pertinent facts. In summary, agents have their client's best interests in mind throughout the entire real estate process and must act accordingly.
  2. Dual Agency:
    In certain circumstances an agent may represent both the Seller and the Buyer in a Real Estate transaction. Such a situation may occur when a buyer uses the listing agent to make an offer on a property. Because a dual agent owes the same fiduciary duties to both clients, it is often difficult to ensure that everyone's best interests are being protected. Because of this, the written informed consent of both the seller and the buyer is usually required before an agent may represent both parties. There are some basic rules that must be followed by agents when they are placed in a position of dual agency. A short summary of these rules can be found on a standard Ontario Real Estate Association Confirmation of Co-Operation and Representation form that must accompany all offers to purchase. These rules are:

    Basic Rules of Dual Agency

    The agent must be impartial and equally protect the interests of the seller and the buyer in any transaction. The agent has a duty of full disclosure to both the seller and the buyer, including a requirement to disclose all factual information about the property known to the agent.

    However, the agent shall not disclose:

    • That the seller may or will accept less than the listed price, unless otherwise instructed in writing by the seller.
    • That the buyer may or will pay more than the offered price, unless otherwise instructed in writing by the buyer.
    • The motivation of or personal information about the seller or the buyer, unless otherwise instructed in writing by the party to which the information applies, or unless failure to disclose would constitute fraudulent, unlawful or unethical practice.
    • The price the buyer should offer or the price the seller should accept.
    • The REALTOR® shall not disclose to the buyer the terms of any other offer, current or past.

While a complete discussion of agency extends well beyond this short summary, we would be happy to answer any questions and provide further details. Feel free to call anytime.

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©Copyright 1999 - 2016. Mark DeBruyn-Smith.

Mark DeBruyn-Smith B.A., Salesperson / Vivian DeBruyn-Smith Hons. B.A., Broker
Royal LePage State Realty, Brokerage
905.525.3737 Bus / 905.570.2500 Cell
1122 Wilson St. W., Ancaster - 987 Rymal Rd. E., Hamilton - 115 Hwy#8, Stoney Creek
www.royallepagestate.ca / www.hamiltonhomes.ca

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| ALL HOMES FOR SALE | BUYING INFO | SELLING INFO | MORTGAGE INFO | GENERAL INFO | SERVICES & LINKS | CONTACT US | Return to Main Page |
Royal LePage State Realty, Brokerage - 1122 Wilson St. W., Ancaster Ontario Canada - 905.525.3737 office, 905.570.2500 cell www.royallepagestate.ca
Real Estate Sales – Homes for Sale. Listing and selling homes in Hamilton, Ancaster, Dundas, Burlington, Flamborough and surrounding areas. Residential, Rural and Condominiums. Over 25 years of experience helping clients and friends buy, sell, mortgage, inspect, stage and renovate properties.