If you are thinking about a buying or selling a home, you should be using a Realtor and you should be aware of how agent relationships work. Many people don’t quite understand the different types of representation available to them, especially buyers. Many buyers do not understand the risks they take by not securing the services and knowledge of a professional Realtor.
Buyer Representation
A buyer can secure the services and knowledge of a Real estate agent by signing a “BuyerRepresentation Agreement”. The buyer is in fact, entering into an agreement with the brokerage for a specified amount of time. This legally obligates your Realtor to act in your best interests and anything that your agent may learn about you cannot be disclosed.
Seller Representation
When a sellers chooses to list their home with a Realtor, they sign a “Listing Agreement” which creates a client relationship between the seller and the listing brokerage. The listing agent is obligated to pursue the seller’s best interests and disclose any pertinent information they might discover about potential buyers.
Multiple Representation
In some situations, multiple representation may occur when a real estate agent represents both the seller and the buyer or multiple buyers. All parties to the transaction must agree in writing. These situations may represent confilicting interests and it is important for the designated representative to do what is best for all clients involved. Due to the nature of this type of representation, it is essential to properly document the relationship.
Self-Represented Party
If you are involved in a real estate transaction and you are not a client of a brokerage, you have chosen to represent yourself. This choice can have serious risks and it is always recommended that you seek independent legal advice before proceeding. You should be aware that when dealing with a buyer or seller, the other party is most likely benefiting from the expertise of a realtor who has a legal obligation to act in the best interest of the other party and share anything you might tell them. The agent cannot provide you with any services, opinions or advice. Any assistance they may provide you, would be in the interest of their own client.
For further information, please refer to the RECO Information Guide. If you have more questions about real estate representation, please contact Martin MacFarlane.
