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Working With A REALTOR�

Friday, Jan. 01 2010  |  Posted by: Surina  |  3 comments

When working with a REALTOR®, it is important to understand who the REALTOR® works for. To whom is the REALTOR® legally obligated?

REALTORS® are governed by the legal concept of "agency". An agent is legally obligated to look after the best interest of the person he or she represents. The agent must be loyal to that person.

A Real Estate Brokerage may be your agent -  if you have clearly established an agency relationship with that REALTOR® with a representation agreement. But often, you may assume such an obligation exists when it does not.

REALTORS® believe it is important that the peope they work with understand when an agency relationship exists and when it does not - and understand what it means.

Honest and Integrity

Most real estate professionals in our province arre 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 strict adherence to provincial laws, which includes a Code of Ethics. That code assures you will recieve the highest level of service, honesty and integrity.

Highest Professional Standards

Before recieving a real estate registration, candidates must successfully complete an extensive course of study developed by OREA on behalf of the Real Estate Council of Ontario. That is only the beginning: in the first two years of practice, registrants are required to successfully complete three additional courses as part of their articling with an experienced Broker. In addition, all registrants must continue to attend courses throughout their careers in order to maintain their registration.

In real estate, there are different possible forms of agency relationship:

1. Seller Representation

When a real estate Brokerage represents a Seller, it must  do what is best for the Seller of a property.

A written contract, called a Listing Agreement, creates an agency relationshiop between the Seller and the Brokerage and established Seller representation. It also explains services the Brokerage will provide, establishes a fee arrangement for the REALTOR'S® servics and specifies what obligations a Seller may have.

A Seller's agent must tell the Seller anything known about a Buyer. For instance, if a Seller's agent knows a  Buyer is willing to offer more for a property, that information must be shared with the Seller.

Confidences a Seller shares with a Seller's agent must be kept confidential from potential Buyers and others.

Although confidential information about the Seller cannot be discussed, a Buyer working with a Seller's agenc can expect fair and honest service fom the Seller's agent and disclosure of pertinent information about the property.

2. Buyer Representation

A real estate Brokerage representing a Buyer must do what is best for the Buyer.

A written contract, called a Buyer Representation Agreement, creates an agency relationship between the Buyer and the Brokerage, and establishes Buyer representation. 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.

 Typically, Buyers will be obliged to work exclusively with that Brokerage for a period of time. Confidences a Buyer shares with the Buyer's agent must be kept confidential.

Although confidential information about the Buyer cannot be disclosed, a Seller working with a Buyer's agent can expect to be treated fairly and honestly. 

3. Multiple Representation

Occassionally a real estate Brokerage will represent both the Buyer and the Seller. The Buyer and Seller must consent to this arrangement in writing. Under this 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 interest, it is absoslutely 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.

4. Customer Service

A real estate Brokerage may provide services to Buyers ad Sellers without creating Buyer or Seller representation. Thiuis 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.

Working With A REALTOR® - Provided By: The Ontario Real Estate Association

 

Posted in: Documents/Forms

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