Agency Law

Working with a Realtor: The Agency Relationship

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.

We as 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 it means.

In Real Estate, there are different possible forms of agency relationship.

1. Seller's Agent
2. Buyer's Agent
3. Dual Agent

1. Seller'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 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. Buyer's Agent

A real estate company acting as a "buyer's agent" must do what is best for the buyer.

A written contract establishes buyer agency. It also explains services the REALTOR will provide, spells out who will pay and specifies what obligations a buyer may have. Typically, buyer will be obliged to work exclusively with that REALTOR for a period of time.

A REALTOR working for a buyer will keep information about the buyer confidential from the seller.

3. Dual Agency

Occasionally a real estate company will be the agent of both the buyer and the seller. Under this "dual agency" arrangement, the REALTOR must do what is best for both the seller and the buyer.

Your Royal LePage agent will discuss dual agency during conversations dealing with representation and provision of service.

A REALTOR can be a dual agent only if both the buyer and seller agree in writing.