Understanding the Realtor/Buyer Agency relationship

Real estate sales representatives are obligated to disclose to buyers, sellers and other representatives exactly who they represent in a transaction and what services are being provided. There is a critical distinction between buyers who are clients and buyers who are simply customers.

Sales representatives and the Realtor owe clients the highest level of fiduciary duties – competence, diligence, full disclosure, obedience, loyalty, confidentiality and complete accounting. Representatives shall endeavour to protect and promote the best interests of a client. A written representation agreement (Buyer Agency Agreement) is mandatory if a sales representative is to represent you as a client.

Sales representatives and the Realtor must only deal fairly, honestly and with integrity with customers, and not mislead them about a property or transaction. A Buyer Agency Agreement is not signed in this situation. When this agreement is not signed, confidentiality is out the window, as anything the buyer tells his/her representative can and must be divulged to the vendor, as the representative is not working under a Buyer Agency Agreement.

Major Elements of the Buyer Agency Agreement

The sales representative and Realtor agree to:

• Represent you and your interests
• Recommend all relevant properties
• Disclose all information that may be pertinent in your decision making and negotiations

You (as the buyer) agree to:

• Work exclusively with the sales representative for a stated period of time
• Bring to the attention of your representative any homes you are interested in
• Disclose any information that may be pertinent in the purchasing process or negotiations
• Pay a specified commission (usually paid by the seller)