WHAT IS AGENCY?
At law, agency is a specific relationship between two or more people. One person must authorize the other person to act on his/her behalf, and the other person must consent to do so. In other words, when you authorize a REALTOR® to work for you in buying or selling a property and the REALTOR® agrees, you and the REALTOR® are in an agency relationship. As a member of the public, you are probably familiar with working with individual REALTORS®. However, the agency relationship is actually between you and the REALTOR’S® brokerage. The brokerage is the real estate company, its branch offices and all of its salespeople. Therefore, when you hire your REALTOR®, the law of agency says that you hire the entire brokerage.
In Seller’s Agency, a real estate company represents only the interests of the seller. Sellers typically hire a real estate company to sell their property by signing a “listing” agreement (now called the Seller’s MLS® Brokerage Contract). This is the Contract that establishes the formal agency relationship between the seller and the real estate brokerage. The Exclusive Seller’s Brokerage Contract will explain exactly what the seller instructs the Seller’s Brokerage to do, what services the Seller’s Brokerage will provide to the seller, who will pay for those services and what obligations the seller will have.
A Seller’s Brokerage is expected to:
- obey the seller’s instructions on the Exclusive Seller’s Brokerage
- Contract and all lawful instructions of the seller;
- represent the seller’s best interests;
- fully disclose known facts which might influence the seller’s decisions;
- maintain the confidentiality of personal and financial information discussed with the seller even after the Exclusive Seller’s Brokerage Contract expires;
- safeguard the seller’s documents and money; and exercise reasonable care and diligence.
In Buyer’s Agency, a real estate company (brokerage) represents only the interests of the Buyer. Buyer’s Agency can be established by working with a REALTOR® or by a written contract between the buyer and the brokerage called an Exclusive Buyer’s Brokerage Contract. The Exclusive Buyer’s Brokerage Contract will explain exactly what the buyer instructs the Buyer’s Brokerage to do, what services the Buyer’s Brokerage will provide to the buyer, who will pay for those services and what obligations the buyer will have.
- obey the buyer’s instructions on the Exclusive Buyer’s Brokerage
- Contract and all lawful instructions of the buyer;
- represent the buyer’s best interests;
- fully disclose known facts which might influence the buyer’s decision;
- maintain the confidentiality of personal and financial information discussed with the buyer even after the Exclusive Buyer’s Brokerage Contract expires;
- safeguard the buyer’s documents and money; and exercise reasonable care and diligence.
Dual Agency occurs on the sale of a property when the same REALTOR® or when different REALTORS® employed by the same real estate company (brokerage) work for both the buyer and the seller. When dual agency occurs, the brokerage’s duties of confidentiality and loyalty to the seller conflict with the same duties to the buyer. Therefore, the Association of Saskatchewan REALTORS® has proposed certain rules and limitations to deal with dual agency situations which are:
- That the REALTOR® will not disclose that the buyer will pay a price or agree to terms other than those contained in the offer, or that the seller will accept a price or terms other than those contained in the Exclusive Seller’s Brokerage Contract.
- That the REALTOR® will not disclose the motivation of the buyer to buy or the seller to sell unless authorized by the buyer or seller.
- That the REALTOR® will not represent the interest of either the buyer or the seller to the advantage of one over the other.
- That the REALTOR® will not disclose personal or financial information of either the buyer or the seller unless authorized in writing.
- That the REALTOR® shall disclose to the buyer all material defects about the physical condition of the property known to the REALTOR®.
- That all “comparable” property information may be disclosed to both the buyer and seller at any time.The brokerage shall disclose the dual agency to the buyer immediately before preparing an offer (Contract of Purchase and Sale) on the property for signing by the buyer. The brokerage shall disclose the dual agency to the seller immediately before presenting that offer (Contract of Purchase and Sale) to the seller for acceptance. The brokerage shall not be obligated to disclose the dual agency before the times described above.
The term REALTOR® refers to real estate professionals in Canada who are members of The Canadian Real Estate Association (CREA) and who subscribe to a high standard of professional service and to a strict Code of Ethics. As well, most real estate professionals in our province are members of the Association of Saskatchewan REALTORS® (ASR) and through this membership are members of CREA. In Saskatchewan, only members of ASR can call themselves REALTORS®. When you deal with a REALTOR®, you can expect not only strict adherence to provincial laws, but also adherence to a Code of Ethics. That Code is very important to you, because it assures that you will receive a high standard of professional service, honesty and integrity.
*Note that these agency guidelines are set forth by the Association of Saskatchewan REALTORS® and are intended for REALTORS® working in the province of Saskatchewan. They may not be applicable in other parts of Canada.