Working with a REALTOR®

What are your responsibilities as a buyer/tenant or a seller/landlord?

As a buyer/tenant or seller/landlord who is working with a REALTOR®, you should:

  • Carefully read all documents and understand what you are signing.
  • If you need special or expert advice, seek other professionals for advice. 

What are the definitions of some commonly used real estate terms?

The brokerage is the real estate company where a REALTOR® is licensed.

The licensee is a managing broker, associate broker and/or representative of a brokerage.

REALTOR® is a real estate professional who is a member of a local real estate board, provincial association and The Canadian Real Estate Association (CREA) that enforce a strict Code of Ethics. Only these professionals can call themselves REALTORS®. In BC, REALTOR® are licensed under the Real Estate Services Act

The boards are the real estate boards and associations in whose jurisdiction the property is located and/or of which the brokerage or REALTOR® is a member. They are boards and associations which assist REALTORS® to market, sell or lease real estate. The boards also provide ongoing training for their members, enforce ethical standards and help resolve disputes between members and the public.

The Multiple Listing Service® (MLS®) is a computerized cooperative selling system of a real estate board for real estate listings and sales. MLS® System is operated by the boards in conjunction with other real estate boards and The Canadian Real Estate Association.

Personal information means any personal information about you, including your name, address, phone number, financial information and may include information about your property (such as listing and selling price, lease rate, listing term, etc.).

The buyer/tenant is often referred to as the purchaser.

The seller/landlord is often referred to as the vendor.

The principal is someone who has engaged a brokerage to act for and on his or her behalf either to buy, sell or lease real estate.

The landlord is often referred to as the lessor.

The tenant is often referred to as the lessee.

Mere Posting is a listing where the brokerage has chosen or agreed not to provide services to the seller/landlord other than submitting the listing for posting on a Multiple Listing Service®.

A full glossary of real-estate related terms is also available on the Real Estate Terms of Reference page.

What is the agency relationship?

REALTORS® work within a legal relationship called agency. The agency relationship exists between you, the principal, and your brokerage, the company under which the individual representing you is licensed. The essence of the agency relationship is that the brokerage has the authority to represent the principal in dealings with others.

Brokerages and their licensees are legally obligated to protect and promote the interests of their principals as they would their own. Specifically, the brokerage has the following duties:

  • Undivided loyalty. The brokerage must protect the principal’s negotiating position at all times, and disclose all known facts which may affect or influence the principal’s decision.
  • To obey all lawful instructions of the principal.
  • An obligation to keep the confidences of the principal.
  • To exercise reasonable care and skill in performing all assigned duties.
  • To account for all money and property placed in a brokerage’s hands while acting for the principal.

You can expect competent service from your brokerage, knowing that the company is bound by ethics and the law to be honest and thorough in representing a property listed for sale or lease. Both buyer/tenant and seller/landlord can be represented by their own brokerages in a single transaction.

What is dual agency?

Dual agency occurs when a brokerage is representing both buyer/tenant and seller/landlord in the same transaction. Since the brokerage has promised a duty of confidentiality, loyalty and full disclosure to both parties simultaneously, it is necessary to limit these duties in this situation, if both parties consent.

If you find yourself involved in a dual agency relationship, before making or receiving an offer, both you and the other party will be asked to consent, in writing, to this new limited agency relationship.

This relationship involves the following limitations:

  • The brokerage will deal with the buyer/tenant and the seller/landlord impartially;
  • The brokerage will have a duty of disclosure to both the buyer/tenant and the seller/landlord except that:
    • the brokerage will not disclose that the buyer/tenant is willing to pay a price or agree to terms other than those contained in the offer, or that the seller/landlord is willing to accept a price or terms other than those contained in the listing;
    • the brokerage will not disclose the motivation of the buyer/tenant to buy or or lease or the seller/landlord to sell or lease unless authorized by the buyer/tenant or the seller/landlord;
    • the brokerage will not disclose personal information, not otherwise necessarily disclosed in the transaction documentation, about the buyer/tenant or seller/landlord unless authorized in writing.
  • The brokerage will disclose to the buyer/tenant defects about the physical condition of the property known to the brokerage.

What happens when there is no agency relationship?

You may also choose to use the services of a REALTOR® without having any kind of agency relationship. This might occur, for example, when you are being shown a property by the seller’s/landlord’s agent.

The REALTOR® you choose to work with in this manner has a legal and ethical duty to provide you with accurate, honest answers to your questions and may provide all these services:

  • Explain real estate terms and practices.
  • Provide and explain forms used.
  • Assist you in screening and viewing properties.
  • Inform you of lenders and their policies.
  • Identify and estimate costs involved in a transaction.
  • Assist you in establishing your range of affordability.
  • Prepare offers or counter-offers at your direction.
  • Present all offers promptly.

A REALTOR® who is not your agent cannot:

  • Recommend or suggest a price.
  • Inform you of his/her principal’s top/bottom line.
  • Disclose any confidential information about his/her principal unless otherwise authorized.

You should not provide a REALTOR® who is not your agent with any information that you would not provide directly to his or her principal.

Where a seller/landlord uses a mere posting to list their property the seller/landlord and the listing brokerage will agree to reduce the agency obligations of the brokerage to reflect the limited services being provided.

Members of the public are aware that, in most cases, properties offered for sale by members of the real estate profession have a commission or fee that the seller/landlord has agreed to pay to the listing brokerage.

The listing brokerage traditionally shares this commission/fee with the cooperating brokerage. Commission and fees may vary.