What is it, and how will it affect you?
Realtors work within the Law of Agency. An Agent is legally obligated to look after interests of the person he or she is working for. That person becomes the "Client".
Over the years, many buyers have thought the agent helping with their purchase was working in their best interest. The law, however, states that the agent's duty lies with their client, and until now, that has generally been the vendor. It may appear that the Realtor working with the buyer is acting as his Agent, but that is not necessarily the case. In fact, usually the listing salesperson and the selling salesperson both represent the Vendor. This means that both agents are obligated to disclose any information to the Vendor that may influence the negotiating process. A buyer can still expect competent service knowing the agents are bound by ethics and law to be honest and thorough in representing the property for sale.
The Ontario Real Estate Association required agents, as of January 1st, 1995, to disclose to everyone involved (buyer, seller and other agent) who it is they represent. THE BUYER NOW HAS A CHOICE. The buyer can hire an agent to work 100% on their behalf to negotiate the best price for them. This way, the buyer can now become the client and their agent must disclose to them any information he/she finds about the seller’s situation that may influence the negotiating process. The buyer’s agent can be paid by negotiating a fee for his services with the buyer OR can request the standard percentage of sale price through the sale, as agreed upon in the original Listing Agreement.
HOW DOES IT WORK?
It’s simple! The buyer must now sign a Purchaser Agency Agreement with the agent, whereby the buyer agrees to work with that agent exclusively for a designated period of time (Usually 3-6 months). In return, the agent agrees to represent the buyer to the fullest, making sure his interest is protected when going to buy a home.
WHAT IS DUAL AGENCY?
Dual agency takes place when the same agent or agency represents the buyer and seller. At such a time, the salesperson must disclose to both parties that he/she is representing both parties, and that all pertinent information must flow both ways.
DOES THIS AFFECT THE SELLER?
Now, more than ever, the seller must be thorough in hiring an agent to represent him in the marketing and sale of his home. Chances are that you, as a seller, must rely entirely on your own agent to get you the price and terms that you want. The seller must be sure to hire someone with the professionalism and experience to negotiate property for him. With this in place, the seller need not worry about who the selling salesperson is representing, because they have hired the best to represent them!