In real estate in Ontario, there are three kinds of agency relationship: Seller's Agency, Buyer's Agency & Multiple Agency. The type of agency representation you have often depends on whether you're buying or selling.
- Seller's Agent: When a real estate brokerage is acting as a “Seller’s agent,” it must do what is best for the Seller of a property. The listing contract establishes this relationship.
- Buyer's Agent: When a real estate brokerage is acting as a "Buyer's agent," it must do what is best for the Buyer. A written contract establishes Buyer agency. It also explains what services the REALTOR® will provide and spells out who will pay and what obligations to the REALTOR® a Buyer may have. Typically, buyers will be obliged to work exclusively with that REALTOR® for a period of time.
- Multiple Representation: "Agency" in Ontario rests with the brokerage. When one real estate brokerage represents both Buyer and Seller, it's considered multiple representation, even though the Buyer and Seller may be dealing with different salespeople. Under this arrangement, the brokerage and REALTOR® must do what is best for both seller and buyer. In cases of multiple agency, strict procedures must be followed. A REALTOR® can only represent both Buyer and Seller if both agree in writing.
Explanation and Disclosure of Agency relationships
The Real Estate Council of Ontario (RECO) requires registrants to disclose in writing the nature of the services they are providing and encourages them to obtain written acknowledgement of that disclosure. This disclosure is usually done with an Ontario Real Estate Association (OREA) brochure entitled Working with a REALTOR®, the Agency Relationship, a brochure which includes a tear-off statement that the consumer signs and the REALTOR® retains as proof that disclosure was made. Signing the statement does not obligate the consumer in any way. It just serves as proof that the REALTOR® has discussed the matter with the consumer.
If a consumer does not want to enter into an Agency relationship with a brokerage, they can still receive "Customer Service". Even though the brokerage would not have the same fidicuary responsibilites as those under agency agreements, there is still a duty of fairness and honesty.