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Realtors work under a strict Code of Ethics. One provision of that code
requires Realtors to seek written acknowledgement, both from home buyers and home sellers,
that they understand the agency relationship. An agency
relationship is created where one person, known as the principal,
asks another person, known as the agent, to act for and on behalf
of the principal. In a real estate transaction, an agency relationship is formed between
the brokerage firm (including all its licensees) and the principal through the services of
a Realtor. There are basically 3 different ways I can work with you as a
purchaser:
I can work with you as a sub-agent for the vendor, or Seller’s Agent.
I can work for you directly as a Buyer’s
Agent.
If a home you want to purchase is listed with myself,
or another Royal City Realty (Dufferin) Ltd sales representative, I may
work with you as a Dual Agent.
Let’s take a look
at the differences:
1. Seller’s Agent
As a Seller’s Agent working with you as a
purchaser I am bound by ethics and law to be honest and thorough in representing all
pertinent details about the property for sale. And I can offer you access to a vast
storehouse of information about houses being sold in the area in which you are looking.
However there are a number of codes that apply:
- I will be a sub-agent of the listing agent who is working for the vendor.
- The vendor will be my Client, and you will be my Customer.
- I must maintain confidentiality of all information discussed with the vendor, except all
pertinent data that refers to the condition of the property.
- I may not advise you in some of the aspects of the sale (eg: what the lowest purchase
price might be).
- I must disclose to the vendor any pertinent information you may share with me (eg: if
you are willing to offer a higher price).
- Usually, no written agreement will exist between us until the offer to purchase is drawn
up and signed by both parties.
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2. Buyer’s Agent
If you choose this option, I will work for you as a Buyer’s
Agent. I am bound by ethics and law in exactly the same way as in 1.
above. And I can offer you the same access to information. However there are some key
differences in the form of our relationship:
- I will be contracted to work directly for you, and not for the vendor
- You
will be my Client, and not the vendor
- I will be bound by our agreement to represent your best interests, not those of
the vendor
- I must fully advise you in all aspects of the transaction
- Information you share with me must be kept confidential and not disclosed to the
vendor
- Buyer agency is established through a written agreement between you, the buyer, and the
Realtor who will be representing you.
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3. Dual Agency
If you choose me as a Buyer’s Agent and we
put in an offer on a home listed with either myself, or another Royal City Realty
(Dufferin) Ltd sales representative, then my broker is
obligated to represent, and look after the best interests of both the buyer and the
seller. This is called Dual Agency.
I will be bound by ethics and law in exactly the same way as in the
previous two options. However, in this case:
- I owe disclosure to both the buyer and the seller. Whether this will be full
disclosure or limited disclosure is a matter for agreement by both parties.
- In Dual Agency my aim remains the same, and that is to bring
together a willing purchaser and a willing seller to complete a transaction.
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4. How the Commission is Determined
- Usually a Seller’s Agent, as a sub-agent for the vendor,
earns a fee or commission from the vendor paid out of the transaction.
- The fee of a Buyer’s Agent is agreed between the purchaser
and the Realtor, and could be paid directly by the buyer or paid from the transaction
- Payment for a Dual Agent will be agreed upon in contracts
between the Realtor, the vendor and the purchaser.
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Royal LePage RCR Realty
75 First Street Suite 14,
Orangeville, ON, L9W 2E7
Phone: (519) 925-1776
Toronto Line: (800) 483-7740
Pager: (519)-941-5151
Fax (519) 925-1533
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Website by Power Train
http://www.agenthelp.com
1-800-483-7740
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