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Eugene Palermo


Agency Representation

Agency relationships can be confusing, and it is my job to make sure you understand your rights and responsibilities. 


DOTS What is Agency Relationship?

According to the TREB, "In real estate transactions, agency relationships are created when vendors or purchasers ask realtors to act on their behalf in real estate transactions. "Working with a Realtor"

DOTS What is the Toronto Real Estate Board (TREB)?

The Toronto Real Estate Board is an association of realtors. It operates the Multiple Listing Service (MLS) so that sellers, through their agents, can publicize the availability of their property. The TREB requires that its members (realtors) subscribe to a strict Code of Ethics and all By-Laws, and operates Ethics and Arbitration Committees to ensure high standards.

The term "Agency Relationship" describes the relationship between a buyer or seller and their realtor. The type of relationship varies.

DOTS Agency relationship consequences

The TREB states that "As a matter of law, an agent who represents a principal owes that principal the highest duty of "utmost good faith"; the agent must represent the principal's best interests at all times. The agent owes his principal a duty of confidentiality regarding information about the principal.

This means that once you enter into an Agency Relationship, your agent is obliged to work in your best interests, and protect your confidentiality. Agency Relationships involve both an ethical and legal commitment.

DOTS Types of Agency Relationships

There are many different types of relationships that buyers can have with their realtor. Go to the next page to view some of the more typical ones.

Sub-agent of the Vendor: In this case, the realtor is technically an agent of the vendor, and duties are owed to that vendor. However, the buyer can expect the realtor to disclose all pertinent information about a property, not to misrepresent any facts, and to honestly answer all questions.

Buyer Broker: (to be compensated by buyer): The buyer can expect the realtor to act in their interest alone as there is no sub-agency relationship with the vendor. In this case, the buyer pays the realtor.

Buyer Broker: (to be compensated through the listing broker): In this case, the realtor is compensated through the listing broker, but the buyer can still expect the realtor to act in their interest alone. In cases of buyer brokerage, the relationship is typically established by a Buyer Representation Agreement, and the realtor is clearly only the agent of the purchaser.

These are typical agency relationships, but there may be others.

DOTS Dual/Mulitple Representation Agency

What is Dual / Multiple Representation?

Dual agency refers to the situation whereby the buyer and seller are both represented by the same agent or firm.

Can Dual/Multiple Representation agency cause a conflict of Interest?

As there is a single firm or agent acting for two principals, the duties to the principals can be conflicted. In cases where dual agency may occur, it is typical for the realtor to ask the party signing the agreement to acknowledge that dual agency may occur, and that conflicts and duty of confidentiality are waived.

What other Requirements do Realtors have to meet?

In an offer regarding real estate property, (or if the agency relationship changes), realtors are required to disclose to other realtors the nature of their agency relationship. This is called disclosure of relationship, and is expected at the earliest practical point in time.

For further details on Agency Relationships, you may visit the Toronto Real Estate Board, or contact me


What is the role of an agent in the real estate transaction?

According to the TREB, "The job of realtors is to bring together willing vendors and willing purchasers in successful real estate transactions."

Within these broad parameters, there are many possible types of Agency Relationships.

What is the relationship between a Vendor(Seller) and a Listing Broker?

When a seller hires a realtor, the realtor is engaged as a Listing Broker. The seller and the realtor then enter into what is called an MLS Listing Agreement. This agreement states that the realtor is an agent working on behalf of the seller, and that the seller agrees to compensate the realtor - usually a commission, and usually payable upon successful completion of the real estate transaction.

DOTS Commission

How do commissions work and how are they paid?

A commission is usually a percentage of the purchase price, and is typically to be paid out at the end of a successful transaction. The listing broker is paid by the seller. In cases where another realtor becomes a co-operating broker, they are entitled to a share of this commission. When a co-operating broker is acting as a sub-agent of the seller, the buyer does not have to pay anything to them. However, where the buyer enters into a Buyer Representation Agreement with the realtor as a buyer broker, the buyer will compensate the realtor either directly, or indirectly through the listing broker.

DOTS What does a Broker Do?

What does the listing Broker do for the Seller?

The listing broker lists the seller's property on the Multiple Listing System. This is a call to other brokers to alert prospective buyers, and thus become co-operating brokers. In return, the co-operating brokers get a share of the commission paid by the seller.

Listing brokers have access to the MLS, and are able to work co-operatively with other agents to get your property sold.


Relationships between a Purchase (Buyer) and their Realtor?

Buyers often hire a realtor when they are looking to buy a property. However, as the TREB states, "it is important to understand that by contracting a realtor, it does not necessarily mean that the purchaser has established an agency relationship with that realtor.

The following links provide useful information and are a great place to start if you're considering buying a home.

DOTS How to Choose and Agent

DOTS My Resume

DOTS Client Testimonials

DOTS My Services for Buyers

DOTS How to Choose a House

DOTS How to Choose a Condo

DOTS How to Choose a Neighbourhood

DOTS Take Charge When buying your house Condo or loft

DOTS The Agreement of Purchase and Sale

DOTS Closing cost when buying your house, condo or loft 

DOTS Understanding Bidding Wards

DOTS Planning your move now that you bought your new home

DOTS Contact Me I want to discuss buying a House, Condo, Loft or Investment Property

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