Knowing the difference and how each distinction affects your rights.

When it comes to engaging a sales representative to help you find your dream home or to market and sell your property, there is one very important decision you must make.  You must carefully consider how that representative, and their brokerage, will act on your behalf; either by establishing a client relationship or by establishing a customer service relationship. These two options are distinctly different and not created equally. Your decision to be a client or a customer, will not only affect the kind of service you can expect from your representative and their brokerage, but it will also determine what legal obligations your representative, and their brokerage, will have when acting on your behalf during the course of your real estate transaction. 

By law, your real estate agent must present you with a “Working With A Realtor” brochure at the earliest possible convenience. This document further explains agency relationships and ensures you understand the difference between being represented as a client or as a customer.  This same document will require that you sign an acknowledgement, attesting to the fact that you have read and understood your rights, and the obligations of your representative, and their brokerage, under each of the two relationship types. 

In short, when you sign a representation agreement, in favour of a customer service agreement, you are establishing an agency relationship under common law.  By its very nature, this agency relationship binds your representative, their brokerage and anyone else working in that brokerage or its affiliate offices, to protect your best interests, at all times and above all others.  In so doing, it establishes a fiduciary responsibility to you; legislating loyalty to you and only you. This kind of relationship also binds your representative, their brokerage and anyone else working in that brokerage or its affiliate offices, to adhere to, and observe all, regulatory obligations as prescribed by the Real Estate and Business Brokers Act, 2002.  Conversely, signing a customer service agreement, establishes a non-agency relationship between you, your representative and your representative’s brokerage.  This arrangement would significantly reduce and limit any responsibilities your representative, and their brokerage, would otherwise have in protecting your interests during the course of your real estate transaction.

The best decision is an informed decision!  Be certain to ask as many questions of your representative as need be in order determine which type of agency agreement is right for you.