Agents in Ontario must be registered, which requires completing the necessary education, and carrying consumer deposit insurance and professional liability insurance.

These dedicated professionals play a pivotal role, offering invaluable information, expert advice, and essential guidance to both buyers and sellers navigating the intricate landscape of real estate transactions.

◦ Offer guidance on market conditions and formulate optimal strategies to attract buyers and secure the best price for your home.

◦ Execute comprehensive marketing and advertising initiatives for your property, including the coordination of photographs, videos, and virtual tours.

◦ Provide referrals to essential professionals such as lawyers or home staging companies.

◦ Coordinate and attend home inspections and appraisals.

◦ Organize showings for prospective buyers.

◦ Counsel on managing competing offers, including sharing the content of competing offers and addressing various transaction aspects.

◦ Vet offers and potential buyers to ensure financial capability to purchase your property.

◦ Skillfully negotiate with buyers to achieve optimal results in terms of price and conditions.

◦ Guide you through the intricacies of paperwork and successfully navigate the closing process.

◦ Assist in obtaining pre-approvals for financing to determine your affordable budget.

◦ Identify potential tax exemptions for which you may qualify.

◦ Collect and share information about neighborhoods and homes that match your criteria, facilitating viewings of selected properties.

◦ Investigate zoning regulations, permitted property use, and other relevant aspects of homes.

◦ Offer guidance on navigating competing offer situations and protecting your offer information.

◦ Negotiate with sellers to secure favorable terms, pricing, and overall results.

◦ Navigate the paperwork and guide you through a successful transaction closing.

◦ Provide recommendations for other essential professionals, including home inspectors, lawyers, or contractors.

Key Client Rights and Responsibilities:

1. Undivided Loyalty

◦ Your interests take precedence over those of the brokerage, its agents, and any other party.

 ◦ The brokerage or agent is committed to promoting and safeguarding your best interests.

2.  Disclosure:

◦ Full disclosure of all relevant information about the transaction or your client relationship is mandatory.

◦ You are entitled to be informed of any details that could impact your decisions.

3.  Confidentiality:

◦ Your confidential information remains private and cannot be shared without your written consent.

◦ Even after the client relationship ends, confidentiality is maintained, except where required by law.

4. Avoid Conflicts of Interest:

◦ The brokerage or agent must steer clear of situations that may compromise their duty to act in your best interests.

◦ Any conflicts that arise will be disclosed, and additional services cannot be provided without your written agreement.

Clearly communicate your preferences and dislikes, ensuring that you share all relevant information. For instance, specify your desired zoning for intended use, such as a home office. Promptly respond to your agent's inquiries, understand the terms of your agreement with the brokerage, and honor agreed-upon fees, even if a later buy or sell agreement falls through due to your default or neglect.

A Self-Represented Party (SRP) refers to an individual who is not affiliated with any brokerage as a client. For instance, there are two scenarios in which a self-represented party (SRP) may engage with a REALTOR® without such interaction resulting in an implied agreement between the REALTOR® and the SRP.

While a rare choice, opting to represent yourself in a real estate transaction carries significant risks. Lack of expertise may pose challenges in navigating the complexities of the process. In many cases, you may find yourself dealing with a party benefiting from the services of an experienced real estate agent. RECO advises seeking independent professional advice before proceeding as a self-represented party or receiving assistance from an agent representing another party in the transaction.

Understanding Property Details:

◦ Make inquiries about zoning, permitted property use, or any other relevant aspects of the property.

Property Valuation:

◦ Determine your perceived value for the property you are buying or selling.

Offer Strategy:

◦ Decide how much you are willing to offer or accept in the transaction.

Handling Competition:

◦ Navigate competing offer situations with strategic decision-making.

Terms and Agreements:

◦ Determine the terms you wish to include in an offer or agreement of purchase and sale.

Document Preparation:

◦ Take responsibility for preparing all necessary documents in the real estate transaction.

It's crucial to recognize that when a real estate agent is working for the opposing party in a transaction, they are bound by a legal obligation to prioritize the best interests of their client.

For instance, if you are a buyer or simply inquiring about a property, and the agent is representing the seller, their duty is to act in the seller's best interest. Exercise caution in sharing information, as the agent is obligated to relay anything you disclose to their client. This includes details such as:

◦ Your motivation for buying or selling.

◦ The minimum or maximum price you are willing to offer or accept.

◦ Your preferred terms or conditions for an agreement of purchase and sale.

Before providing any assistance, a real estate agent must furnish you with RECO’s Information and Disclosure to Self-represented Party form. They will guide you through the document, and you will be required to confirm receipt and understanding of the implications of being a self-represented party in the transaction.

If you find yourself uncertain about navigating a transaction independently or require guidance from a real estate agent, you have the option to become a client of a real estate brokerage at any stage of the transaction.

However, it's important to note that the agent, in this capacity, cannot:

◦ provide you with any services, opinions, or advice;

◦ do anything that would encourage you to rely on their knowledge, skill, or judgement; or

◦ encourage you to represent yourself or discourage you from working with another real estate agent or brokerage.

Any assistance the agent offers you:

◦ is a service to their client, not you;

◦ is in the best interests of their client, not you; and

◦ is to help their client sell or buy a property.

There are two kinds of representation agreements in Ontario:

Brokerage representation agreement

The brokerage and all its agents represent you and must promote and protect your best interests, but one of the brokerage’s real estate agents may be your primary contact.

Designated representation agreement

One (or more) of the brokerage’s real estate agents is your designated representative. The agent(s) represent(s) you and must promote and protect your best interests.

The brokerage and its other agents are required to treat you impartially and objectively.

If the contract is a designated representation agreement, the name of your designated representative will be included. More than one real estate agent working at the brokerage can be identified as your designated representative.

Define the parameters of your engagement within the agreement. For sellers, the agreement should outline the details of the property being sold.

Meanwhile, as a buyer, carefully assess the agreement's scope. It may pinpoint a specific property, a designated geographic area, a preferred property type, or other particular requirements.

For instance, if you're in the market for both a city house and a lakeside cottage, intending to collaborate with distinct real estate agents possessing expertise in each locale and property type, it's crucial to articulate the scope clearly in each agreement. This clarity helps prevent disputes regarding payment obligations in the event of a property purchase.

The agreement should transparently outline the services that will be provided to you. Given that brokerages offer a diverse range of service options, there is no standardized set of services. It is up to you to select the services that align best with your needs.

Your agreement with a brokerage may be tailored for a specific purpose, such as having an agent draft an offer for a property you wish to purchase or facilitating a viewing of a particular property. Some sellers may enter into an agreement solely for the purpose of featuring their property on a local listing service.

To determine the most suitable services for your situation, engage in a discussion with the real estate agent. Inquire about the available services or potential combinations that align with your needs. If there are specific services you require or anticipate, ensure that they are explicitly included in the agreement or listed as a schedule to the agreement. It is essential not to assume the provision of a particular service if it is not clearly stated in the agreement.

The determination of the fees for services rendered is a mutual decision between you and the brokerage. These fees are not fixed or endorsed by RECO, any government authority, or any real estate association or board.

Various payment structures, such as a fixed dollar amount, a percentage of the sale price, or a combination of both, can be agreed upon. However, the representation agreement cannot specify an amount based on the discrepancy between a property's listing price and its eventual selling price.

It is imperative that agreements clearly outline circumstances under which the agreed-upon amounts might undergo changes and delineate the specific changes for each scenario. 

If you are a seller, your agreement must distinctly specify:

1. The amount or method of calculation for payment to your brokerage for the services and representation received.

2. The agreed-upon amount or method of calculation for compensating the buyer's brokerage fees (if any).

3. The mechanism for adjusting the agreed-upon amounts if you consent to multiple representation.

For buyers, the agreement should clearly define:

1. The amount or method of calculation for payment to your brokerage for the services and representation provided.

2. How the agreed-upon amount will adjust if the seller covers some or all of your brokerage fees.

3. The process for adjusting the agreed-upon amount if you consent to multiple representation.

The agreement should explicitly outline the circumstances under which it can be terminated. It is crucial to carefully examine the conditions allowing the brokerage to terminate the agreement and be mindful of any associated penalties or costs.

There are two key circumstances to be particularly attentive to:

1. Multiple Representation: You have the option to decline multiple representation, and the agreement should clearly articulate the consequences in such a scenario. For instance, the agreement might terminate entirely, or an alternative arrangement could be made, such as a referral to another brokerage or a designated representative for the specific transaction, while still maintaining the overall agreement with the brokerage.

2. Changing Your Designated Representative: In the case of a designated representation agreement, the brokerage cannot appoint a different designated representative without your consent. The brokerage may seek your agreement to appoint someone else if, for example, your designated representative ceases to work with the brokerage or is otherwise unavailable to fulfill the services and representation outlined in the agreement.

Additionally, the agreement's expiry date must be prominently displayed on the first page. Representation agreements can vary in duration, ranging from a single day to several weeks or months. It's important to consider the desired duration of the agreement and be aware of the expiration date.

Keep in mind that a holdover clause could entail financial obligations even after the agreement has officially expired.

Many representation agreements incorporate a provision commonly known as a holdover clause. This clause may stipulate that you are responsible for paying brokerage fees related to a purchase or sale even after the expiration of your representation agreement. The duration of the holdover clause is explicitly outlined in the agreement, commencing from the date of agreement expiration.

The purpose of a holdover clause is to safeguard the interests of the brokerage, and there is no prescribed minimum or standard duration for such a period. When your agreement includes a holdover clause, it is essential to ensure that you are in agreement with the specified length of the holdover period before signing.

For instance, consider a scenario where you are a seller, and your agreement features a 30-day holdover clause. This implies that, under certain conditions, you may be obligated to pay the brokerage commission even if your agreement has expired, provided you sell your home during the 30-day holdover period.

Similarly, if you enter into a buyer agreement with a 30-day holdover clause and the agent shows you a home before the contract's expiry, purchasing the home after the agreement has expired but within the holdover period might entail an obligation to pay the brokerage commission.

Multiple representation occurs when a designated representative or brokerage represents more than one client, each with conflicting interests, in the same transaction. The manifestation of multiple representation varies depending on the type of representation agreement established between you and the other clients and the brokerage.

Under brokerage representation, multiple representation happens when:

◦ the brokerage represents both the buyer and seller in the same transaction

◦ the brokerage represents two or more competing buyers interested in the same property.

This is true even when the clients are working with different real estate agents.

Under designated representation, multiple representation happens when:

◦ the same real estate agent is the designated representative for both the buyer and the seller in the same transaction

◦ the same real estate agent is the designated representative for two or more competing buyers interested in the same property.

Multiple representation is only permissible when all involved clients provide explicit consent. Before proceeding, it is strongly advised to seek independent professional advice, such as consulting with your real estate lawyer.

The brokerage or your designated representative is entrusted with the responsibility of promoting and safeguarding your best interests while actively avoiding conflicts of interest. Should your brokerage or representative engage in an agreement with another client sharing an interest in the same property as you, it establishes a scenario of multiple representation. The introduction of multiple representation brings forth potential risks that both you and the other client should thoroughly contemplate.

In the event that you consent to multiple representation, it is crucial to recognize that the brokerage or designated representative assumes specific obligations:

1. Objective and Impartial Treatment: The brokerage or representative is required to treat each involved client objectively and impartially, ensuring fairness in their representation.

2. Undivided Loyalty Limitations:Undivided loyalty to you is constrained, and the representation must navigate a balance between clients, refraining from prioritizing your interests over those of the other client.

3. Restrictions on Advice: The brokerage or representative is prohibited from providing advice on critical matters such as the optimal price to offer or accept, as well as the terms that should be included in an agreement of purchase and sale.

Before agreeing to multiple representation, anticipate the following disclosure from the brokerage:

Clear Explanation of Duty Changes: You should receive a written disclosure detailing how the brokerage's duties or the designated representative's duties to you will alter in the context of multiple representation.

Clarification on Service Differences: The disclosure should outline any variations in the services you can expect to receive under multiple representation.

Transparent Fee Adjustments: Any changes to the fees you are required to pay the brokerage must be clearly communicated in writing.

Until this information is provided in writing to all clients or prospective clients involved in the transaction, and until unanimous written agreement is obtained from all parties, the brokerage or designated representative is prohibited from taking further steps on behalf of any client or prospective client.

Additionally, any confidential information shared with the brokerage or designated representative during prior representation cannot be disclosed without obtaining your written consent.

Should you choose not to agree to multiple representation, the brokerage or your designated representative is legally prohibited from moving forward with such an arrangement.

Explore alternative options with the brokerage or real estate agent. For instance, as a buyer, the brokerage might suggest referring you to another brokerage or a different designated representative who can assist you in making an offer on the property.

It's crucial to recognize that agreeing to multiple representation comes with limitations on what the brokerage and its agents can effectively do for you. These limitations may carry potential consequences and associated costs, underscoring the importance of thoughtful consideration before consenting to such an arrangement.