REALTORS® are governed by the legal concept of “agency”. An agent is legally obligated to look after the best interests of the person he or she represents. The agent must be loyal to that person.

In real estate, there are three different forms of agency relationship: Seller Agency, Buyer Agency and Dual Agency. The following are descriptions provided by the Ontario Real Estate Association.

Buyer Representation 



A real estate brokerage representing a BUYER must do what is best for the buyer.

A written contract, called a buyer representation agreement, creates an agency relationship between the buyer and the brokerage, and establishes buyer representation. It also explains services the brokerage will provide, establishes a fee arrangement for the REALTOR®’s services and specifies what obligations a buyer may have. Typically, buyers will be obligated to work exclusively with that company for a period of time.

Confidences a buyer shares with the buyer’s agent must be kept confidential.

Although confidential information about the buyer cannot be disclosed, a seller working with a buyer’s agent can expect to be treated fairly and honestly.

Multiple Representation 


Occasionally a real estate brokerage will represent both the buyer and the seller. The buyer and seller must consent to this arrangement in writing. Under this “MULTIPLE REPRESENTATION” arrangement, the brokerage must do what is best for both the buyer and the seller.

Since the brokerage’s loyalty is divided between the buyer and the seller who have conflicting interests, it is absolutely essential that a multiple representation relationship be properly documented. Representation agreements specifically describe the rights and duties of everyone involved and any limitations to those rights and duties.

Customer Service

A real estate brokerage may provide services to buyers and sellers without creating buyer or seller representation. This is called “CUSTOMER SERVICE”.

Under this agreement, the brokerage can provide many valuable services in a fair and honest manner. This relationship can be set out in a buyer or seller customer service agreement. Real estate negotiations are often complex and a brokerage may be providing representation and/or customer service to more than one seller or buyer. The brokerage will disclose these relationships to each buyer and seller.

Who’s Working for You? 



It is important that you understand who the REALTOR® is working for. For example, both the seller and the buyer may have their own agent which means they each have a REALTOR® who is representing them.

Or, some buyers choose to contact the seller’s agent directly. Under this arrangement the REALTOR® is working for the seller, and must do what is best for the seller, but may provide many valuable services to the buyer.

A REALTOR® working with a buyer may even be a “sub-agent” of the seller. Under sub-agency, both the listing brokerage and the cooperating brokerage must do what is best for the seller even though the sub-agent may provide many valuable services to the buyer.

If the brokerage represents both the seller and the buyer, this is Multiple Representation.

Code of Ethics

REALTOR®’s believe it is important that the people they work with understand their agency relationship. That’s why requirements and obligation for representation and customer service are included in a “Code of Ethics” which is administered by the Real Estate Council of Ontario.

The Code requires a REALTOR® to disclose in writing the nature of the services they are providing, and encourage a REALTORS® to obtain written acknowledgement of that disclosure. The Code also requires a REALTOR® to submit written representation and customer service agreements to buyers and sellers.