Real Estate Relationships

Real Estate Relationships

The specific responsibilities owed to consumers in a real estate transaction and the services that may be provided to you by the agent are determined by the type of relationship entered between both parties. REALTORS® can enter into 2 types of relationships with you the consumer:
  • A non-represented relationship
  • A represented relationship

Non-Represented Relationships

In a non-represented relationship, the REALTOR® is working with you, but not acting on your behalf and known as a customer. Basically, this means you have contacted me, but have not engaged me (i.e. hired me) as your REALTOR®. Therefore, as a customer there are only limited responsibilities that an agent may provide you:
  • Provide you factual information (i.e. details about a property, or market information).
  • Administrative support (i.e. drafting an offer to buy a property).

Keep in mind that in this type of relationship, REALTORS® cannot provide advice or opinions to customers, nor may they advocate on behalf of a customer.

Buyer Represented Relationships

In a represented relationship, the agent acts for one of the parties in the real estate transaction (i.e. the buyer or the seller). Once you are represented by a REALTOR® you are known as a client. As a client, the agent now has several responsibilities and a number of services that they may provide to you. In order to become a REALTORS® client, you must enter into a Buyer or Seller Brokerage Agreement with them.

Responsibilities to Customers and Clients

In a non-represented relationship, the only responsibilities that agents have to a customer is some basic general obligations. In a represented relationship, the agent’s responsibilities to a client can be categorized into two groups; general obligations & fiduciary duties.

Responsibilities to Customers

In non-represented relationships, agents have limited responsibilities that they owe to customers. These include exercise care and skill and act honestly.

  • Exercise care & skill:  The real estate professional must exercise care and skill when working with clients.  This is achieved by providing clients with competent service.
  • Act honestly:  This is a basic component of the agents’ professionalism.  Acting honestly infers that the agent refuses to lie, steal or deceive their clients or breaching the position of trust.  Agents are obligated to ensure that all activities that they perform on their clients’ behalf, including statements made, actions or omissions do not mislead their clients in any way.

Responsibilities to Clients

In represented relationships, the responsibilities that agents owe their clients can be categorized into two groups; general obligations and fiduciary duties.  

General Obligations

There are 8 general obligations that real estate professionals owe their clients in represented relationships. 

  1. Exercise care & skill:  The real estate professional must exercise care and skill when working with clients.  This is achieved by providing clients with competent service.
  2. Act honestly:  This is a basic component of the agents’ professionalism.  Acting honestly infers that the agent refuses to lie, steal or deceive their clients or breaching the position of trust.  Agents are obligated to ensure that all activities that they perform on their clients’ behalf, including statements made, actions or omissions do not mislead their clients in any way.
  3. Negotiate favorable terms:  Real estate professionals must assist clients in negotiating contracts that include the most favorable terms & conditions possible.  
  4. Maintain confidentiality:  Real estate professionals must maintain confidentiality regarding all matters that could adversely impact their clients, or in any way undermine their clients position in the buying or selling of a property.  All information received from the client or obtained as a result of representing a client must be kept confidential.
  5. Disclose information:  Real estate professionals are obligated to disclose to their clients all information that is pertinent to the representation relationship relating to the real estate transaction.  It is up to the client to determine what information is pertinent and of interest to them.
  6. Act in person:  Real estate professionals must personally perform all activities required of them during the real estate transaction.  These activities cannot be performed by unauthorized assistants, and administrative staff of the brokerage.
  7. Obey lawful instructions:  Real estate professionals are obligated to strictly follow their clients’ lawful instructions, regardless of whether they agree with them or not.  Lawful instructions are any instructions that are reasonable and ordinary under the circumstances for the transaction.
  8. Perform mandate:  Real estate professionals are mandated to act on their clients’ behalf during the real estate transaction.

Fiduciary Duties

There are 6 fiduciary duties that are legal duties that requires a real estate professional to act at all times in their clients’ best interests.

  1. Undivided loyalty:  The agent must act only in your best interests and put them above their own and those of other people.  The agent must avoid conflicts of interest and must protect your negotiating position at all times.
  2. Confidentiality:  The agent must keep information confidential, even after your relationship ends.  Confidential information includes your personal information, information about the property, and information about the transaction (except information the law says must be disclosed or information you agree to disclose).
  3. Full disclosure:  The agent must tell you, in writing, about the services they will provide.  They must also tell you everything they know that might affect your relationship or influence your decision in a transaction, even if they don’t think it’s important.  This includes any conflicts of interest, for example when they act (or are planning to act) on behalf of any other person in a transaction.  The only information they can’t give you is confidential information from another agency relationship.
  4. Obedience:  The agent must obey all your lawful, reasonable, and ordinary instructions.  If you insist on something unlawful, the agent must refuse and consider ending your relationship and the agreement.
  5. Reasonable care and skill:  The agent must exercise reasonable care and skill in all their duties.  They must meet the standard of a reasonable and competent member of the real estate industry.
  6. Full accounting:  The agent must account for all money and property they receive while acting on your behalf.  Everything a client puts in the care of an agent—for example, money, keys, or documents—is returned when the agreement ends.

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