REALTORS® work within a framework of legal principles called agency. REALTORS® believe that it is important that the buying and selling public understand how an agency relationship works and when it exists.
At law, agency is a specific relationship between two or more people. One person must authorize the other person to act on his/her behalf, and the other person must consent to do so. In other words, when you authorize a REALTOR® to work for you in buying or selling a property and the REALTOR® agrees, you and the REALTOR® are in an agency relationship. As a member of the public, you are probably familiar with working with individual REALTORS®. However, the agency relationship is actually between you and the REALTOR's® brokerage. The brokerage is the real estate company, its branch offices and all of the salespeople. Therefore, when you hire your REALTOR®, the law of agency says that you hire the entire brokerage.
In Seller's Agency, a real estate company represents only the interests of the seller. Sellers typically hire a real estate company to sell their property by signing a "listing" agreement (now called the Exclusive Seller's Brokerage Contract). This is the Contract which establishes the formal agency relationship between the seller and the real estate brokerage.
The Exclusive Seller's Brokerage Contract will explain exactly what the seller instructs the Seller's Brokerage to do, what services the Seller's Brokerage will provide to the seller, who will pay for those services and what obligations the seller will have.
A Seller's Brokerage is expected to:
In Buyer's Agency, a real estate company (brokerage) represents only the interests of the buyer. Buyer's Agency can be established by working with a REALTOR® or by a written contract between the buyer and the brokerage called an Exclusive Buyer's Brokerage Contract.
The Exclusive Buyer's Brokerage Contract will explain exactly what the buyer instructs the Buyer's Brokerage to do, what services the Buyer's Brokerage will provide to the buyer, who will pay for those services and what obligations the buyer will have.
In Buyer's Agency, it is the buyer who can expect the REALTOR® to:
Dual agencies occur when the same REALTOR® acts for both the buyer and the seller on the sale of a property. It also occurs when different REALTORS® work for the buyer and seller if those REALTORS® are employed by the same real estate company (brokerage) even if they work at different branch offices of that brokerage.
When dual agency occurs, the brokerage's duties of confidentiality and loyalty to the seller conflict with the same duties to the buyer. Therefore, the Association of Saskatchewan REALTORS® has proposed certain rules and limitations to deal with dual agency situations. The limitations of dual agency are:
The brokerage shall disclose the dual agency to the buyer immediately before preparing an offer (Contract of Purchase and Sale) on the property for signing by the buyer. The brokerage shall disclose the dual agency to the seller immediately before presenting that offer (Contract of Purchase and Sale) to the seller for acceptance. The brokerage shall not be obligated to disclose the dual agency before the times described above.