RECO Information Guide

About this guide

In this guide:

• brokerage means a real estate brokerage
• real estate agent and agent mean a real estate salesperson or broker
• you and client mean a buyer or seller
• buyer and seller can also mean lessee and lessor respectively

You have received this guide from a real estate agent because:

• you are considering receiving services from the real estate agent, or
• the agent is representing a client in the transaction, and you might receive assistance from the agent.

Real estate agents in Ontario are required to walk you through this guide before providing services or assistance to you. Please read the guide carefully and talk to the agent if you have questions.

What’s inside

Working with a real estate agent — page 2
This section describes the benefits of working with a real estate agent, what you can expect, and the responsibilities of clients.

Know the risks of representing yourself — page 4
This section explains the risks if you choose not to work with a real estate agent and the risks of receiving assistance from a real estate agent who is working for the person on the other side of the transaction.

Signing a contract with a real estate brokerage — page 6
When you work with a real estate agent, you sign a contract with the brokerage the agent works for. These contracts are called representation agreements. This section highlights what you should look for before you sign.

Understanding multiple representation — page 9
Multiple representation means the brokerage, or the agent represents more than one client in the same transaction. This section explains how multiple representation works, the risks, and what to expect if you agree.

How to make a complaint — page 11
Ontario brokerages and real estate agents are accountable for their conduct. This section tells you how to raise a concern with the brokerage and with RECO.

Legal disclaimer: The content of the RECO Information Guide is intended to help buyers and sellers make informed decisions. This guide is not intended to act as a substitute for legal advice or as a replacement for the Trust in Real Estate Services Act, 2002. Readers are encouraged to retain qualified and independent legal counsel to answer any legal questions or address any legal issues. Where there is any discrepancy, the legislation will take precedence.

About this guide

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

Real estate agents provide valuable information, advice, and guidance to buyers and sellers as they navigate the complexities of real estate transactions.

If you are a seller, an agent can:

• Advise you on market conditions and the best strategy to attract buyers and get the best price for your home
• Market or advertise your home, including arranging photographs, videos and virtual tours
• Provide referrals to other professionals you’ll need, like a lawyer or home staging company
• Arrange and attend home inspections and appraisals
• Arrange showings for interested buyers
• Advise you on how to handle competing offers, sharing the content of competing offers, and other aspects of the transaction
• Vet offers and potential buyers to ensure they can afford to buy your property
• Negotiate with buyers to achieve the best results, price, and terms, for you
• Guide you through paperwork and closing the transaction successfully

If you are a buyer, an agent can:

• Assist you with getting pre-approvals for financing so you know how much you can afford
• Make you aware of any tax exemptions you might be eligible for
• Gather and share information about neighbourhoods and homes that meet your requirements, and arrange to show you homes you’d like to see
• Make inquiries about zoning, permitted property use, or other aspects of the home
• Advise you on the best approach in competing offer situations and how to protect your offer information
• Negotiate with sellers to achieve the best results, price, and terms, for you
• Guide you through paperwork and closing the transaction successfully
• Provide referrals to other professionals you’ll need (for example, home inspectors, lawyers, or contractors)

You will also benefit from the duties the brokerage and agent owe to you as a client

Undivided loyalty
Your best interests are promoted and protected by the brokerage or agent representing you. As a client, your interests take priority over the interests of the brokerage, its agents, and any other party.

Disclosure
They must tell you everything they know about the transaction or your client relationship that could have an impact on any decisions you make.

Confidentiality
Your confidential information cannot be shared with anyone outside of the brokerage without your written consent, except where required by law, even after your client relationship ends.

Avoid conflicts of interest
They must avoid any situation that would affect their duty to act in your best interests. If a conflict arises, they must disclose it to you and cannot provide any additional services to you unless you agree in writing to continue receiving services.

You have responsibilities as a client

• be clear about what you want and don’t want and make sure you share all relevant information
• respond to your agent’s questions quickly
• understand the terms of your agreement with the brokerage
• pay the fees you have agreed on

Know the risks of representing yourself

If you are involved in a real estate transaction and are not a client of a real estate brokerage, you are considered a self-represented party.

There are significant risks to representing yourself in a real estate transaction if you do not have the knowledge and expertise required to navigate the transaction on your own.

RECO recommends that you seek independent professional advice before you proceed as a self-represented party.

If you choose not to work with a real estate agent, it will be your responsibility to look after your own best interests and protect yourself.

The real estate agent is working for another party in the transaction

It’s important to be aware that the agent has a legal obligation to act in the best interests of the person on the other side of the transaction.

• your motivation for buying or selling the property
• the minimum or maximum price you are willing to offer or accept
• your preferred terms or conditions for an agreement of purchase and sale

The agent cannot:

• provide you with any services, opinions, or advice
• do anything that would encourage you to rely on their knowledge, skill, or judgement
• 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
• is to help their client sell or buy a property

You have the right to change your mind. If you’re concerned about completing a transaction on your own, or you need advice from a real estate agent, you can choose to become a client of a real estate brokerage at any point during the transaction.

Signing a contract with a real estate brokerage

There are two kinds of representation agreements in Ontario:

Brokerage representation:
The brokerage and all its agents represent you and must promote and protect your best interests.

Designated representation:
One or more of the brokerage’s real estate agents is your designated representative.

When you become a client, you sign a representation agreement with the brokerage.

What to look for in a representation agreement

• Name of your designated representative
• Scope
• Services
• Payment amount and terms
• Termination provisions
• Expiry date
• Holdover clause

Understanding multiple representation

Multiple representation means a designated representative or brokerage represents more than one client, with competing interests, in the same transaction.

Multiple representation is not permitted unless each of the clients involved agrees.

If you agree to multiple representation, the brokerage or designated representative:

• must treat each client in an objective and impartial manner
• cannot maintain undivided loyalty to you over the other client
• cannot offer advice about the price you should offer or accept or terms to include

You can refuse multiple representation.

How to make a complaint

Brokerage firms and real estate agents working in Ontario must be registered with RECO.

First, contact your brokerage
In many cases, your brokerage will be able to mediate or resolve your complaint.

Contact RECO
To file a complaint with RECO about a brokerage or real estate agent, visit the complaints section of the RECO website.

Real Estate Council of Ontario
3300 Bloor Street West
Suite 1400, West Tower
Toronto, ON Canada M8X 2X2

Phone: 416-207-4800
Toll Free: 1-800-245-6910
Consumer inquiries: information@reco.on.ca
http://www.reco.on.ca

Where to get more information

For more information about buying and selling property in Ontario: RECO’s website.

For the legislation that governs brokerages and real estate agents trading in real estate in Ontario: Trust in Real Estate Services Act, 2002.