May 18th - 2005

Disclosure the focus of Agency practice

“Who is looking out for my best interest?” Home sellers and buyers alike will certainly have the question foremost on their minds when they enter into the process of buying or selling a home.

“Who is looking out for my best interest?” Home sellers and buyers alike will certainly have the question foremost on their minds when they enter into the process of buying or selling a home. Ensuring they have a clear understanding of the role and relationship of a buyer’s agent or a seller’s agent will not only gain their confidence, but will avoid confusion down the road.

Both the RECO and CREA Code of Ethics look to guard against confusion, and to protect the consumer. Article 3 of CREA’s code requires written disclosure from “all parties to a transaction regarding the role and the nature of the service the REALTOR will be providing to the clients versus the customer or other party to the transaction”.  

OREA’s Agency Practice course, now available on CD-ROM, looks at the day-to-day concerns about agency and how it’s put into practice. It also examines some of the different forms used by REALTORS and how they comply with the requirements of agency law and the RECO and CREA Codes of Ethics.

Useful tools
REALTORS can use the “Working with a REALTOR” brochure to help explain the various agency relationships to the consumer, and help members meet code requirements. The brochure gives a simple explanation of the types of agency and describes:

Seller’s Agent: explains a listing agreement, fee arrangements, and disclosure.

Buyer’s Agent: explains a buyer agency agreement, REALTOR’S services and dealing with confidential information.

Dual Agency: explains dual agency relationship.

Code of Ethics: explains REALTORS duties under the code.

The brochure also contains an acknowledgement by the clients that they understand the agency relationship.

Another tool, OREA’s Confirmation of Co-operation and Representation – Form 320, serves two purposes. It confirms a listing broker’s agreement to co-operate and pay commission to a co-operating broker upon the sale of a particular property, and it discloses the agency role of the broker or brokers involved in the transaction.

Form 320 should be used at the time of substantive negotiations so that all involved are aware of the relationships and will act accordingly. Use it to avoid confrontations and unnecessary disputes.

The form should be signed by the buyer and the buyer’s representative and then by the seller and the seller’s representative. REALTORS can take the opportunity to renew the discussions that were held originally and remind and reinforce to consumers the roles of the various professionals and the expected conduct of the parties.

CD-ROM convenience
The beauty of taking the course on CD-ROM is that you can take as much or as little time as you want to complete the course and you can work on it whenever and wherever you want. Once all the modules and the final course quiz are successfully completed, as well as a course evaluation, you will be eligible to print your Certificate of Completion. A URL link is provided on the last page of the course which directs you to the OREA Real Estate College website at www.oreacollege.com where you will be asked to enter your OREA Student ID number and course key code. Once authenticated by the OREA Real Estate College, you will be eligible to print off your course receipt right to your personal computer.

The Four Ds of Agency Practice
A simple approach to help you avoid potentially costly mistakes is to remember the Four Ds of agency:

  • Decide who you are representing.
  • Disclose to all parties who it is that you are representing.
  • Document in writing your agency relationships.
  • Do what you said you were going to do.

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For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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