In our organized real estate system, commonly know as the Multiple Listing System (MLS), sellers have always signed an agreement, in writing, when they decided to put their homes up for sale on the MLS. This MLS agreement set out the rights & obligations of both the seller and the realtor. It also clearly stated the agency relationship, namely that the seller is being represented by the listing agent.

On the other side of the real estate transaction, one step in the buying process has now changed! Changes have occurred at the provincial level and have changed for the better protection of the public. Purchasers are now required to sign a similar agreement to work with a realtor.

RECO, the Real Estate Council of Ontario, is the self-governing arm of the real estate industry. In a move to increase consumer protection, RECO introduced several enhancements including: (1) mandatory continuing education (2) an amended code of ethics (3) mandatory written documentation for purchasers who are being represented by a realtor.

Since January 1, 2000 the real estate industry in Ontario has been required to put their agency relationship in writing, in the form of a Buyer's Agency Agreement, outlining the fact that a purchaser is being represented by a specific real estate agency. In the past, purchasers could casually enter into an agreement, whether verbally or by understanding. Under RECO requirements, this is no longer the case. Buyers are required to sign a Buyer's Agency Agreement at the first convenient opportunity.

A Buyer's Agency Agreement is a standard form in Ontario between realtor and purchaser. Much like the MLS listing agreement signed by sellers, there are also rights and obligations of the purchaser spelled out in detail.

There are tremendous advantages to a buyer to have this agency representation:

1. independent advice and advocacy - the real estate salesperson provides advice on current market conditions, value, sales in the area, and negotiation strategy. At all times, the realtor would be acting in the buyer's best interests.
   
   
2. confidentiality - all personal information is kept confidential from the seller (except in a situation of "dual agency").
   
   
3. full disclosure - stating all information the realtor may obtain about the seller or the property.
   

For more than 50 years in our local board area, and throughout North America, the sellers have covered the realtor's fee. Hence, in 99.9% of times, buyer's agent's fees will still be paid by the seller.

There are primarily 3 times however whereby the buyer would be asked to compensate their real estate agent:

1. if the buyer bought a brand new home from a builder who didn't list their properties on the MLS system.
   
   
2. if the buyer bought a home that was privately listed for sale by its owner.
   
   
3. if a buyer bought a home through a different realtor (other than the one with who they have signed a Buyer's Agency Agreement).
   

The Buyer's Agency Agreement is technically signed between a buyer and a specific real estate firm.

My client purchasers who enter into a written Buyer's Agency agreement automatically move to an "A" list, receiving a gold standard of preferred service. Without question, there are many benefits for buyers to select one specific realtor whom they feel comfortable working with.

For more information on Buyer's Agency, please feel free to contact me. I would be happy to send you a blank form, as well as a "Working with a Realtor" form which outlines the various agency relationships.

Best wishes in the search for your perfect home!

* not intended to solicit properties currently listed for sale