Thinking of Putting your Offer in with the Listing Agent? Read This First!

Some Buyers think that working with the Listing Agent, instead of having their own Buyers Agent is the key to getting the best price on a home. Before you scroll the MLS, or walk into an open house unrepresented I urge you to read this post so you can be informed of the truth regarding this form of 'multiple representation.'

First, lets understand the two ways a Brokerage can represent you in Ontario.

1. Brokerage Representation: The brokerage and ALL its agents represent you and must promote and protect your best interests. One of this brokerages agents will likely be your primary contact.

2. Designated Representation: One of the brokerages agents is your designated representative and will promote and protect your best interests. The brokerage and its other agents must treat you impartially and objectively.

Designated representation helps reduce the likelihood of multiple representation.

Multiple representation: Occurs when the brokerage or designated agent represent more than one client with competing interests in the same transaction.

Example: Brokerage Representation: Brokerage represents both buyer and seller in the transaction, or two or more competing buyers interested in the same property.

Example: Designated Representation: Multiple Rep. occurs when the same real estate agent is the designated representative for both the buyer and seller in a transaction, or for two or more competing buyers interested in the same home.

In order for multiple representation to occur both buyer and seller MUST consent.

How does this form of representation look?

1. The brokerage or designated representative MUST remain impartial to each client.

2. They cannot have undivided loyalty to you, or promote or protect one clients interests over the other.

3. They cant offer advice pertaining to the price the seller might be willing to accept, or the amount a buyer would be willing to pay for a property.

4. They cant share your confidential information without your written consent.

What Are the Risks When Entering Into This Form of Representation?

First of all, this method does NOT guarantee you will win a bidding war. The Listing Agent will technically see all offers, but it would be highly unethical and against our code of conduct to tell you the exact amount you would need to submit to win the house.

If you are a first-time or inexperienced buyer, you are missing out on the value of a Realtor. You will not have a trained negotiator by your side, and you will not get any advice or counsel from the Listing Agent, they become more of a go-between for you and the Seller.

You wont really be saving any money by using the Listing Agent. The commission agreement is between the Listing Brokerage (that The Listing Agent works for), and the Sellers. If the Listing Agent cuts their commission, this money will end up in the Sellers pocket, not yours.

Finally, just remember its the Listing Agents job to sell THIS house, their focus is not on finding the right house for you. Using your own Buyers Agent means the agent will be motivated to find your perfect home, and ensure it will be perfectly suited to your unique needs.

So, while Multiple Representation is legal, it doesn't mean it is fair to both parties. The good news is that with the introduction of "designated representation" the Listing Agent can recommend another agent at their brokerage to represent you in the transaction, and if you are interesting in buying with the Listing Agent, make sure you understand the limitations and risks before you sign anything!