Understanding Representation and Agency
Representation and Agency are not very well understood by the consumer public…but also not well understood by some salespeople.When a Salesperson is representing a product, whether it be a suit of clothes or a house, they are acting under Agency and their fiduciary duty belongs to the party paying for their services unless they have a contract that says otherwise. If you walk into my Open House and ask me questions about the property, like “what will they take?”, it is my duty to tell you that “they will take the asking price.”
I’m not trying to be smart or glib, but the seller has signed a contract with me and the Company, to sell the property at a price they have chosen under the listing agreement. My duty to counsel is to the Seller, not the Buyer….
If I enter into a Buyer Representation Agreement with the Buyer then, I can offer counsel to the Buyer. I can give information about recent sales in the area, market conditions, my thoughts on the market etc. but only when a relationship has been established in writing between the parties, much as a Listing Agreement sets out the relationship with the Seller and their agent.
There are times, of course, when Multiple Representation occurs. That happens when a property listed with my Company is of interest to a Buyer under contract to our Company. An open discussion can be held with the exception of two major areas:
- If I know what price the Seller would accept or the Buyer will pay, I cannot share that information….
- If I know the motivation for the Buyer or Seller in Buying and Selling, I cannot share that information…
Recently, the Toronto Real Estate began a campaign to try to explain Representation and the need for Buyer Representation especially to the consumer and their Realtor.
Posted by Allen Mayer, Broker http://www.allenmayer.com/
