What is Agency?
Agency is a relationship established when two parties agree to have one party act on behalf of the other. In a real estate transaction, the real estate brokerage acts on behalf of a buyer or a seller.
The agency relationship exists between the Client (buyer or seller) and the Agent (the brokerage, including its broker, associate brokers and associates). Brokerage service agreements, which describe in detail the duties of each party, are the means by which buyers and sellers become fully informed about the prospective relationship with the brokerage and expressly consent to it.
The Client has the duty to pay any agreed compensation to the brokerage and disclose any matters that could affect a transaction.
Agency Duties
The essence of the agency relationship is that the Agent has authority to represent the Client in a real estate transaction. The complex and important nature of a real estate transaction requires the Agent to exercise discretion and judgment when carrying out duties on behalf of the Client. Agents are obligated to protect and promote the interests of their clients and have the following obligations:
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All told, you are entitled to ___ and should expect ___ competent service from your Agent, knowing that the brokerage and its representatives are bound by ethics and the law to be honest in every real estate transaction.
REALTOR Practice
REALTORS® (members of a real estate board and its provincial and national associations) must disclose the type of agency relationship in order to comply with the Real Estate Act and the REALTOR® Code of Ethics of the Canadian Real Estate Association. They require that the agency relationship be discussed at the earliest possible opportunity, long before a Purchase Contract is signed.
To facilitate this, AREA created an Agency Relationships guide to be used by REALTORS® in discussions with buyers and sellers. It helps the REALTOR® explain the agency relationship and seeks written consent for a potential dual agency relationship. (Dual agency occurs when one brokerage represents both buyer and seller in a real estate transaction.) The guide is not a contract and does not impose contractual obligations. Ask your REALTOR® for a copy.
* Source: Alberta Real Estate Association (AREA)
