As of last month I have been in the Real Estate industry for 22 years. Having lived and breathed Real Estate for so long I sometimes forget that because Buyers and Sellers do not buy and sell Real Estate everyday that they may not share my knowledge about how our industry actually works. This can lead to erroneous assumptions about what is important in the buying and/or selling process.

On the selling side some property owners still believe that the Realtor who lists the property will be the same Realtor who brings the Buyer, when in fact this happens in only approximately 5% of Real Estate transactions. As a matter of fact, in many States in the US, one Realtor representing both the Buyer and the Seller, or Dual Agency, is forbidden. This is because of the potential conflict of interest. In Alberta, according to the laws that govern our industry, Realtors must disclose to a Buyer or Seller their legal relationship at the earliest possible moment.

In practice this means that any Realtor representing the Seller who receives a showing request directly from a Buyer MUST advise the Buyer of their Agency options at the very beginning of the relationship, often before they show the Seller’s home.

 The Buyers can choose a Customer relationship or a Client relationship. In a Customer relationship the Realtor MUST disclose to the Buyer that they will be representing the Seller and that while they have a duty to be fair, the Buyer will not receive “representation” or advice. If they want to receive full “representation” they must choose another Realtor to represent them. If they prefer a Client relationship the Realtor can provide them with “Agency” representation but because the Realtor is also representing the Seller he or she can only provide “Limited Dual Agency”. In Limited Dual Agency the Realtor must not disclose either party’s motivation or final price to the other party and must not favour one Client over another.  If you were a Buyer which relationship would you choose?

Some Sellers also assume that the Listing Realtor will be able to use their “sales” skills to “talk” a Buyer into paying more for their property. As you can see within “Limited Dual Agency” this is impossible for an ethical Realtor.

On the Buying side some Buyers believe that their Realtor will be able to find properties that are not yet listed and that the Buyers will be able to buy that property at a lower than market value price. In this case if a Realtor was able to locate a property that matched the Buyer’s criteria but was not yet listed, under the laws that govern our industry the Realtor MUST disclose to the Seller their legal relationship at the earliest possible moment and give them the options of a Customer relationship or a “Limited Dual Agency “ relationship. In a Customer relationship the Realtor MUST disclose that they are representing the Buyer and while they have a duty to be fair to the Seller they are on their own in a negotiation. If they want to receive full “representation” they must choose another Realtor to represent them.  If they prefer a Client relationship the Realtor can provide them with “Agency” representation but because the Realtor is also representing the Buyer he or she can only provide “Limited Dual Agency”. In Limited Dual Agency the Realtor must not disclose either party’s motivation or final price to the other party and must not favour one Client over another.   In this case if you were the Seller which relationship would you choose?

There is no doubt there is a benefit to working with a professional and ethical Realtor who possesses experience, marketing skills and knowledge. On the selling side their duties include accurately reporting market conditions so Sellers can correctly price their properties, presenting the property well to the organized Real Estate marketplace and to the public, continuing to accurately report market conditions during the listing period and providing sound counsel once an offer is obtained. On the buying side a good Realtor will again accurately report market conditions, assist in the search of available properties, provide sound counsel during the offer process and assist the Buyer during the due diligence period.

Hope this helps…

Susanita de Diego