REALTORS work within a legal relationship called Agency. The Agency (relationship) exists between you (the Client), and the Real Estate Brokerage through the individual Realtor (Agent) representing you.
For you, the Client, it is important to know “who works for who”. Brokerages and its Realtors are legally (as well as ethically) obligated to protect and to promote the interests of their clients, as they would their own. The following are highlights of some of the duties:
The Realtor, amogst other things, must at all times:
(1) disclose all known facts which may affect or influence the Client’s decision
(2) protect the Client’s negotiating position at all times
(3) must obey all lawful instructions of the Client.
(4) has an obligation to keep the confidences of the Client.
(5) has the duty to account for all money and property entrusted in the Agent’s hands while acting for the Client.
(6) deal with all parties fairly
Dual Agency occurs when a Real Estate Brokerage is representing both the Buyer and the Seller in the same transaction, for instance, when a Buyer is purchasing a property from the Listing Realtor, or both the Buyer’s and the Seller’s Realtor are licensed in the same Brokerage. In the case where the Buyer is purchasing the property from the Listing Realtor, since the Realtor now has a duty of confidentiality, loyalty and full disclosure to both parties simultaneously, it is necessary to “limit” these duties. Working within a Dual Agency involves the following limitations:
(1) the Realtor will deal with the Buyer and the Seller impartially
(2) the Realtor will have a duty of disclosure to both the Buyer and the Seller except that of personal information, “bottom line” and motivation why the Seller is selling or the Buyer is buying that could disadvantage either party, unless authorized to do so.
In spite of certain amount of contraversy especially in the USA , Dual Agency works quite well under normal circumstances, since a Real Estate transaction is not a adversarial one and both the Seller and the Buyer are “winners” if a Contract of Purchase and Sale is successfully negotiated.
Working with a Realtor information brochure from the BC Real Estate Association