Real estate listing agents work for the home seller. Why not call them if you are a home buyer? Shortly after the dawn of the information age in the 1970s, people’s appetite for more and better information increased. This trend continued with the introduction of the internet in the early 1990s. Today, buyers of real estate generally begin their searches online and many will ask for additional information on specific listings. A word of caution. When you ask a real estate agent questions about a listing, understand the context of the conversation.
What do I mean? It is important to understand that the Law of Agency changed significantly in British Columbia in June of 2012 when Designated Agency was introduced into the province. This law explains the type of relationship that a person can establish with a licensed real estate agent. It also explains what protections you may or may not have under the law. Understand, for example, that a listing agent has a contract with the seller to help market and sell the property that is listed. The agent’s loyalty is to the seller and not to a home buyer who may contact the listing agent about a specific property. While the listing agent may be happy to talk to you about the property in the hope that you place an offer on it through them so that they can make a commission on both ends of the real estate transaction, this is not in the best interests of the buyer to do so. Be careful what you tell the agent and what you ask of the agent. Depending on what you ask, you may actually be establishing some type of professional relationship without knowing it, and you may divulge information about yourself that could be used later to your disadvantage in a real estate transaction.
The real estate Law of Agency commonly referred to as “Designated Agency” is currently in effect. Prior to 1994, this law was referred to as “Seller Sub Agency” when all real estate agents worked for the seller. Between 1994 and 2012, “Assumed Buyer Agency” contained provisions for Limited Dual Agency when, in many situations, the buyer and seller had to be treated impartially by a single agent working with both parties. In these types of situations, the real estate agent had restrictions placed on them by law concerning what they could and could not tell each party to the real estate transaction. While Limited Dual Agency still can exist today, the number of situations where it could apply has been markedly reduced by the introduction of Designated Agency.
Under current real estate law, there are two different types of relationships (one based on agency or one based on no agency) that could exist between a real estate agent and the person who is either the buyer or seller in a real estate transaction. This person can be either a customer or a client as follows:
- As a customer, the person will not have any agency relationship and the real estate agent can provide you with information and limited services. A good analogy is a person who walks onto a car lot wanting to buy a car. The dealer will try to sell you one but they are not looking out for you;
- As a client, the person will have an agency relationship that will involve either a Limited Dual Agency or Designated Agency.
Limited Dual Agency can apply when a real estate agent is working for two buyers who want to place an offer on the same property or when a real estate agent is working for a seller and a buyer at the same time and the buyer wants to place an offer on the property of the seller. In these situations, both parties have to agree to Limited Dual Agency and if they do, the real estate agent is supposed to treat both parties impartially. There are several other restrictions placed on the agent concerning what they can and cannot do or say. While this may sound reasonable in theory, how well can it work in practice? Would you want a lawyer working for both parties in a lawsuit working for you or would you want the lawyer working only for you and your interests?
When a real estate agent brokerage designates a specific real estate agent to work solely on your behalf in real estate transactions, that agent is a Designated Agent of the Brokerage who represents you and your interests exclusively in a real estate transaction. As a real estate agent, if I were going to buy or sell a home, this is the relationship that I would choose.
So, as a home buyer, if you call a listing agent about a property, understand that the agent is working for the seller and that the only thing they could offer you (if the seller agreed) is a Limited Dual Agency relationship.
This brief discussion merely provides an overview of the new law. To gain a more thorough understanding of the Law of Agency, read the British Columbia Real Estate Association brochure . Working With a Realtor Designated Agency. This brochure provides a more detailed explanation of the relationship between you and a Realtor as well as an explanation of the collection, use, and disclosure of personal information. It is important to note that all Realtors in BC are required to explain this brochure to you at the earliest opportunity, and prior to providing professional services such as the showing of a home or advising on price. If you are working with a real estate agent and if you have not had this brochure explained to you, ask why not.
As a professional full service real estate agent, I am ready to provide you with representation and services on an exclusive basis to help you buy and sell real estate in the Comox Valley. Contact me and let’s talk about how I will go Above & Beyond to help you meet your real estate needs.
by Brett Cairns