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Perspectives on Representation

When you call an agent from an ad or a sign, you have to remember that they are working for the seller — and definitely not the buyer. You are talking to the listing agent who was hired by the sellers to list and sell their home. His or her job — and obligation — is to get as much money as possible for the seller.  This ties in with the fact that the agent has an incentive to get more. The higher the sales price, the more money the agent will make.  It may be hard to keep this in mind as you spend time with the agent and feel you know and feel comfortable with them. Even though you begin to trust that agent, never to reveal the highest price you are willing to pay, or other concessions you know you would be willing to make. Because that person represents the seller, and must relay this type of information to the seller.

The flip side of this is also true. Again because the agent is representing the seller, he or she is not allowed to divulge anything that would tip the scales in your favour; — like why the seller is selling or how low the seller will probably go regarding the selling price. Remember, the agent is bound by contract to work to get the best possible deal for the seller.

But you have another option. When you begin your search, you can start by using a buyer’s agency who is working with your best interests (and wallet) in mind. A buyer’s agent will work to negotiate the best price, ensure the property is inspected, and make sure you have all the assistance and guidance you need. Things you tell a buyer’s agent remain confidential. Using a buyer’s agent also means that you can be shown homes that are offered by new home builders or directly by owners. It might seem like using a buyer’s agency means you are going to pay more — but that’s not usually the case.

Although there are situations where agents charge an hourly fee or a flat fee for the service, in most situations they are simply working for the same commission that is paid by the seller through their listing agent. While there is still some argument that this method leaves the incentive for a higher sales price, buyer’s agencies counter by pointing out that a $10,000 savings for the buyer only amounts to a $250 difference in commission for the buyer agent. The benefit of your satisfaction with their service and the word of mouth promotion they will greatly outweigh the small loss of money.

The type of agreement you sign with a buyer’s agent will dictate how the arrangement works. A representation agreement will stipulate, specifically how the agent will be paid. You can negotiate the terms and obligations for both parties up front so both you and the agent know what to expect and are comfortable with the relationship.

If you decide to use a buyer’s agent be on the lookout for dual agency. Usually referred as ‘multiple representation’ it describes the situation where an agent or agents are working on both sides of the fence. For example, an agent with XYZ Realty may represent the seller, while another agent (or the same agent) also with XYZ Realty represents the buyer. There are obviously arguments against this arrangement because of conflicts of interest, but nonetheless, it is still a common practice. In the dual agency situation, both the buyer (you) and the seller must be made aware of the arrangement and privileged information can’t be shared unless you agree to it. Dual agency is a situation that should be avoided if at all possible.

January 30, 2008 in Agency Matters | Permalink


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Great Post. Thanks for Sharing.


Posted by: Marilyn Monroe Condos | Aug 15, 2012 10:50:24 AM

Gr8 post.


Posted by: Marilyn Monroe Condos | Aug 15, 2012 10:49:46 AM

brampton real estate

One of the greatest and most obvious reasons to consider buying a home is the interest rates. Interest rates today, are some of the lowest rates that we have seen in years. It is possible that they will go even lower. You may think that getting a home loan in order to take advantage of these rates is impossible. Although credit standards and loan approval may be higher than before, obtaining a loan is well within the reach of homebuyers with a good credit rating and a steady income that can support the monthly mortgage payments.

Posted by: torontohomeandhouse123 | Jun 11, 2010 5:10:44 AM

Great advice here and "Toronto realtor" is also very correct.

Posted by: Larry Estabrooks, REALTOR® | Apr 7, 2008 8:27:46 AM

I would only like to add that by law you have the right to choose if you will accept dual agency or not. If you are a buyer and you will not sign your consent for dual agency than your agent can not show you properties listed by his own broker.

Posted by: Toronto realtor | Feb 5, 2008 11:03:35 AM

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