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Buyer Representation

Comparison of Service with a Buyer Agency Agreement


No Agreement

Buyer Agency Agreement
  • Maintain loyalty to seller's needs
  • Tell seller all that you learn about the buyer
  • Focus on the seller's property
  • Pay full attention to the buyer's needs
  • Buyer can talk freely in confidence
  • Suggest alternative solutions




No Agreement

Buyer Agency Agreement
  • Get the best offer for the seller
  • Limit properties to listed properties only
  • Lower level or responsibility to buyer-customers
  • Show properties listed in buyer’s price range
  • Find the best property for the buyer
  • “Leave no stone unturned”
  • First opportunity to view new listings
  • All properties are available




No Agreement

Buyer Agency Agreement
  • Just the facts
  • Protect the seller
  • OK to give advice with facts
  • Educate and protect the buyer




No Agreement

Buyer Agency Agreement
  • Disclose only material facts to buyer
  • Negotiate on behalf of seller
  • Volunteer a CNA for the buyer only if it supports the seller's listing price
  • Attempt to negotiate approved protective clauses into the purchase agreement to protect seller
  • Suggest financing alternatives to the buyer in order to help benefit the seller’s interests
  • Continue service to seller during negotiations
  • Strengthen the seller’s negotiating position
  • Share all information about buyer
  • Educate the buyer
  • Negotiate on behalf of buyer
  • Provide price counseling for a buyer to see if the property is over priced
  • Suggest approved protective clauses for the purchase agreement to protect the buyer
  • Suggest financing alternatives that may be in buyer’s best interests
  • Continue service to buyer during negotiations
  • Strengthen the buyer’s negotiating position
  • Share all information about seller




No Agreement

Buyer Agency Agreement
  • Attempt to solve problems to the seller’s satisfaction
  • Attempt to solve problems to the buyer’s satisfaction


How Buyers Are Protected Through The Buyer Agency Agreement

Undoubtedly there is no other issue in real estate more misunderstood than the purpose of the Buyer Agency Agreement. If buyers don’t understand the agreement, why would they sign one?

If buyer’s opted out of entering into a Buyer Agency Agreement they may leave themselves exposed to the following:

  • Paying too much for the property
  • Working with agents who use everything you say against you during the negotiations
  • Having agents pass information about you to the seller so the seller can obtain a higher price
  • Working with an agent whose loyalty is to the seller and not to you
  • Not receiving market information that shows the seller’s listing price is too high
  • Not receiving the protective clauses in the offer that protect the buyer
  • Not receiving financing alternatives that may be in the buyer’s best interest
  • Receiving only information from an agent and not advice, support or direction
  • Working with an agent who pays attention to the seller’s needs
  • Not being shown all the suitable properties
  • Not being provided with price counseling
  • Agents who will not share important information about the seller
  • Agents that do not wish to solve problems to the buyer’s satisfaction
  • Not receiving adequate education or service

It’s certainly no wonder that buyers who suffered from such ill treatment as described above demanded that government take action to provide a solution to protect the public. The Buyer Agency Agreement was created to be that solution. So the real question becomes, if the Buyer Agency Agreement protects and safeguards the buyer at no cost to the buyer: Why is there still some people trying to purchase real estate without it. The answer is both simple and embarrassing. The real estate brokerage community has done a poor job of educating the public.

Since the Buyer Agency Agreement is based entirely on Agency Law, real estate brokers have been attempting to explain the laws that make the Agreement work. The problem with doing that is that the law is extremely complicated and far too often agents only succeed in confusing their clients. Therefore to try and end the confusion I have decided to explain how the Buyer Agency Agreement benefits the buyer in simple language.

How it Works

When real estate agents are hired to represent you in a real estate transaction they owe you duties and commitments such as professionalism, full disclosure, confidentiality, advice, accountability, care, loyalty and the responsibility of looking after your best interests. When all these things are provided you can bet an agent will have a satisfied client. So what happens if a buyer enters into a real estate transaction without formally hiring an agent in writing? Who is looking after the buyer’s best interests? The short answer is NOBODY!

Prior to 1991 all agents worked for the seller. Both the listing agent and the agent who submitted an offer on behalf of a buyer worked for the seller. The fiduciary duty of both agents was to do everything in their power to represent the seller’s best interest and to obtain the highest price, together with the best terms, possible for the property. This was a terrible situation for the buyer. The agent who the buyer called upon to represent his interests was really representing the interests of the seller. Everything that agent heard or learned about the buyer would be used against him to aid the seller in negotiations. The agent had a legal responsibility to tell the seller such things as the buyer’s motivation, bargaining position, their level of desire to obtain the property, how high they would go in price, the amount of mortgage they were pre-qualified for, etc. It’s easy to understand how angry buyers would become when they learned that they didn’t get the deal they wanted because both agents, including the agent they thought they hired, were working against them. The agent’s only duty to the buyer was to provide simple information and nothing else.

Now that the Buyer Agency Agreement is available, buyers can formally hire an agent to work directly for them to protect their interests. The Agreement states that the seller still pays for commission, but now the agent’s sole duty is to get the buyer the best deal possible. This agreement is disclosed to the seller and his listing agent so that all parties understand that the buyer has hired his own agent. No longer will information flow to the seller that will harm the buyer in negotiations. No longer will information be held back that may benefit the buyer.

Under the Buyer Agency Agreement it’s now the agent’s duty to make their best and professional efforts to provide the buyer the following:

  • The lowest home price possible
  • Gather all relevant property information
  • The best terms possible
  • Share all information about the seller
  • Complete loyalty
  • Strengthen buyer’s negotiating position
  • Attention to buyers needs
  • Suggest financing alternatives
  • Full Disclosure
  • Provide protective clauses for the offer
  • Accountability
  • Provide price counseling for the buyer
  • Education about the market and process
  • Negotiate on the buyer’s behalf
  • Confidentially
  • Attempt to solve buyer’s problems
  • Find the best property for the buyer

To further protect buyers, the Real Estate Council of Ontario demands that agents clearly explain the Buyer Agency Agreement to their buyers and have their buyers sign an acknowledgement that the agent has done this. In addition, agents must have a Buyer Agency Agreement signed before they show any properties.

If an agent doesn’t bother to explain the agreement, doesn’t have an Agreement signed before showing properties, or is prepared to make an offer for you without having an Agreement in place, you have an agent knowing breaking the laws that protect your interests. Can you really afford to work with that agent?


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