We need to have Designated Agency in Ontario
Currently according to RECO and the Ontario government when a buyer or seller hires a person who is an Ontario REALTOR "agent" to represent them in a real estate transaction, that REALTOR (individual) becomes their "agent." The law in Ontario is that the buyer or seller contract is with the Brokerage and not with the individual agent, so everyone working for that brokerage becomes an "Agent" for the buyer or seller.
This means that all "agents" from a brokerage who have an offer on any property listed by any agent from that same brokerage are in what is called a multiple agency situation (used to be called dual agency).
It gets even more complicated. If 2 or more "agents" from the same brokerage have offers on another brokerages listing, then they too are in a multiple agency situation. Most times in a larger brokerage you don’t know who has an offer on what property and all of a sudden, at the offer table, you find another "agent" from your own brokerage has an offer too. Both of these agents must then go to their clients and inform them they are in a multiple agency situation and need to get some new forms signed, and have to tell them that they now have to follow the multiple agency rules, which basically say that their "agent" can not now negotiate for their best interest. because they have to be fair to the other client form their brokerage.
This is all very confusing to everyone, "agents" and consumers alike.
Agency law has been set up this way because it is believed that all agents working for the same brokerage have a conflict of interest if they are in what is currently defined as a multiple agency situation. In reality most "agents" actually work for their specific clients no matter what the agency law says. This leads to nothing but confusion.
The only time there really is an actual conflict of interest is when a listing "agent" becomes the ‘agent" for a buyer of a property where that "agent" is also representing the seller. How often does a listing "agent" explain to a seller the rules of multiple agency, especially where the listing agent can not now negotiate for the best interests of the seller which may cost them thousands of dollars? No wonder everyone is confused and RECO gets lots of complaints from consumers regarding the problems that arise out of multiple representations.
The leadership solution is to demand that Ontario and RECO adopt designated agency, which has been pioneered already in many progressive jurisdictions.
Designated agency means that individual "agents" are designated to be the agency representatives of each individual buyer and seller. The brokerage itself is not designated as the agency. This means that all "agents" working for the same brokerage would not be in multiple offer situations when they have a buyer who wants to put in an offer on one of the brokerages listings, or when there is more than one "agent" from the same brokerage representing buyers competing for any listing. It would be like the real world works and the confusion would be reduced dramatically.
What Designated Agency also means is that multiple agencies would only take place when a listing "agent" also is the "agent" for a buyer, or when an "agent" is representing more than one buyer for the same property. In both of these situations there are huge conflicts of interest and multiple agencies in these situations would be not allowed.
This does not mean that an "agent" can not represent both parties to a transaction, but the representation would have to be agency for one and customer status for the other. A listing "agent" can still "double end" a property, but the buyer would have to be signed as a customer and not a client. This is fair and would take away the confusion, and a lot of RECO complaints.
Vote for Michael Manley and he will push the industry to adopt Designated Agency. Vote Now.
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