Understanding the Implications of Dual Agency
Special to The Okanagan Weekend
The whole world is changing and real estate is right up there with the rest of the world. Why does this matter? How does it affect you?
Under the proposed new regulations beginning sometime in the new year, it has been strongly indicated that the Superintendent of Real Estate in B.C. will set down new ruling and eliminate dual agency in B.C.
The problem with this, is the public doesn’t really understand what that means. Dual agency is when a realtor represents both parties. Both sides are represented by the same agent, the seller side through the listing agreement and a buyer who has built a trust relationship with the buyer agent, whether a newer relationship or a long standing one.
Where this has gone wrong in the past, is the public and some agents, are not understanding what an agent/realtor’s fiduciary duties are to their client, vs. a customer (a new potential buyer or seller) they have just met at an open house, on the phone to show one house or via email or other sources. Those people are customers and the listing agent represents the seller, not the buyer. Too much time has been spent worrying about who is getting paid and not enough education or time has been spent ensuring agents take the time to explain a buyer’s rights and choices when the buyer is unrepresented or in a customer, no agency relationship.
There are documents to educate the consumer as to the differences in agency, customer vs client. Dual agency is a consumer right and with education and disclosure of the agent’s responsibilities, the consumer has always had the right to choose.
It has been brought to the attention through media that realtors will no longer be able to “double end” / double dip”, except in some smaller communities. So, the ruling is not for all agents province wide, nor does it necessarily work in the best interest of buyers and sellers. It is not about the remuneration of the agent – but it is about the relationship you have with your real estate agent and about how you are represented and your right to choose your real estate agent!
If you have been working with your realtor in an established agency and trust relationship for any length of time, you are considered a client. You have learned to trust your agent. Under the new ruling, you are still able to work with your realtor, however, if that agent lists a home you want to buy, the new ruling would prevent you from buying that particular property through your trusted agent in an agency relationship.
Realtors will still be able to represent a buyer and a seller on the same property, however the buyer will be unrepresented with no agency, no fiduciary duty and considered a customer, regardless of any prior agency relationship – or the buyer can choose another agent with whom they have no prior relationship and enter into agency representation, basically with a stranger with no prior working history.
This decision could cause more of the public to become unrepresented buyers and in some instances, unrepresented sellers. It is hard to determine, at this time, if in fact this decision works in the best interest of the public or the consumer.
Agency has always been considered to be forever. Under the new proposed service, agency would only last the duration of the transaction or until the expiry of the service agreement.
When representing a buyer in an agency relationship, an agent should be looking out for the best interests of the buyer, showing them every home on the market that meets their criteria, regardless of who has it listed, which brokerage it is or what the amount of remuneration is being paid.
It is possible this new ruling could be detrimental to you as a seller. Your listing agent will no longer be able to introduce your property to their clientele or “rolodex”, if those clients want to continue with their agent of choice. Those clients would have to be represented by a different agent.
In Canada and in B.C., we, the people, have always had the right to choose who represents us, who we want to work with. Is it important to you to be able to work with the REALTOR® of your choice?
Want more information? Send your thoughts, questions and comments to Sharon@SharonBlack.ca.