A Realtor is always an agent for someone in the transaction and is obliged to look after the best interests of the person for whom he or she is working.  It is important to know in advance who the Realtor is representing.  There are three basic forms of the relationship:

1. Vendor's Agent

When a real estate company is a "vendor's agent", it must do what is best for the persons selling a property.

A vendor's agent must tell the vendor anything about a purchaser. For instance, if a vendor's agent knows a purchaser is willing to offer more for a property, that information must be shared with the vendor. Confidences a vendor shares with a vendor's agent must be kept confidential.

A purchaser can expect to be treated with fairness and have all pertinent information about a property disclosed. In other words, there can be no misrepresentation of the property.  An Vendor's agent will not tell you in advance what the vendor would be willing to accept.  The agent's job is to help the vendor get the most out of the transaction.

2. Buyer's Agent 

In the past Realtors met prospective buyers at an open house or through a phone call on an advertisement.  The relationship was informal.  When a house was found sometimes after a lengthy search, an offer was presented and the Realtor was paid of the commission paid to the 'listing broker' - (the company with the sign on the lawn).  As of January 2000 Realtors were obliged by the governing body of the real estate business in Ontario, the Real Estate Council of Ontario (RECO),  to enter into a formal buyer's agreement.  The "Buyer Agency Agreement" must be signed "at the earliest practical opportunity, and in all cases before any Offer to Purchase is submitted or presented." 

This written contract establishes purchaser agency. It also explains services the Realtor will provide, spells out who will pay and specifies what obligations a purchaser may have. Typically, purchasers will be obliged to work exclusively with that Realtor for a period of time.  There may even be a commission payable by the purchaser.

A REALTOR working for a purchaser will keep information about the purchaser confidential from the vendor.