Multiple Representation in Real Estate: How Does It Impact You?
What is multiple representation?
Multiple representation in real estate happens when the same brokerage represents 2 or more clients, during the same property transaction. It commonly applies to the listing brokerage representing both the seller and buyer at the same time. It also happens when 2 or more buyers are represented by the same buyer agency.
Is it legal?
Multiple representation is legal in Ontario. RECO has disclosure rules to regulate the brokerage under this situation. Generally speaking, the brokerage should disclose to its clients when multiple representations happen and seek written approvals in Orea Form 320 from all the clients involved.
What are RECO disclosure requirements?
Under multiple representations, the brokerage should act impartially and equally protect both clients’ interests and fully disclose the factual information to both clients as well. However, it is not allowed to disclose
- That the seller may or will accept less than the listed price
- That the buyer may or will pay more than the offered price
- The motivation of or personal information about the seller or buyer
- The price the buyer should offer or the price the seller should accept
- The terms of any other offer to the buyer, though the number of offers is allowed to be released to the buyer.
What does Multiple representation mean to the clients?
It may become problematic if the listing brokerage represents both the buyer and seller.
- The realtors are limited in providing their services to the clients.
- Particularly if the buyers need help on offer price guidance.
- It also presents a challenge to the realtor's moral ethics.
What happens if you don't agree with multiple representation?
If you refuse to sign the assent, the brokerage needs to release one or more of the clients to the other brokerage.
What if I become a customer, the agent provides customer service to me while representing the counterpart?
This scenario normally happens when the listing agent represents the seller and provides customer service to the buyer. The buyer is at a complete disadvantage since the seller, as a client, has full interest protection and loyalty from the agent. All the buyer's confidential information may be allowed to be revealed to the seller. That is the last thing you want to happen.
In Sum
Multiple representation has been a debatable topic in the real estate industry. Before you sign your assent, it is recommended to have basic knowledge of it and to think over what you could gain, what you may lose, and what risks you may take.
