RECO has a new guide, which is effective from December 1st, 2023.
Some new concepts are introduced such as the self-represented party, the designated representation, etc.
Compared to the brokerage representation, Designated Representation reduces the probability of occurrences of Multiple Representation. The relevant part of the designated representation will be indicated in the buyer presentation agreement.
For details on the change and new regulation and practice, Please click and refer to RECO Information Guide
A buyer representation agreement also called a buyer agency agreement or brokerage agreement is an exclusive contract between the homebuyer and real estate brokerage. The buyer agent is acting on behalf of the brokerage. OREA FORM 300 is used for this purpose in Toronto, Ontario. There are step-by-step instructions below explaining how to fill out this agreement. You can also access other OREA Forms here.
After you sign the contract, the agent will provide fiduciary loyalty to you and protect your best interests. Since the buyer agent commission is commonly paid by the seller, you won't have to worry about it except under special situations such as commission deficiency or/and a holdover period.
At the same time, you are bound by the contract. For example, during the contract period, you are locked by this brokerage and may have to stick with their services.
It is a legally binding contract, therefore, you would be required to seek a mutual release for termination or cancellation and use Form 301. In practice, the brokerage may assign you a different realtor in case you are not satisfied with your current agent. If you persist in backing out of the contract, you may be obliged to fulfill the duties outlined in the contract or face a potential lawsuit.
An exclusive Buyer Representation Agreement means that the buyer gives the exclusive authority to the buyer agent. The realtor represents the buyer to prospect and purchase the property.
The agreement is between the buyer and the agent’s brokerage. The salesperson is acting on behalf of the brokerage. Please read brokerage vs realtor for additional information.
The agreement time validation is negotiable. If it exceeds 6 months, the buyer should be reminded of this and sign to confirm their understanding.
The buyer acknowledges and warrants that he or she is not under agreement with any other agent/brokerage.
"Buyer" is equivalent to "purchaser"
There is also a holdover period time clause to further define the commission obligation of the buyers. It occurs when the home is shown by the buyer’s agent, but it is purchased either by the buyers themselves or through a realtor from a new brokerage.
The relationship between the buyer and the brokerage is either by representation or customer service. Under the representation, the buyer’s agent, who is on behalf of the brokerage, is fiduciary and loyal to you. While under a customer service agreement, the buyer’s agent has no obligation to the buyer in many ways.
The buyer agrees to make no claims to the buyer agent or brokerage in the case of any home issues regarding the condition and improvements, etc.
The buyer agrees that the buyer agent may take other referral fees or rewards.
The buyer agrees to provide consumer reports which contain the personal information and credit report to the seller or other related parties.
The buyer allows the buyer agent brokerage to use the buyer’s information during and after the home buying process. All details are listed in the pre-set terms.
The added supervision to the agreement supersedes the pre-print clauses.
Successors and assigns are bound by the agreement if the buyer dies.
Electronic Communication is applicable.
Additional clauses and terms are listed in the schedule attached to the agreement.
The salesperson has insurance coverage required by RECO.
This guide helps you understand the terms commonly used in the agreement so that you completely understand what you’re agreeing to. To avoid feeling like you’re being rushed to sign something you don’t really understand, please read this guide in advance.
This guide was not drafted by a lawyer. It is only based on an agent’s interpretation and perspective. Please check and verify with your real estate lawyer for completeness and accuracy.
