In my opinion, Agency Disclosure is a concept that has been long overdue. It used to be that consumers were lulled into a false sense of security thinking that the REALTOR showing them homes was "their" agent. The truth of the matter was that since the REALTOR was being paid by the Vendor, that the fiduciary duties owed by tat REALTOR were to the REALTOR'S client, technically the Vendor, and not the Buyer.

Conversely, Buyers assumed that the REALTOR showing them homes owed them a duty of undivided loyalty, confidentiality, full disclosure, obedience, reasonable care, diligence and accounting for funds and documents. However, while the REALTOR in those situations did owe some duties to the Buyer, the true master of the REALTOR was in fact the Vendor.

January 1, 1995 brought about change to all of this. All REALTORS must now fully disclose, in writing, who it is that they are working for - either the Vendor or the Purchaser. A REALTOR can either work for the Purchaser, the Vendor or for both parties as a "dual agent".

All Realtors must now fully disclose, in writing, who it is that they are working for - either the Vendor or the Purchaser.

Agency Disclosure, and the new rules, has brought about a lot of advantages to consumers since it eliminates any illusion or "gray" area as to whom it is that the REALTOR is working for. That issue must be disclosed in writing at the onset of the relationship between the agent and the client. This clarity and avoiding of uncertainty can only be a good thing for consumers.

For the REALTOR, the advent of Buyer Agency also comes with its advantages. One of the advantages for REALTORS who become Buyer Agents is that the buyer who signs the Purchaser Agency Agreement, is bound by contract to work with that REALTOR for the length of the Agreement. This avoids some of the uncertainty which plagued agents who had the misfortune of having to work for buyers who "hired" several agents at the same time. Further, the Agency Agreement also has a 90 day "holdover clause" in it, much like Listing Agreements have. This provides further protection for the REALTOR who spends time showing prospective buyers potential homes.

Some REALTORS have even started referring to themselves as "Buyer Agents" and committing themselves entirely to Buyers and, thus, take no Listings. This is a unique marketing tool. No matter what the future brings for the real estate industry, change is inevitable. Real estate industry trends, economic conditions and consumer demands will have a significant impact on whom the agent represents. Once consumers understand agency relationships and their options, the real estate industry must reshape itself to satisfy those needs, while at the same time protecting themselves legally.

Editors Note: The Toronto Real Estate Board (TREB) differentiates between Agency and compensation. It is possible to be paid by the Vendor and owe Agency to the Purchaser. Finally, TREB's Purchaser Agency Agreement does not have a fixed number of days for holdovers, (it is blank and to be filled in by the REALTOR), therefore, the reference to "90" should be considered an arbitrary statement.

As seen in Today's REALTOR, November 1997.