Realtor’s Duty to Clients

No question buying or selling a home in Greater Toronto is expensive. Axess Law’s licensed real estate lawyers help you get more for your money by making real estate closings affordable.

We could suggest using discount real estate brokerages, like 1% realtors or flat fee services like Purple Bricks or For Sale by Owner to keep costs down. Taking advantage of private sales saves realtors’ commissions. Using a family friend, handling sales yourself or letting a realtor represent both you and the seller (dual agency or multiple representation) are all perfectly good tactics.

If, on the other hand, you want advice from an Ontario realtor, you can expect:

  • advice on deciding what kind of home you want
  • notices of open houses
  • showings of Multiple Listing Service properties that fit your home buying profile 
  • information on neighbourhoods you may be interested in
  • up to date comparatives on home prices in your area
  • assistance drafting an agreement of purchase and sale
  • help making counter offers or amendments
  • introductions to mortgage brokers, insurers, movers and other services you may need
  • and if you are selling, can advise on staging your home and present written offers for you to consider.

Are You a Client or Customer?

Most Ontario home sellers and buyers sign a client representation agreement. It gives you all the advantages and expenses a full service realty brokerage can offer. The agreement ensures your realtor promotes and protects your best interests, known as their fiduciary obligation to you. Signing the offer means your realtor agrees to organize showings and negotiate written offers for you.

But if you’re used to buying or selling properties yourself, a customer service arrangement may be all you need. Customer service agreements are legally binding and let you ditch the realtor’s commission by doing most of the work yourself. 

For example, you might sign a customer service agreement to get help with home staging, open houses or advertising a property for sale, but take written offers yourself. You pay only for the services you use, without the commission.

Realtors’ Obligations to You

You can still count on your realtor for fair dealing, honesty and integrity. 

  1. Realtors must take due care information they give you is accurate and not misrepresented. They will protect your personal information and not disclose or sell it to third parties, including marketers, without your permission.
  1. Realtors are only required to disclose information they already or ought to know about a property to customers. Because you may not get all the material facts on a property, a home inspection is recommended. Clients are owed a higher duty of care. That includes taking reasonable steps to research, investigate or consult before giving you information or advice you rely on to buy or sell property.
  1. Your realtor must disclose all offers they receive for your home, unless you have a customer service agreement. If you are the buyer, they will disclose if a seller has pending offers or you are part of a bidding war. They must present your offer as written and may make suggestions about how to make your offer more attractive.
  1. Sellers and buyers are not obligated to accept realtors’ advice, but as long as you have a signed client representation agreement, you cannot ask another realtor to represent you or negotiate a sale directly. If a bidding war occurs, your realtor can’t coerce or unduly influence you to offer more than you want. Your realtor may owe you damages if they breach their contract with you.

Axess Law advises to weigh your needs carefully before you sign any agreement to ensure you get the help you need buying or selling a home. 

Paying Realtor Commissions

Your realtor will only charge a commission if they successfully help you buy or sell your home. Commissions range from 1% to 9%, depending on what services you contract for. If you feel a commission is unfair, you can complain to the Real Estate Council of Ontario (RECO).  

Who Gets the Deposit

Realtors typically suggest a deposit of one to three per cent of the purchase price (more in competitive markets) to make your offer more appealing. Your deposit is held in trust by the real estate brokerage until the sale is concluded. You may withdraw your offer without penalty before it expires, provided you haven’t paid a deposit. 

If you withdraw your offer because some of your conditions are not met, your deposit may be refunded. But if you fail to make your offer conditional or specify you want the deposit back if the deal falls through, you may forfeit part or all of it or, worse, have to compensate the seller for the inconvenience.

Since your agreement is legally binding, Axess Law recommends reviewing it with our real estate professionals by video conference call before you sign. We do remote video calls throughout Ontario or can meet you at any of our Greater Toronto Area law offices. Our flat fee rates make buying or selling a home affordable. You pay just $999.99 and up to buy a home or $799.99 and up to sell.

Buying Damaged Property

When you buy property, you expect it to be in livable condition. Unless you hire a home inspector, you could be inviting problems. Ontario realtors are not required to give you a seller property information sheet (SPIS). Fortunately, your realtor cannot withhold information from you at a seller’s request. You may have a legal action if a realtor misrepresented how serious visible defects were — they’re called patent defects you could discover on your own — or the seller hid latent (not visible) defects like a faulty foundation. 

When to Sue

Your realtor (or a seller) may have wronged you if they:

  • didn’t mention major defects or material facts like a costly strata assessment they knew about
  • disadvantaged you, such as your realtor telling a seller you were willing to pay more than offered
  • represented both seller and buyer without consent. called dual agency or multiple representation — real estate brokers can be fined up to $50,000 for “double-ended” sales
  • put their interests first, such as your realtor was paid by a competing buyer to withhold offers or promoted a mortgage broker who paid for referrals
  • secretly profited by buying a property you made an offer on
  • neglected to use skill, competence and care, including missing deadlines or failing to give sellers your offer.

Ontario courts look to what a reasonably careful real estate agent would do. Axess Law’s real estate attorneys can advise if you have a legal case against a realtor and refer you to lawyers who can represent you.

Book Video Call Appointments Online

Call us before you make an offer to purchase or sign a real estate representation agreement you find unclear. Remote video call appointments are available 7 days a week, day or evening, at your convenience. Book online with our easy web form or call our 1-647-479-0118 lawyer line, toll free at 877-522-9377

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