What is multiple representation in real estate?

I’m interested in a house, but the brokerage representing me is also representing the seller. What do I need to know about this arrangement? This question may seem rather more common as more with the hike in multiple representation transactions 

When the buyer and sellers are clients of the same brokerage, it’s known as multiple representation, which is sometimes referred to as dual agency. The term applies even if you are dealing with different representatives who work for the same brokerage.

Multiple representation can also arise if two buyers are interested in purchasing the same property and they are represented by the same brokerage. Although it’s common for multiple representation to occur in the real-estate market, there are caveats you should know about.

For example, the brokerage will know about the seller’s home and sales strategy. This could be valuable to you when you put together an offer. On the other hand, it has information about your circumstances that could be useful to the seller during negotiations. You can see where a conflict of interest could exist.

This is why, when a potential multiple representation situation arises, there are disclosure requirements in Ontario. The brokerage will give you certain information so you can make an informed decision. First, it will disclose it proposes to represent more than one client in the transaction. Second, the brokerage will disclose how its obligations to promote and protect your best interests will differ compared to if they represented only you.

Typically, the differences will include the disclosure of information, as well as the services the brokerage is able to provide. These disclosures should be made in writing to prevent disputes later on. No matter what happens, the brokerage must always deal with you fairly, honestly and with integrity, and provide you with conscientious and competent service.

You and the other person have to consent in writing before the brokerage can proceed with multiple representation. If one client doesn’t provide written consent, the brokerage must release one of the clients. It’s then up to the brokerage to decide which client to keep. If it releases you, you’ll have to find another brokerage, and could ask for a referral.

There’s also a difference between a client of a brokerage and a customer of a brokerage. The difference is relevant because the rules about multiple representation only apply when the brokerage has two clients involved in the same transaction.

When you’re a client of a brokerage, your real-estate professional will guide you with his or her knowledge, experience and strategic abilities, and have to look out for your best interests.

In contrast, a customer receives more limited service. For example, a customer buying a home shouldn’t expect their representative to analyze and discuss any shortcomings of a property. A client, on the other hand, would receive this service. Typically, a customer relationship is best suited to buyers and sellers who are familiar with the real-estate world, and don’t need the extra help.

When it comes to multiple representation, it’s important to think it over and make sure you understand all the implications before you decide how to proceed. 



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