RECO INFORMATION GUIDE

Working With a Real Estate Broker: Things You Need to Know. 

Working with a real estate agent:

Things you need to know

RECO INFORMATION GUIDE

The guide is produced by the Real Estate Council of Ontario (RECO)

RECO regulates real estate agents and brokerages, educates consumers,

and promotes a safe and informed real estate marketplace. RECO administers

and enforces the Trust in Real Estate Services Act, 2002. Find out more on the

RECO website (www.reco.on.ca).1

About this guide

You have received this guide from a real

estate agent because:

• you are considering receiving services from

the real estate agent, or

• the agent is representing a client in the

transaction, and you might receive assistance

from the agent.

Real estate agents in Ontario are required to

walk you through this guide before providing

services or assistance to you.

In this guide:

• brokerage means a real estate brokerage

• real estate agent and agent mean a real

estate salesperson or broker

• you and client mean a buyer or seller

• buyer and seller can also mean lessee and

lessor respectively

Please read the guide carefully and talk to the agent if you have questions.

What’s inside

Working with a real estate agent — page 2

This section describes the benefits of working with a real estate agent, what you can expect,

and the responsibilities of clients.

Know the risks of representing yourself — page 4

This section explains the risks if you choose not to work with a real estate agent and the risks of

receiving assistance from a real estate agent who is working for the person on the other side of

the transaction.

Signing a contract with a real estate brokerage — page 6

When you work with a real estate agent, you sign a contract with the brokerage the agent works

for. These contracts are called representation agreements. This section highlights what you should

look for before you sign.

Understanding multiple representation — page 9

Multiple representation means the brokerage, or the agent represents more than one client in the

same transaction. This section explains how multiple representation works, the risks, and what to

expect if you agree.

How to make a complaint — page 11

Ontario brokerages and real estate agents are accountable for their conduct. This section tells you

how to raise a concern with the brokerage and with RECO.

Legal disclaimer: The content of the RECO Information Guide is intended to help buyers and

sellers make informed decisions. This guide is not intended to act as a substitute for legal advice

or as a replacement for the Trust in Real Estate Services Act, 2002. Readers are encouraged to

retain qualified and independent legal counsel to answer any legal questions or address any legal

issues. Where there is any discrepancy, the legislation will take precedence.

About this guide | RECO INFORMATION GUIDEWorking with a real estate agent | RECO INFORMATION GUIDE 2

Working with a real estate agent

Agents in Ontario must be registered, which requires completing the necessary education,

and carrying consumer deposit insurance and professional liability insurance.

Real estate agents provide valuable information, advice, and guidance to buyers and sellers

as they navigate the complexities of real estate transactions.

If you are a seller, an agent can:

• Advise you on market conditions and the

best strategy to attract buyers and get the

best price for your home

• Market or advertise your home, including

arranging photographs, videos and virtual

tours

• Provide referrals to other professionals you’ll

need, like a lawyer or home staging company

• Arrange and attend home inspections and

appraisals

• Arrange showings for interested buyers

• Advise you on how to handle competing

offers, sharing the content of competing

offers, and other aspects of the transaction

• Vet offers and potential buyers to ensure

they can afford to buy your property

• Negotiate with buyers to achieve the best

results, price, and terms, for you

• Guide you through paperwork and closing

the transaction successfully

If you are a buyer, an agent can:

• Assist you with getting pre-approvals for

financing so you know how much you can

afford

• Make you aware of any tax exemptions

you might be eligible for

• Gather and share information about

neighbourhoods and homes that meet

your requirements, and arrange to show

you homes you’d like to see

• Make inquiries about zoning, permitted

property use, or other aspects of the home

• Advise you on the best approach in

competing offer situations and how

to protect your offer information

• Negotiate with sellers to achieve the best

results, price, and terms, for you

• Guide you through paperwork and closing

the transaction successfully

• Provide referrals to other professionals you’ll

need (for example, home inspectors, lawyers,

or contractors)3

You will also benefit from the duties the brokerage and

agent owe to you as a client

• Undivided loyalty

Your best interests are promoted and protected by the brokerage or agent representing you.

As a client, your interests take priority over the interests of the brokerage, its agents, and any

other party.

• Disclosure

They must tell you everything they know about the transaction or your client relationship that

could have an impact on any decisions you make.

• Confidentiality

Your confidential information cannot be shared with anyone outside of the brokerage without

your written consent, except where required by law, even after your client relationship ends.

This includes, for example, your motivation for buying or selling, and the amount you would

be willing to pay or accept.

• Avoid conflicts of interest

They must avoid any situation that would affect their duty to act in your best interests. If a

conflict arises, they must disclose it to you and cannot provide any additional services to you

unless you agree in writing to continue receiving services.

You have responsibilities as a client

You need to:

• be clear about what you want and don’t want and make sure you share all information that

might be relevant (for example, you might want zoning that permits your intended use, maybe

a home office or another specific use, or you might not want a property where there has been a

violent crime);

• respond to your agent’s questions quickly;

• understand the terms of your agreement with the brokerage; and,

• pay the fees you have agreed on (see page 7), even if an agreement to buy or sell later falls

through because of your default or neglect.

Working with a real estate agent | RECO INFORMATION GUIDE4

Know the risks of

representing yourself

Know the risks of representing yourself | RECO INFORMATION GUIDE

If you are involved in a real estate transaction and are not a client of a real estate brokerage, you

are considered a self-represented party. This means that you have chosen to represent yourself,

which has different rights and responsibilities. Very few buyers or sellers make this choice.

There are significant risks to representing yourself in a real estate transaction if you do not have

the knowledge and expertise required to navigate the transaction on your own. You will be dealing

with a seller or buyer who is benefitting from the services, opinions, and advice of an experienced

real estate agent.

RECO recommends that you seek independent professional advice before you proceed as a

self-represented party.

If you choose not to work with a real estate agent, it will be your responsibility to look after your

own best interests and protect yourself. This may include things like:

• making inquiries about zoning, permitted property use, or any other aspect of the property;

• determining what you believe to be the value of the property you are buying or selling;

• determining how much you are willing to offer or accept;

• navigating competing offer situations;

• deciding what terms you want to include in an offer or agreement of purchase and sale; and,

• preparing all documents.

The real estate agent is working for another party

in the transaction

It’s important to be aware that the agent has a legal obligation to act in the best interests of the

person on the other side of the transaction. If you are a buyer or even just inquiring about the

property, for example, and the agent is working for the seller — the agent has a duty to do what’s

best for their seller client.

Be aware that the agent is obligated to share anything you tell them with their client, which might

not be in your best interests to tell them, including:

• your motivation for buying or selling the property;

• the minimum or maximum price you are willing to offer or accept; and,

• your preferred terms or conditions for an agreement of purchase and sale.5

Know the risks of representing yourself | RECO INFORMATION GUIDE

The agent cannot:

• provide you with any services, opinions, or

advice;

• do anything that would encourage you to rely

on their knowledge, skill, or judgement; or,

• encourage you to represent yourself or

discourage you from working with another

real estate agent or brokerage.

Any assistance the agent offers you:

• is a service to their client, not you;

• is in the best interests of their client, not you;

and,

• is to help their client sell or buy a property.

The agent must give you RECO’s Information and Disclosure to Self-represented Party form and

walk you through it before they can provide you any assistance. You will be asked to confirm you

received it and understand what it means to be a self-represented party.

You have the right to change your mind

If you’re concerned about completing a transaction on your own, or you need advice from a real

estate agent, you can choose to become a client of a real estate brokerage at any point during the

transaction (see Signing a contract with a real estate brokerage on page 6).6

Signing a contract with

a real estate brokerage

When you become a client, you sign a

representation agreement with the brokerage

— a contract between you and the brokerage

for real estate services and representation.

If you don’t want to sign an agreement, you

should not expect the real estate agent to

provide you with any services, like showing

you homes.

Representation agreements can be called

buyer representation agreements, or seller

representation or listing agreements.

Your agreement must be put in writing

and presented to you as soon as possible.

Protect yourself by reviewing the agreement

in detail. This will help to avoid any

misunderstandings between you and

your real estate agent.

What to look for in a

representation agreement

Your representation agreement should describe

the duties owed to you, the services you

will receive, your rights and responsibilities,

what you will pay, and specific terms of the

agreement, including how long the agreement

will last and whether you can cancel it.

Here are some key things to look for.

Name of your designated

representative

There are two kinds of representation

agreements in Ontario:

Brokerage representation:

The brokerage and all its agents represent

you and must promote and protect your

best interests, but one of the brokerage’s

real estate agents may be your primary

contact. They may provide referrals to other

professionals you’ll need (for example, home

inspectors, lawyers, contractors).

Designated representation:

One (or more) of the brokerage’s real estate

agents is your designated representative.

The agent(s) represent(s) you and must

promote and protect your best interests.

The brokerage and its other agents are required

to treat you impartially and objectively.

An important aspect of designated

representation is that it reduces the likelihood

of multiple representation. You can read

more about this in Understanding multiple

representation on page 9.

Designated representation was introduced

in Ontario on December 1, 2023. Ask the real

estate agent what type of representation the

brokerage offers.

If the contract is a designated representation agreement, the name of your designated representative

will be included. More than one real estate agent working at the brokerage can be identified as your

designated representative.

Scope

Your agreement should specify the scope of the engagement. If you are a seller, this means the

agreement will identify the specific property.

Signing a contract with a real estate brokerage | RECO INFORMATION GUIDE7

If you are a buyer, you should consider the scope of the agreement carefully. Your agreement

might identify a specific property, a geographic area you are searching in, a type of property you

are looking for, or other specific requirements. For example, if you are looking for both a house in

a particular city, and a cottage property near a lake, and want to work with different real estate

agents with local and property type expertise for each property, the scope should be clear in each

of the agreements to avoid disputes about who you might have to pay if you buy a property.

Services

The agreement must clearly set out the services you will receive. There is no standard set of

services — brokerages offer a variety of service options. You choose the services you want that

best meet your needs.

You might enter into an agreement with a brokerage for a specific purpose like, for example,

having an agent prepare an offer on a property you want to buy, or viewing a specific property.

Some sellers enter into an agreement solely for the purpose of having their property advertised

on a local listing service.

Ask the real estate agent about the available services or combination of services that may be right

for you and your situation. If there are specific services you need or expect to receive, make sure

they are included in the agreement or as a schedule to the agreement. Don’t assume a particular

service will be provided if it’s not included in the agreement.

Payment amount and terms

You and the brokerage decide the amount you will pay for services. The amount is not fixed or

approved by RECO, any government authority, or any real estate association or real estate board.

You can agree to pay a fixed dollar amount, a percentage of the sale price, or a combination of

both. The representation agreement cannot specify an amount based on the difference between

a property’s listing price and what it sells for.

Agreements must also identify circumstances in which the amounts agreed to might change and

how they will change in each circumstance.

Signing a contract with a real estate brokerage | RECO INFORMATION GUIDE

If you are a seller:

Your agreement needs to clearly indicate:

• the amount you agree to pay your brokerage

(or how it will be calculated) for the services

and representation you receive;

• the amount (or how it will be calculated) you

agree to pay, if any, to compensate the buyer

for their brokerage fees; and,

• how the amounts you agree to pay might

change if you consent to multiple

representation (see page 9).

If you are a buyer:

Your agreement needs to clearly indicate:

• the amount you agree to pay your brokerage

(or how it will be calculated) for the services

and representation you receive;

• how the amount you agree to pay will change

if the seller agrees to cover some or all of your

brokerage fees; and,

• how the amount you agree to pay

might change if you consent to multiple

representation (see page 9).

Important note for buyers: A seller might not offer any amount to cover the fees you owe to your

brokerage under your agreement. This could affect the amount you are able to offer for a property.

Depending on your financial circumstances, you may not be able to afford to buy a property when

the seller does not agree to pay your brokerage fees.8

Signing a contract with a real estate brokerage | RECO INFORMATION GUIDE

Termination provisions

The agreement should list all circumstances when the agreement can be terminated. Review when

the brokerage can terminate the agreement, and make sure you are aware of any penalties or costs

that might apply in each case.

Two important circumstances to be aware of:

• Multiple representation: You do not have to agree to multiple representation, and your

agreement should be clear about what happens in that situation. For example, the agreement

could terminate completely, or you might be referred to another brokerage or designated

representative for the specific transaction but otherwise remain under the agreement with

the brokerage.

• Changing your designated representative: If you have entered a designated representation

agreement, the brokerage cannot appoint a different designated representative unless you

agree. The brokerage may ask to appoint someone else if, for example, your designated

representative stops working with the brokerage, or is otherwise not available to provide

the services and representation outlined in the agreement.

Expiry date

The agreement’s expiry date must appear prominently on the first page. There is no set time or

standard term for a representation agreement: it can be in place for a day, a few weeks, or months.

Consider how long you want the agreement to remain in place, and make sure you know when your

agreement will expire. Keep in mind that a holdover clause could mean you owe money even after

the expiry of the agreement.

Holdover clause

Most representation agreements include what is often called a holdover clause. The clause may

require you to pay the brokerage fees for a purchase or sale even when the transaction happens

after your representation agreement expires. The clause will specify the time the holdover clause

is in effect from the date the agreement expires.

A holdover clause is designed to protect the brokerage, and there is no minimum or set time for a

holdover period. If your agreement includes a holdover clause, make sure you agree to the length

of the holdover period before you sign it.

For example, let’s say you are a seller, and your agreement includes a 30-day holdover clause.

This means that even if your agreement has expired, under certain conditions, you might be obligated

to pay the brokerage commission if you sell your home during the 30-day holdover period.

Similarly, assume you enter into a buyer agreement that includes a 30-day holdover clause and

the agent shows you a home before the expiry of the contract. If you buy the home after the

expiry of the agreement, but during the holdover period, you might be obligated to pay the

brokerage commission.9

Understanding multiple representation | RECO INFORMATION GUIDE

Understanding

multiple representation

Multiple representation means a designated representative or brokerage represents more than one

client, with competing interests, in the same transaction. This can happen in different ways, depending

on the type of representation agreement you and the other clients have with the brokerage:

Brokerage representation:

Multiple representation exists when the

brokerage represents both the buyer and

seller in the same transaction, or two or more

competing buyers interested in the same

property — even when the clients are working

with different real estate agents.

Designated representation:

Multiple representation exists when the same

real estate agent is the designated representative

for both the buyer and the seller in the same

transaction, or for two or more competing buyers

interested in the same property.

Multiple representation is not permitted unless each of the clients involved agrees. You should seek

independent professional advice (for example, from your real estate lawyer) before proceeding.

The brokerage or your designated representative has a duty to promote and protect your best

interests and avoid conflicts of interest. If your brokerage or designated representative enters

into an agreement with another client who has an interest in the same property as you, this places

both clients in multiple representation. Multiple representation introduces risks you and the other

client should consider.

It’s important to understand the risks. If you agree to multiple representation, the brokerage

or designated representative:

• Must treat each of the clients involved in an objective and impartial manner;

• Cannot maintain undivided loyalty to you or promote and protect your interests over the

interests of the other client; and,

• Cannot offer advice to you about such things as the price you should offer or accept or terms

that should be included in an agreement of purchase and sale.

What to expect before you agree to multiple representation

The brokerage is required to provide you with a written disclosure that explains:

• how the brokerage’s duties or the designated representative’s duties to you will change;

• the differences in the services you will receive; and,

• any change to how much you pay the brokerage.

Until this information is disclosed in writing to all clients in the transaction, and they all agree in

writing, the brokerage or designated representative cannot take any further steps on behalf

of any of the clients.10

Confidential information you provided to the brokerage or the designated representative when

you were represented cannot be shared without your written consent.

You can refuse multiple representation

If you don’t agree, the brokerage or your designated representative is not allowed to proceed.

Ask the brokerage or real estate agent about alternatives to multiple representation. For example,

if you are a buyer, the brokerage could refer you to another brokerage or another designated

representative to help you make an offer on the property.

Agreeing to multiple representation significantly reduces what the brokerage and its agents can

do for you, which could have consequences and costs.

You may have seen articles in the media about open bidding, or an open offer process.

Buyers in Ontario who have made an offer on a property are entitled to know the number of

competing offers. Sellers choose how much other information, if any, they want to share about

the offers they receive.

A note about content of other offers

If you are a seller:

• You decide how much information you

want to share about the competing offers.

• Your agent will advise you based on the

characteristics of your property, market

conditions, the content of the offers you

receive and other things.

• You need to provide clear written direction

to your agent before the content of any

offers can be shared. Personal or identifying

information contained in offers cannot

be shared.

If you are a buyer:

• You decide whether you want to participate

in a process where the content of your offer

might be shared with other buyers.

• Your agent can tell you the steps to take

to avoid having the content of your offer

shared with other buyers.

• Be aware that the seller can make the

decision to share the content of offers at

any time. You may not know in advance.

Understanding multiple representation/About content of other offers |

RECO INFORMATION GUIDE11

How to make a complaint | RECO INFORMATION GUIDE

How to make a complaint

Brokerage firms and real estate agents working in Ontario must be registered with RECO.

Ontario brokerages and real estate agents are accountable for their conduct. If you have a concern:

First, contact your brokerage

In many cases, your brokerage will be able to mediate or resolve your complaint about a real estate

agent or the services provided under your representation agreement. Search for the brokerage in

RECO’s Public Register to find the name of the broker of record (the person responsible for ensuring

the brokerage complies with the law) and their contact information. Note that the brokerage cannot

ask you to sign an agreement that requires you to withdraw a complaint to RECO or prevents you

from making one.

Contact RECO

To file a complaint with RECO about a brokerage or real estate agent, visit the complaints section

of the RECO website. The website explains the complaints process, possible outcomes, and how

to file your complaint. RECO will review the issue, determine if it has the authority to deal with it,

and what next steps, if any, it will take.

Real Estate Council of Ontario

3300 Bloor Street West

Suite 1400, West Tower

Toronto, ON Canada M8X 2X2

Phone: 416-207-4800

Toll Free: 1-800-245-6910

Consumer inquiries: information@reco.on.ca

www.reco.on.ca

Where to get more information

For more information about buying and selling property in Ontario: RECO’s website.

For the legislation that governs brokerages and real estate agents trading in real estate

in Ontario: Trust in Real Estate Services Act, 2002.12