Have you been told about "Agency Disclosure"?

The following is a "word for word " copy of the Calgary Real Estate Board, Agency Disclosure Acknowledgement brochure.

AGENCY DISCLOSURE

Members of the Canadian Real Estate Association are required to abide by a strict code of ethics and standards of business practice, which serves to protect the buying and selling public alike.

One of the ethical obligations embodied in the Code requires the REALTORS disclose who they are representing in a real estate transaction:

ARTICLE 3

"A realtor shall fully disclose in writing to, and is advised to seek written acknowledgement of disclosure from, all parties to a transaction regarding the role and the nature of service the REALTOR will be providing to the client versus the customer or other party to the transaction. The REALTOR shall also disclose his or her role to the other REALTORS involved in the transaction".

If you have any questions about the contents of this brochure contact your local Real Estate Board/ Association or talk to the REALTOR with whom you are dealing.

THE AGENCY RELATIONSHIP

REALTORS work within a legal relationship called agency. The agency relationship exists between you, the principal, and your agent, the company under which the individual salesperson who is representing you, is licensed. The essence of the agency relationship is that the agent has the authority to represent the principal in the dealings with others.

Agents and their salespeople are legally obligated to protect and promote the interests of their principals as they would their own. Specifically, the agent has the following duties:

Undivided loyalty. The agent must protect the principal's negotiating position at all times, and disclose all known facts which may affect or influence the principal's decision. To obey all lawful instructions of the principal. An obligation to keep the confidences of the principal. The exercise of reasonable care and skill in performing all assigned duties. The duty to account for all money and property placed in the agent's hands while acting for the principal.

You can expect competent service from your agent, knowing that the company is bound by ethics and the law to be honest and thorough in representing a property listed for sale. Both buyer and seller can be represented by their own agents in a single transaction.

SINGLE AGENCY

In Alberta, the approach to the agency relationship is one that reflects the understanding and expectations of the consumer as well as the Canadian courts.

It is generally understood that the consumer, as a buyer or seller, considers their REALTOR as their representative and relies on that representative for guidance, information and advice in the home buying or selling process.

It is this reliance and acceptance that creates the agency relationship. As a buyer or seller you can expect loyalty, full disclosure, confidentiality and reasonable care and skill.

It is this approach that is reflected in Alberta's standard Real Estate Board Listing Contract for Residential Property and Real Estate Purchase Contract. Please feel free to ask your REALTOR to show you those documents.

DUAL AGENCY

Dual agency occurs when a real estate agent is representing both the buyer and the seller in the same transaction. Since the agent has promised confidentiality, loyalty, and full disclosure to both parties simultaneously, it is necessary to limit these promises in this situation.

If you are involved in a dual agency, before making or receiving an offer both you and the other party must agree in writing to limit the obligations of the agent.

Ordinarily the Listing Agent:

• Acts only as the Seller's Agent.
• Has duties of good faith, obedience, honesty, competence, full disclosure, confidentiality and accountability to the seller, and
• Must avoid any conflict with the Seller's interests.

Notwithstanding the ordinary situation,. the Seller(s) has/have authorized the Listing Agent, through its registered sales representatives, to act as Agent for each of the Seller(s) and prospective Buyer(s).

When representing both Seller(s) and prospective buyer(s), the Listing Agent will have duties of good faith, obediance, honesty, competence, full disclosure and accountability to both the Seller(s) and a prospective buyer(s).

When representing both the Seller(s) and a prospective Buyer(s), the Listing Agent will have no duty of confidentiality to either the Seller(s) or the prospective Buyer(s) and therefore the Listing Agent will disclose to both the Seller(s) and the prospective Buyer(s) all facts known to the Listing Agent which materially affect or may materially affect the marketablity or value of the property. However, the Listing Agent will not not, without the prior written permission of the applicable person, disclose to the other person to the negotiations firstly, that the Seller(s) will accept a price less than the asking price (or a countered selling price) and, secondly, that a prospective Buyer(s) will pay a price higher than the price offered and, thirdly, the reason the seller(s) are selling and the prospective buyer(s) buying. These duties will apply between Buyers when an Agent represents two or more prospective Buyer(s) and at all times will keep confidential the terms and conditions of competing offers.

The words "when representing both the Seller and a prospective Buyer" include situations where the Seller and a prospective Buyer are represented by sales representatives who carry on business from any branch offices of the Listing Agent.

YOUR RESPONSIBILITIES AS A BUYER OR SELLER

• Carefully read all documents and understand what you are signing.
• If you need special or expert advice, seek other professionals such as lawyers, notaries, accountants, home inspectors, contractors, engineers and surveyors.

DEFINITIONS

The Agent is the real estate company under which the individual salesperson who is representing you is registered.

The term REALTOR is often used interchangeably with Licensee, Real Estate Agent, Broker or Salesperson. In Alberta, a Salesperson is registered under the Real Estate Act and can use the term REALTOR if he/she belongs to a local Board and Association that enforces a strict code of ethics.

The Buyer is often referred to as the purchaser.

The Seller is often referred to as the Vendor.

The Principal is someone who has engaged an Agent to act for and on his/her behalf either to buy or sell a home.

YOUR RELATIONSHIP WITH A REALTOR

Buying or selling a home is probably the most important and potentially rewarding financial transaction you'll make in your life. So it's a good idea to take a moment and consider the kind of relationship you might be entering into with a REALTOR.