What Is Multiple Representation?
Multiple Representation occurs when the same Brokerage (correctly called the “Agent”) represents both the seller and the buyer in a transaction. It is more common than most people would realise. There is a negative connotation associated with Multiple Representation but this is not necessarily the case. We hope this explanation clarifies an often misunderstood practice in Toronto Real Estate.
What Are Other Names For Multiple Representation?
Multiple Representation is also called Dual Agency, terms like Double Ending can be used and are often heard.
Why Does Multiple Representation Occur?
Now we know what Multiple Representation (MR) is, why does it occur? First we need to understand what a Brokerage is and the differences between a Real Estate Agent, a Broker and a Realtor. The Brokerage or company is the “Agent”. In Toronto and the rest of Canada the correct naming has lost its definition with the general public calling Realtor “agents”. Listings belong to the Brokerage. Because of the cult of personality now associated with Real Estate many buyers and sellers just assume that the Realtor or Sales Representative is the agent. This is incorrect. Dual Agency only exists within the context of Client Relationships. A Customer Relationship does not fall under Dual Agency.
OK. A Brokerage typically has an office in a particular area. Let’s use our Brokerage RE/MAX Hallmark as an example. Our office is in Riverside/Leslieville. We also have other offices spread over the city in the Beach, Greektown, Bayview, College St and other places. RE/MAX Hallmark dominates all sales in Leslieville. Sales Representatives who work for RE/MAX Hallmark dominate all transactions in this area. Therefore the likelihood of a seller using our brokerage to sell a house in Leslieville is very high. Because there are several dozen sales representatives from our Brokerage working with buyers at any one time the possibility that our company represents both the seller and the buyer is also quite high. This is the most common form of MR.
Is Multiple Representation A Bad Thing?
No, it’s not necessarily bad. Despite the fact that sales representatives work for the same Brokerage they are, in fact, in competition with each other. Be aware of listing sales reps who say they can get you a deal if you work with them. This is not good business practice. Unfortunately they’re out there and you really should avoid them.
Can I Ask For A Different Sales Rep To Act In My Interests?
Absolutely and we recommend it. At Pat Simmonds Real Estate Services we eschew MR by one representative. We can recommend someone from our brokerage who will act solely in your best interests. It is important to have independent coverage when purchasing or selling real estate.
Should I Use The Listing Agent To Buy A House?
We suggest no, you shouldn’t. It is fraught with problems. Please read this post about the subject. Commissions for the buying agent are paid by the seller. There is no reason to have the same sales representative working both sides. They cannot POSSIBLY represent the best interests of both parties unless there are very exceptional circumstances.
How Do I Know If Multiple Representation Is In Place?
Your agent is bound by law to explain it to you and to tell you it’s happening. You are under no obligation to accept it. We explain it carefully before every signing. Although another sales rep from our Brokerage may involved it is important to understand that we work separately and that we are in competition. We represent solely our clients’ best interests. It is a Fiduciary Duty that we take very seriously.
UPDATE
As a result of the investigation by the CBC our company REMAX Hallmark has instigated a company wide policy forbidding sales reps and brokers to engage in multiple representation when there is a multiple offer or bidding war situation. This reinforces the high standards that we as Realtors aspire to every day on behalf of our clients and the industry in general.