The Toronto Real Estate market continues to increase in complexity. It’s no surprise that buyers and sellers are trying to streamline the process. As such, there are an increasing number of clients taking charge of their home search. Armed with tools like Zillow, Realtor.ca, and trreb.ca, these ambitious seekers proceed solo. Targeting properties, they choose reach out to the Listing Agent.
There are many reasons they may wish to do this. For example, they may not want the added pressure of working with a “Buyers Agent”. The fear is this agent may sway the buyers to listings where the agent has an incentive. This scenario of the Buyer and Seller working with the same agent is known as Multiple Representation.
 

What is Multiple Representation?

Multiple Representation is when one agent acts for two or more parties to the same transaction. However, to better understand Multiple Representation, we must first understand the relationship between the representative and their client.
 

The Agency Relationship

Two Components comprise the Agency Relationship: The agent and the principal. In an agency relationship, the principal agrees to allow the agent to act on their behalf, promoting and protecting the principal’s best interest. In return, the principal agrees to hold the agent harmless (or indemifiable) for actions carried out on their behalf. The principal also agrees to remunerate them for the services performed.
 
What’s important to note is that, in Ontario Real Estate, the Agency relationship exists between the client and the Brokerage. This important distinction will assist in understanding exactly how Multiple Representation can occur.
 

The Two Scenarios of Multiple Representation

The above noted difference in Agency Relationship in Ontario is important, as it outlines a very unique distinction. If the relationship created is between the Client and the Brokerage, then Multiple Representation can occur if a Buyer and Seller use the same brokerage, even if they are using different salespersons within that brokerage.
 
However, there is a second, more subtle version that also exists. Recall that Multiple Representation does not specifically require the two parties to the transaction be one Buyer and Seller. This gives rise to the case of multiple representation where two buyers, represented by two different agents at the same brokerage, compete for the same property. This version of Multiple Representation, although more subtle, is important to watch for. Ensuring that your agent is keeping your best interests at heart is vital to your success in Real Estate.
Multiple Representation in Ontario
 

How Do I Know if I’m Involved in Multiple Representation?

In Ontario, registrants are expected to discuss the possibility at the earliest possible time in which they think Multiple Representation could occur. If you suspect that you may be involved in this scenario, its a good idea to speak with your Representative about how it may affect you in your transaction.
 
Multiple Representation is often frowned upon in the Real Estate Community. In fact, the Ontario Government has considered banning the possibility of multiple representation altogether. It’s important to have an agent representing your best interest, and many think that one individual or brokerage could not possibly do so in a completely unbiased matter. However, if navigated properly, Multiple Representation can be a convenient way to negotiate a Simple Real Estate Transaction.
 
Do you have a question about Multiple Representation? ReaLawState’s expert team of Lawyers and REALTORS(r) can assist you with all your Multiple Representation Needs. Contact Us today.