By Ross Wilson

In this sixth in the series about our industry’s fee for service, let’s look at this controversial topic from a buyer agent’s perspective. Though not nearly as significant a concern for buyer clients, we should, in our evolving marketplace, still be reasonably competitive for them too.

Let’s start with some questions. When do you ask your buyers to sign a Buyer Representation Agreement (BRA)? When you meet for the first time? After you’ve shown a few homes, or immediately prior to signing an offer? Do you ask for a short-term commitment such as 24 hours and include only the specific properties you intend to show? Or a longer-term general contract? Do you delegate this task to a junior agent on your team? Or do you even ask for a commitment – in writing or otherwise? Maybe you rely on an implied, trusting verbal arrangement. Or, as I’ve heard stories, maybe before you even agree to step out the door to show any property, you flatly refuse to invest any time unless they commit to signing with your brokerage. The practice of buyer agency has certainly been contentious since its inception and largely inconsistent.



My normal practice was to ask for a commitment once my buyers and I had become mutually comfortable. Unless they were friends or former clients, prior to formalizing our relationship with an agreement, I needed assurance they were serious, sensible and most importantly, financially qualified.

Another critical factor was my personal determination of whether I could work with them. Would we be compatible? Usually, though, I got a signature on a BRA and an offer contemporaneously. However, to protect yourself and comply with legislated requirements, you’re supposed to obtain a written commitment as early as is practically possible in the process. Inherently, current practice involves a lot of discretion.

When drafting a BRA and inserting your commission rate, you must once again decide your worth (see my last column). To preclude my buyers from having to pay additional fees, I usually set my rate to coincide with what was typically offered to co-operating brokerages. However, if they chose to offer on the rare listing that advertised a lower rate, I obviously advised them of the additional fee they’d have to pay if their bid was successful. But without a previously signed BRA, this option would be unavailable to you. Unless the seller agrees to pay your normal rate, you’d be forced to accept the lower fee.

Many agents avoid the potentially lucrative scenario of dual agency. Why? Well, I’ve been told they’re afraid of erring and placing themselves in legal or financial jeopardy. Or they say there’s no point in taking the risk because they’d be forced to cut their fee anyway. Accordingly, they steer clear of navigating these potentially hazardous waters.

This is obviously a personal choice, but consider the proverbial man against the sea. If you’re familiar with fundamental seamanship and are well-trained and equipped to handle a ship’s operation, then the odds are greater that you’ll arrive unscathed at your destination. Dual agency is no different. If you understand the process and carefully follow procedure, you’ll most likely satisfy both clients’ needs. It’s just a matter of mediating a duel, thinking and carefully choosing your words, maintaining appropriate confidentiality and caring equally for each party.

However, when a brokerage represents two competing buyers for the same property, the possibility of a conflict increases. Challenges can be further exacerbated if the subject property is listed with the same brokerage that represents the buyer. But as I said, dual agency seems more problematical than it really is. Just ensure you understand the procedure and your responsibilities.

In the next column, I’ll address the subject of commissions from the perspective of what is referred to in our industry as double-ending, which of course, involves dual agency.

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” – Mark Twain

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  • Ron Starchuk

    The Internet has made information on houses listed on MLS and other information concerning properties readily available. That being the case does a Realtor still bring a buyer the same value as in the past when this information was harder to obtain? Will there be a trend for buyers to deal with the listing Realtor directly and suggest that they forego the buyer’s portion of the commission? I am a retired Real Estate Lawyer and would be interested in your views.

    • Dave says

      I know that in Ontario it is possible today but the Ont Gov’t is about to change the law re double ending and that will be an unintended consequence. It is never a good idea when politicians get involved as their good intentions usually screw everyone.

      • I tend to agree with you, Dave. Any such meddling is wrought with risk because politicians typically fail to truly understand our industry. With their tunnel vision, they’re bent on protecting consumers, which of course, is an admirable intent.

        But from their short term vote-winning prospective, they seem to lack the ability or desire to see the longer view. Such misguided meddling will ultimately and irrevocably destroy a viable industry model.

        Every industry – even that of governing – has its challenges. But I believe consumers will someday rue the day when they allowed their political leaders to wreck havoc on a full service business model that functioned effectively for many decades.

    • Thanks for your submission, Ron. As you say, prior to the advent of the Internet, the industry had much more control over the dissemination of listing information. Nevertheless, I suggest that the search, discovery and presentation of potential listings of interest to a buyer by Realtors still forms only a part, and a minor one at that, of the services available to buyers.

      As one might expect, as in labour and civil disputes, representation by an agent or mediator, has its advantages. Have you ever, as a buyer, been in the position of having to deal directly with a seller? This particular challenge is arguably the chief reason for the failure of most private sales (as addressed in my book, The Happy Agent, and earlier columns in REM).

      Further, dealing directly with the seller’s representative presents its own risks. Though there is specific protocol involved in such scenarios, to which party will the agent have the most allegiance? And without their own personal representation, how will the buyer confidently know that the seller’s agent actually reduced their fee to the benefit of the buyer?

      I believe in the benefits of agency. But having said this, our industry is definitely evolving … and not necessarily for the better.