Brian Madigan, L.L.B has shared more information on the Buyer Representation Agreement (BRA).
"You may recall that many agents enter into a sub-agency co-operation agreement with the listing agent. This means that they share in the commission payable should they sell the property. It also means that they, in addition to the listing agent, act for the vendor.
This doesn't seem fair to have 2 agents both representing the seller while the buyer is on his own.
The Dode of Ethics under the Real Estate and Business Brokers Act, 2002 was changed and the expectation now is that the buyer's agent will owe their duties and obligations to the buyer, even though they may receive their compensation from the seller. This is a substantial and important change.
Wouldn't you be surprised to find out that your lawyer, the one you picked for your personal injury lawsuit was actually acting for the insurance company that you were suing? Not only that, your lawyer owed fiduciary duties to the insurnace company as a client, but only had to treat you with ordinary car, in fact, the same duties owed to a stranger.
Until the 1990's, that was the way it was, int he real estate business.
The presumption has been reversed, it is now presumed that the buyer's agent will be acting for the buyer. There are, however two classes of buyers: the good buyers and the not-so good buyers and there is a legal relationship for each of them:
1) the client relationship, and 2) the customer relationship
If you are a Client, the youre real estate aggent owes you certain fiduciary duties including disclosure, competence, obedience, accounting, confidentiality and loyalty.
If you a Customer, then you are owed honesty, fairness and due care. But, these are the same duties owed to just about anybody. So, you are really not much better off, than if you were simply a stranger.
If you have a choice you definitely want to be a Client. This relationship will commonly be evidenced by a Buyer Representation Agreetment (BRA).
It will set out in writing exactly what your agent will do for you. In addition, it will, usually be exclusive, meaning that you may only deal with that particular agent. And, if you buy through a second agent, you as the buyer still have to pay a commission to the first agent.
So, you will have to enter into this type of arrangement very carefully. Make sure you have the right person. Limit the time period and the boundaries. Remember to specify the type of property, and the method of acquisition."
Make sure that you note the time period and anything more than 6 months MUST be initialled. Read the document, including the fine print and make sure you understand what you are signing.
Thank you Brian for adding a good insight of this document.