The Faithful Servant

Man Signing Contract

When you enter into a listing agreement or buyer representation agreement with a real estate registrant you become a CLIENT of the brokerage that that registrant is licenced with. That means that every registrant within that brokerage, including the owner, the broker of record, all brokers and sales representatives are held by LAW to owe specific duties to ALL clients. Your agent is a Fiduciary. The true meaning of Fiduciary is “faithful servant”.

What are Fiduciary Duties?

(For the purposes of this article,

  • The Terms registrant, agent, broker, sales rep, real estate professional, are all interchangeable
  • Registrant shall mean all registrants of a brokerage
  • Obligated shall mean within the bounds of the real estate transaction)

Fiduciary duties are generally broken down as follows:


This is the most important duty a real estate registrant owes to a client. A registrant is obligated, to act at all times, solely in the best interests of the client, excluding all other interests, including those of the registrant. A registrant must be aware of all situations that could cause a conflict of interest, such as buying their clients property, or selling their property to a client.

An example of breach of loyalty is when a registrant buys a property listed with his/her firm, and immediately resells it at a profit. Such conduct is usually considered appropriate and lawful by persons who act at “arms length”, but a registrant would be considered to have stolen an opportunity for profit that rightfully belongs to the client.


A registrant is obligated to obey a client’s lawful and reasonable instructions, even if the registrant doesn’t agree with them. The key word here is “lawful”, the duty does not include an obligation to obey unlawful instructions, such as instructions to not market a property to minorities or to misrepresent the condition of a property or to misrepresent a buyer’s potential to buy. However, if a seller tells a registrant to list a house at a given price, the registrant must obey the sellers wishes (if the registrant choses to work for that seller).


A registrant is obligated to use reasonable care and diligence when pursuing the client’s affairs. The standard of care expected of a buyer’s or seller’s real estate broker is that of a competent real estate professional. By reason of his/her license, a broker is considered to have skill and expertise in “real estate matters” superior to that of the average person, and they must use that skill and knowledge in pursuit of a client’s affairs.

However, no registrant is expected to perform tasks or know information outside the scope of his/her real estate license. Real estate licensees are not expected to perform services normally provided by engineers, home inspectors, lawyers, accountants, or other professionals. If concerns arise outside the scope of a registrant’s responsibility, the registrant must acknowledge that and suggest that the client seek assistance from a reliable outside source.


A registrant must disclose to his/her client any information relevant to the transaction in which the registrant has been engaged to assist. This includes any facts affecting the value or desirability of the property and all known relevant and material information. For instance, if a registrant notices a crumbling chimney on a house he/she is showing and fails to mention it, he/she would be in violation of his/her fiduciary duty to his/her buyer client. On the other hand, a registrant is not expected to know of problems that can not be seen or that should be uncovered by another professional.

A registrant’s duty of disclosure to his/her client must not be confused with a registrant’s duty to disclose any know material facts about the property value to non-clients (customers, general public, etc). The duty to disclose known material facts is based on a real estate registrant’s duty to treat all persons honestly. The duty of honesty does not depend on the existence of a client relationship.

A registrant must also disclose to all clients, at the earliest practicable opportunity, and in writing, any actual or potential conflicts of interest.


A registrant must not use information acquired for any purpose that is likely to cause the client harm or to interfere with the client’s business, now or in the future. In other words, a real estate registrant must keep confidential any information that may weaken a client’s bargaining position. For example, a registrant representing a seller can not disclose to a buyer what the seller is willing to accept. Conversely, a registrant who is representing a buyer is prohibited from disclosing to a seller how much that buyer is willing to pay.

The duty of confidentiality should not be confused with a real estate registrant’s responsibility to disclose known material facts about a property to potential buyers. The obligation to disclose such facts, including defects, is based on the registrant’s duty to treat all persons fairly and honestly.


A registrant must account for and safeguard money, documents and property entrusted to their care. For example, registrants must ensure that a listed house is secure; that they know and keep track of the comings and goings; that they keep control of keys; and that a licensed registrant attends all showings. A registrant must ensure the deposit is safeguarded by the brokerage or lawyer until closing.


For further information on this topic you can go to:

or Google “Fiduciary Duties Real Estate”

Kathy Dimaline is a Real Estate Broker for RE/MAX Grey Bruce Realty Inc.  The comments on this Blog are the opinions, only, of Kathy Dimaline and do not constitute any legal advice or legal opinion and does not represent the interests or opinions of RE/MAX Grey Bruce Realty Inc., brokerage.


Demystifying the Buyer Representation Agreement–Commission Clause


Buyers, when you make the decision to hire a Real Estate professional to work for you to help locate your new home, cottage or property, you likely will be asked to enter into a Buyer Representation Agreement.

In most real estate transactions, in its simplest form, it is the seller that pays the Brokerage the commission.  However, there is a provision for commission in a Buyer Representation Agreement as well…and you should know about it.

ReadingMost Buyer’s don’t even read this clause, yet you could end up paying commission, so, it is important to read and understand the implications.

As a Buyer, you are agreeing that the Brokerage is entitled to be paid a commission of a certain percentage of the sale (usually paid by the seller).  However, the commission clause further states that you, the Buyer, will pay any deficiency between what the seller pays and what the Brokerage receives.

What this means is:  If an agent enters a percentage say of 6% in this clause, and upon the sale to you of the property of your choice the Brokerage is only paid 3% commission from the seller…you could be on the hook to pay the deficiency, in this case 3% (ie of $300,000 that could be $9,000).

Another example is, if you enter into a Buyer Representation agreement with an agent with Brokerage A at 6%, and during the term of that agreement you purchase a property through another agent with Brokerage B, or you purchase a property privately, you could be obligated to pay the full 6% to Brokerage A (ie of $300,000, that could be $18,000).

You need to be diligent with your agent so that you fully understand your obligations.  Ask questions!  Many listings offer different commissions…make sure that you know what kind of commission the brokerage is entitled to on the property that you have chosen and what your commission obligation is (if any) before you sign an offer to purchase.  You may find it in your best interest to renegotiate this Buyer Representation before you sign the offer.

Unless you make very specific commission arrangements (ie on a private sale) with your agent, my solution is:  Have your agent stroke through the commission portion of this clause and include a statement that the Brokerage will be “paid by the seller or the listing brokerage as per the listing agreement”.  This way you will have a comfort level that you will not be paying any commission.

EducateDon’t get caught paying commission without knowing about it…you need to read, understand and negotiate this clause with your agent.  Don’t let it scare you—just be an educated buyer!

I’ll review other clauses of this agreement and other points of this particular clause in future Blogs.

Here’s the clause in its entirety:


Read before you leap!

Watch for my next Blog on….

Renting your Vacation Property

Don’t forget to send your comments, stories, or ideas, in the comment section below or via email at

. .

. Kathy Dimaline is a Real Estate Broker for RE/MAX Grey Bruce Realty Inc.  The comments on this Blog are the opinions, only, of Kathy Dimaline and do not constitute any legal advice or legal opinion and does not represent the interests or opinions of RE/MAX Grey Bruce Realty Inc., brokerage.

© Copyright Kathy Dimaline, All Rights Reserved

Buyer Representation–To Sign or Not to Sign, that is the question

Signing3This is just a general discussion on the Buyer Representation Agreement…I’ll delve into the specifics in future Blogs.

Buyers, you just spent 3-5 hours driving to your scheduled appointment with a real estate agent who has the listing on the property you want to see.  When you arrive, the agent says “sign this or I won’t show you any properties”.  How do you feel?

Sellers, your agent has just refused to show your listing.  How do you feel?  Frankly, chances are you will never know this transpired.

So Buyers, what do you do?  Turn around and go home?  Nope, likely you will sign that paper and likely without fully reading or understanding it.

ShotgunWeddingYou’ve just had a “Shotgun” wedding and you don’t even know your bride (or groom)!  You’ve just entered into a legal and binding contract for a determined set of time with someone you don’t know and you are starting off your search for one of the most important purchases of your life in an enforced relationship!  How do you think the rest of your decisions are going to go with your new “bride” (or groom)?

There is no requirement, no law or rule that says you must sign a Buyer Representation Agreement before an agent shows you a property.  The purpose of the Buyer Representation Agreement is for you to hire an agent to work on your behalf to help procure an acceptable offer on a property of your choice.   Would you hire someone to work for you at your workplace without an interview, or a series of interviews, or without seeing their resume?  Would you buy a pair of pants without trying them on?  No?  So, why “get married” to someone you don’t know and may not like? 

The difference between signing the agreement or not is that without a contractual agreement the agent can not give you advice.  When you are just beginning your search you are gathering information–are you really at the stage where you need advice?

If you are looking at property with an agent without a signed Buyer Representation Agreement they must answer all of your questions to the best of their ability.  Would this be adequate for your initial search?  Would this give you an opportunity to get to know the agent?  Would this help you determine his/her skill level, give you some insight into his/her personality, and allow you to make an educated decision regarding whether or not you want to continue to work with this person?

So, before you “get married” or sign that document determine what stage you are at in your relationship.  Do you have enough information on this agent to make that kind of commitment? Are you comfortable with this person? Have you established a good and comfortable working relationship?  If not and you are still being asked to sign, “try on another pair of pants”.  Seek out a more suitable agent…there are others who will accomodate you (and on short notice if need be)!

Once you have had a chance to “try out” an agent, ask yourself these questions:  Am I ready to buy and need advice?  Does this person listen to my needs and wants?  Does this person understand what I am looking for?  Is this person answering my questions in a skilful and knowledgeable manner?  Will this person look after my best interests and not pressure me into making an ill advised decision?  Is this person genuine?  Is this person successful?

If the answer is yes, then sign…and live happily ever after!  You will have a much more comfortable mutually respectful relationship and you will ultimately have a happy purchasing experience.  After all, this is a major purchase in your life…you want to enter into it wisely.

Respect and loyalty are earned…they’re not gained through pressure tactics or contractual obligations.

ALWAYS READ AND UNDERSTAND WHAT YOU ARE SIGNING.  If in doubt…ask for clarification and/or seek legal advise.

Watch for my next Blog on….

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Don’t forget to send your comments, stories, or ideas, in the comment section below or via email at


Kathy Dimaline is a Real Estate Broker for RE/MAX Grey Bruce Realty Inc.  T
he comments on this Blog are the opinions, only, of Kathy Dimaline and do not constitute any legal advice or legal opinion and does not represent the interests or opinions of RE/MAX Grey Bruce Realty Inc., brokerage.

© Copyright Kathy Dimaline, All Rights Reserved