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In real estate today, each Realtor in a transaction is required to clearly disclose for whom they are working as agent. Common practice now is that the listing Realtor is agent for the Seller and the Realtor who writes the offer with the Buyers is working for the Buyers. Each offer to purchase declares this agency.

Regardless of the declaration, in the vast majority of sales the Seller's Realtor and the Buyer's Realtor split the commission paid by the seller. The buyer does not pay a commission to their agent.


The Seller agency is traditionally defined in the listing agreement. Here the Seller agrees to list their property for sale with an agency for a fixed period of time and in the event of a sale, pay a commission. The listing Realtor is tasked with marketing and promoting the property, submitting the listing to the MLS (Multiple Listing service), showing the property, installing the sign and many other actions discussed at the time of the listing interview. The Seller grants exclusive agency to the agent and pays a commission only upon a successful sale. This is the concept of a 'success fee' where payment is made only upon a sale. The agent absorbs all costs for materials and time and if the listing does not sell during the listing, the homeowner pays nothing. The fee is based on success only, not time or expenses, all cost risk is borne by the agent.


Buyers can now engage a Realtor to act on their behalf. This is done with the use of a Buyer's Agency Agreement. Much like the Seller's Listing agreement, the Buyer's agreement states that the Buyers agree to work solely with the Realtor and the Realtor will earn his commission through the selling commission. With this assurance the Realtor will apply himself to search out appropriate listings, show the Buyer the properties, advise them on the home's positive and negative issues, write and present and negotiate their offer to the Seller, ensure all the applications, inspections etc. are properly engaged, make sure documentation is correct, explained and understood, and assist the process right through to move-in day.

From the Buyer's point of view, this is great. It is all without cost to the Buyer, the Realtor still earns his commission through the Seller, and the Buyer gets complete one stop service.


The only exception to this is in the Limited Dual Agency circumstance. Here the Buyer is introduced to the property by the listing agent. In such case both parties agree that the listing agent is allowed to proceed in a limited capacity. The limitations simplified are that the agent cannot disclose personal details about one party to the other without permission, cannot disclose the motivations of one party to the other and the agent can only represent the price offered or counter-offered and cannot hint at any other pricing. The one exception is that the agent is required to disclose any known defects in the property to Buyer whether the Seller has authorized it or not.