I’d like to buy a condo, and a real estate brokerage has offered me the choice of signing with them either as a client or as a customer. Which one should I choose?

Consumers sometimes use the terms “client” and “customer” interchangeably, but there’s a big difference between the two, and I’m glad you’re asking questions. If you’re relatively inexperienced in buying and selling properties and you want some expert guidance and advice, I strongly recommend signing on as a client, and not as a customer.

Whether you sign a Buyer Representation Agreement (which makes you a client) or a Customer Service Agreement, your salesperson and other employees of the brokerage are required to treat you with fairness, honesty and integrity, and provide you with conscientious service.

The key distinction between the two options is that as a client, the brokerage owes you a fiduciary duty. That means the brokerage must follow your lawful instructions, promote and protect your best interests as a buyer during a real estate transaction, and refrain from sharing any information you don’t want them to disclose. Your salesperson or broker can help you prepare and negotiate an offer to seek the most advantageous terms on your behalf, refer you to other professionals, including home inspectors, and assist you in performing due diligence on a property. For example, that could mean getting your real estate lawyer to look into whether or not there are any issues with a particular property as part of their services.

As a customer, the brokerage doesn’t owe you a fiduciary duty. Your salesperson may assist you with filling out the paperwork for your offer, but you will have to come up with your own negotiation strategy to purchase the property, for instance. They have to be fair and honest, but they do not have an obligation to promote or protect your best interest.

If you’re relatively experienced in buying and selling properties you might be comfortable with accepting the customer option. However, you should be aware that it’s entirely possible the salesperson or broker who signed you as a customer may wish to show you a property that is owned by somebody they already have signed as a client.

Let’s say you’re interested in that property, and you want to make an offer. As a customer, you should expect that any information you share with your salesperson, such as the upper limits of your price range or your reasons for buying, will be shared with their seller client. In other words, your salesperson will help you, their customer, facilitate the purchase, but will be acting in the best interests of their client, the seller.

Make sure you read and understand any documents you receive from the brokerage. Think carefully about your needs, and discuss your options with your salesperson before you sign.

If you have a question for Joe about the home buying or selling process, please email information@reco.on.ca.


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Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.

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