I took your advice about shopping around for a real estate salesperson and I’m down to two candidates. One wants me to become a “client,” while the other used the word “customer.” Is there a difference?

Buying a home is a major decision, so I’m glad you’re interviewing potential salespeople to find a representative who best understands your needs. You have options. If you’re relatively inexperienced in the world of real estate, and you want some expert guidance and advice, I would strongly recommend you sign on as a client. The terms “client” and “customer” may seem interchangeable, but there are some important differences between the two.

If you sign a Buyer Representation Agreement, your salesperson’s brokerage will treat you as a client, which means the brokerage must promote and protect your best interests as a buyer during a real estate transaction. That’s called their fiduciary duty, and it is the foundation of agency law in Ontario.

If you choose to enter into a client relationship with a brokerage while you’re looking to buy a house, your salesperson can help you prepare and negotiate an offer seeking the most advantageous terms on your behalf (including price), provide referrals to other professionals, and help you do your due diligence on a specific property.

Signing a Customer Service Agreement, on the other hand, will reduce the salesperson’s service level. As a customer, the brokerage is required to treat you with fairness, honesty and integrity, and provide you with conscientious and competent service, but the brokerage and the salesperson don’t owe you a fiduciary duty. Customer status means that your salesperson may help you prepare the paperwork for an offer, but you could be on your own when you decide upon your offer strategy. If the seller is the salesperson’s client, the salesperson is obligated to share whatever they know with the seller. You will have to decide if sharing information would help or hinder your negotiation goals.

That’s quite a difference, isn’t it?

Let’s imagine you have a family, and you need to buy a home quickly in a small community to start a new job. It’s the dead of winter, and there aren’t many listings available. You find one that looks good, and you contact the salesperson who is selling the property. The seller is already the brokerage and salesperson’s client, and you’re asked to become a customer.

The sales rep is obligated to get the best deal possible for the client, but not for you. If you inform the salesperson that you desire a fast purchase, you should expect this information will be relayed to the seller, who could then use that knowledge to their advantage during negotiations. It’s a complicated dynamic, so you need to understand the relationship options and weigh the advantages and disadvantages carefully.

RECO is working closely with the Ontario government to clarify and tighten the rules around the types of relationships that should be permitted, and the disclosure required before consumers make that important decision. It will be particularly important in situations involving multiple representation; that’s when a brokerage represents more than one client in a transaction. The government has announced that changes are coming, and we’re expecting more details this year.

In the meantime, make sure you thoroughly read any documents you receive from your salesperson’s brokerage, and ask questions. If you are debating between client or customer status, think carefully about your needs, and discuss it with your salesperson, who can provide details of the pros and cons of each option.

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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