I’m in the market to purchase a townhome. I’ve been asked by real estate brokerages if I’m looking to sign with them as a client or as a customer. What’s the difference?

In our daily lives, we tend to use the terms “client” and “customer” interchangeably. But in real estate transactions, there’s a big difference between the services you will receive, depending on which kind of contract you sign. Considering your confidence level, knowledge of real estate and comfort in making decisions without counsel from an expert in the field, you may choose to contract with the brokerage as a customer. If you are new to buying and selling properties, or simply want some expert guidance and advice, I recommend choosing the client option.

The key distinction is that, as a client, the brokerage owes you a fiduciary duty. This means the brokerage must follow your lawful instructions, promote and protect your best interests during a real estate transaction, and refrain from sharing any information you don’t want disclosed, especially to the seller. Signing on as a client will also afford you access to additional services from your salesperson or broker. These services may include helping to prepare and negotiate an offer that includes the best possible terms on your behalf, referring you to other professionals, such as, mortgage lenders and home inspectors, and helping you to perform due diligence on a property.

As a customer, the brokerage does not owe you a fiduciary duty. Its representatives must be fair and honest in dealing with you, but they do not have an obligation to promote or protect your best interests in the same manner. For instance, 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, and without their advice.

If you’re relatively experienced in buying and selling properties, and go with the customer option, you should be aware that it’s possible your salesperson or broker may show you a property that is owned by someone they represent as a client.

If you were to make an offer in this scenario, 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 selling client. In other words, your salesperson will help you, their customer, with the purchase. But they have a fiduciary duty to their client, the seller.

Regardless of the route you choose, it is always advisable that you hire a real estate lawyer to help you navigate and close the transaction, and to deal with any legal issues that may arise.

One last word of advice is to think carefully about your needs, discuss your options with your salesperson and make sure you read and understand documents you receive from a brokerage before you sign on the dotted line.

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

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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