Working with a real estate agent in Ontario: what to know before you sign

How Waterloo Downsizing fits in

Waterloo Downsizing introduces readers to agents on its own team at eXp Realty. It is not a search of the whole market, and other brokerages and agents may serve you equally well or differently. You are free to interview agents elsewhere, and this guide applies to any agent you consider.

What TRESA changed on 1 December 2023

RECO calls the Trust in Real Estate Services Act, 2002 (TRESA) consumer protection legislation governing the conduct of real estate agents and brokerages, and its TRESA explained page says the key changes took effect on 1 December 2023. For sellers, the changes you are most likely to notice are the written information you receive up front and the introduction of designated representation, both covered below.

The RECO Information Guide comes first

RECO's Information Guide must be given to a buyer or seller before services or assistance are provided. It explains the duties an agent owes a client, which RECO's guide lists as undivided loyalty, disclosure, confidentiality and avoiding conflicts. Read it before the first meeting, not after.

Client versus self-represented party

You are either a client of a brokerage or a self-represented party. If you are not a client, the agent must give you RECO's "Information and Disclosure to Self-represented Party" form and walk through it before helping you, and RECO recommends getting independent advice. For a seller, being a client means the agent owes you those duties. For a buyer you do not represent, you may be dealing with the seller's agent, who owes loyalty to the seller. Ask any agent, in plain words, whether they are acting for you.

Brokerage representation and designated representation

RECO's guide describes two types. Under brokerage representation, the whole brokerage represents you. Under designated representation, named agents represent you, and the brokerage and its other agents treat you impartially. RECO says designated representation was introduced in Ontario on 1 December 2023.

The difference matters if the same brokerage might also represent a buyer interested in your home. Ask which type is proposed, and where the listing agreement says so.

Multiple representation needs your consent

Multiple representation, where a brokerage represents more than one client in the same transaction, is not permitted unless each client agrees, according to RECO. If you are asked to consent, ask what the agent can and cannot tell each side, whether the agent may still negotiate on your behalf and what happens to your price advice. Have a lawyer read the consent before you sign. You can say no.

Competing offers and what a seller may share

RECO's page on competing offers says a seller's agent must disclose the number of competing offers to all buyers who submitted written offers. Sellers do not have to share the content of offers, and agents cannot unless the seller directs it. That is your choice as the seller, and it is one to talk through with your agent and, where money is large, your lawyer before an offer date. Sharing terms may bring higher bids or may reveal more than you wanted, and we do not predict which.

Deposit insurance

RECO's consumer deposit insurance is free to consumers. RECO states coverage of $200,000 per claim and $4 million per event, with no deductible, for brokerage theft, fraud, insolvency and misappropriation. It does not cover disputes between a buyer and seller about who is entitled to a deposit. Contact: 416-207-4800 or insurance@reco.on.ca.

How to look up an agent

Use the RECO registrant search. RECO's page on checking that your agent is registered says it shows the name, registration number, status, expiry, broker of record, contact details and five years of enforcement history. In Ontario agents are registered with RECO. Search the person and the brokerage named on any advertising, and note anything you want to ask about.

Questions to ask before you sign a listing agreement

• Have you given me the RECO Information Guide, and am I a client?
• Is the representation brokerage or designated, and is any multiple representation possible?
• How is your commission set, and what does the agreement say about it? Ask how the rate or amount is written and what it covers.
• What are the term and cancellation provisions of the listing agreement, and what happens if I decide not to sell?
• What will you do to market my home, and who pays for each item?
• How do you handle competing offers, and what will you recommend about sharing offer content?
• What do you know of local older-home issues, such as wiring, heritage districts and flood plains? See our seller disclosures guide.
• Who will actually handle my file, and how often will we speak?
• Do you have experience with moves like mine, such as buying and selling in the same period?

Take the listing agreement to your lawyer before you sign it. Fees and costs are covered in Costs and Taxes, and the net proceeds calculator shows what a given commission does to your result. If you are deciding on timing, see buy first or sell first.

What to bring to a first meeting

You will get more from a first conversation if you arrive with a short folder: your property tax bill, any survey or deed you can find, a list of repairs and upgrades with dates, and notes on how soon you need to move. Also write down what matters to you in the next home, such as stairs, parking or distance to family, so the agent hears your priorities rather than guessing them.

Treat the first meeting as an interview. Ask for the RECO Information Guide, ask how the agent is registered and note how clearly they explain things. An agent who is comfortable being asked these questions is easier to work with than one who hurries you towards a signature. Nothing obliges you to sign at the first meeting, and a day to read and to call your lawyer is reasonable to ask for.

Reading an agent's advertising

RECO's Bulletin 5.1 says all advertising must clearly and prominently identify the brokerage, use a descriptor such as "brokerage" with the name, show registered names rather than nicknames and avoid false or misleading claims. A flyer, sign or web page that leaves out the brokerage is worth a question. On a website, RECO's online advertising bulletin asks for clear and prominent identification of the employing brokerage, so you should be able to tell in seconds who is behind a page.

What to read in the listing agreement

A listing agreement is the contract that sets out what the brokerage will do and what you will pay. Read it slowly, at home, with the RECO Information Guide beside it. Look at the length of the term, how and when you can end it, how commission is stated, what marketing is promised and who pays for it, and whether the agreement lets the brokerage represent a buyer as well. If anything does not match what you were told in conversation, ask for it in writing before signing. Your lawyer can review the whole document, and a short review costs little compared with the sale price.

Ask what the brokerage's duties are if you receive an offer from a buyer who is also its client. That is where multiple representation and consent, described above, come into play.

If you are selling and buying in the same period

You can use one agent for both sides of your own moves, since you are the client in each case, but the two transactions pull in different directions on timing. Selling first can leave you needing somewhere to live. Buying first can leave you carrying two homes. Our guide on buying first or selling first sets out the trade-offs, and your lawyer can explain the conditions and closing dates in each contract.

Ask each agent how they would coordinate closing dates, and whether they have a view on conditions that protect you if one deal falls through. Beyond that, ask who handles the second purchase, because you may want a different agent in a different town. Waterloo, Kitchener, Cambridge and the townships are each described on the where to downsize pages.

After you choose

Keep copies of everything you sign, including the Information Guide acknowledgement and any consent forms. If you have a concern about an agent's conduct later, RECO is the regulator, and the registrant search shows the enforcement history that RECO publishes. Your lawyer can advise on contract disputes, and RECO's deposit insurance does not cover disputes over who is entitled to a deposit.

Where this fits in your plan

Choosing an agent is one step in a longer sequence. The step-by-step downsizing guide puts it in order, and the resources page lists legal help. When you are ready, you can ask to be introduced to an agent on the eXp Realty operating team.