As a buyer who's new to the real estate market, you probably often wish there was a book that explained all the different terms that you might run into while you're trying to find and buy your downtown Toronto real estate. We can help you by explaining a common occurrence in the real estate world which has tripped up many inexperienced buyers over the years - dual agency. This is something you should know before you start looking for a home.
In order to understand what dual agency means, first you need to understand how real estate agencies are structured and licensed. In order for agents to be able to help people with their houses for sale in Vaughan, they need to be licensed under a real estate broker, who is kind of like a manager. The agent may or may not work directly for this broker, but he or she is responsible for handing over a portion of his or her commission to this broker.
When two Scarborough real estate agents who are licensed by the same broker end up on different sides of a real estate deal (i.e. one representing the buyer and the other representing the seller) this is called dual agency. When a dual agency situation occurs, even by accident (you just happen to pick a home being sold by the other agent), your agent must by law tell you about the conflict of interest so you can decide whether or not to proceed.
Going ahead with a home sale where the London, Ontario real estate agents are in a dual agency situation is tricky. Sometimes it doesn't matter that much, such as if they don't work for the same company or don't even know each other. Other times, they may be colluding with each other to drive up the price of the property and pocket the increased commission rate, which they share whether they're in league with each other or not. Use your instincts.
The type of dual agency situation you should be most wary of (in fact, we recommend never going ahead with this type of deal) is one in which the two Prince Edward Island real estate agents representing the buyer and seller are the same person - i.e. the agent is representing both sides of the deal. It is not possible to negotiate with yourself, so you can be sure you won't get a good deal in a situation where the agent is caught between two parties with opposing interests.