For Sale By Owner & Brokerage/Designated Agent Relationships
The Commission regularly deals with questions from licensees and consumers regarding different relationships a brokerage can offer when dealing with For Sale By Owner’s (FSBO) sellers. There are a range of services that a brokerage/designated agent can provide to a customer or to a client. Sometimes a consumer will seek customer services from one brokerage and agency representation from another.
Brokerage Agreements are with the brokerage; however, the agency model can be with either the brokerage/designated agent depending on what type of agency they practice. Mere Posting Service Agreement and Seller Customer Acknowledgment and Fee Agreement are always with the brokerage.
For example, a mere posting is considered a trade in real estate and requires the seller to sign a Mere Posting Service Agreement with a licensed brokerage to facilitate. The seller is selling their property themselves, but uses a brokerage to input the property information on the MLS® System. This information then appears on realtor.ca. A Mere Posting Service Agreement is a minimum level of service a brokerage may offer to a seller. The brokerage that is facilitating the mere posting treats the seller as a customer. This is the only service the brokerage provides, and the seller is responsible for everything else, including signage, advertising, viewings, and facilitating the sale.
A brokerage’s responsibilities when facilitating a Mere Posting Service Agreement:
- Accuracy of the data
- Reporting of transaction data on the MLS® System
- Maintaining data, images and Seller’s contact information on the Brokerage’s website
- Exercise reasonable care and skill
- Comply with the Act, By-law and Commission Policies
If another brokerage/designated agent has a buyer client that wants to offer on a mere posting listing, they do not contact the brokerage that rendered the mere posting service, they contact the seller directly. Again, the brokerage that inputted the listing is facilitating the mere posting and is not facilitating the sale on behalf of the seller.
In this case, the buyer’s brokerage/designated agent contacts the seller directly and treats the seller as a customer, having them sign a Working with the Real Estate Industry form and a Seller Customer Acknowledgment and Fee Agreement.
Taken further, another example of a service a brokerage/designated agent may provide is when a seller has a Mere Posting Service Agreement with one brokerage (therefore a customer of that brokerage), but the seller wants to receive agency representation with a different brokerage/designated agent at the time a buyer is offering on their property. So, what you have is a mere posting service provided to the seller by Brokerage/Designated Agent 1, the buyer represented in an agency relationship by Brokerage/Designated Agent 2 and again the same seller in a different agency relationship with Brokerage/Designated Agent 3.
A seller who wants agency representation with Brokerage/Designated Agent 3 for the facilitation of the Agreement of Purchase and Sale only, can do so by entering into a representation agreement with them. The representation agreement must outline their respective duties etc. The signing of the representation agreement is done after the seller has signed a Working with the Real Estate Industry form with Brokerage/Designated Agent 3. Brokerage/Designated Agent 3 would not list the property, but would be the seller’s representative when facilitating the sale only.
If your brokerage has been approached by a seller who wants representation for the facilitation of an Agreement of Purchase and Sale, the representation agreement you sign with the seller may look very different than a traditional Seller Brokerage Agreement. The seller’s representation brokerage will provide the seller with all fiduciary duties; however, they may not provide other services such as paying a buyer’s brokerage’s remuneration, hold trust funds, etc. The seller’s brokerage would not be listing the property, but representing the seller when facilitating an Agreement or Purchase and Sale. It is possible for a buyer’s brokerage to receive remuneration from the seller’s brokerage, but if the seller representation agreement does not contain a provision for that, the buyer’s brokerage would need to seek remuneration from the buyer, per the Buyer Brokerages Agreement, or alternatively seek payment from the seller directly via a Seller Customer Acknowledgment and Fee Agreement.
If the seller has signed a Mere Posting Service Agreement with one brokerage and is represented by a different brokerage/designated agent for the facilitation of the sale and the seller is paying the buyer’s brokerage remuneration, in these cases there is no need for the buyer’s brokerage/designated agent to obtain a Working with the Real Estate Industry form.