The fiduciary duty — why it matters
A real estate agent's fiduciary duty defines what they're legally required to do for you. Fiduciary duty means the agent must put your interests first, disclose information that affects your interests, keep your confidential information confidential, and advise you in your best interest rather than in their own.
This duty only exists toward the party the agent represents. A seller's agent, also called the listing agent, owes fiduciary duty to the seller. A buyer's agent owes fiduciary duty to the buyer. If you call a listing agent about their listing, you are dealing with someone who is legally obligated to act in the seller's interests. They must tell the seller if you mention your top dollar, your urgency, or any other information that affects the negotiation.
Buyer's agent — owes you:
- Loyalty to your interests
- Disclosure of material information
- Confidentiality of your position
- Advice in your best interest
- Negotiation on your behalf
Seller's agent — owes the seller:
- Loyalty to the seller's interests
- Disclosure of buyer information
- Negotiation for the highest price
- Confidentiality of seller's position
- Maximum marketing effort
Who pays the commission — and what's changing
In a standard Canadian real estate transaction, the seller pays the full commission, which is then split between the listing brokerage and the buyer's brokerage. The seller negotiates the total commission with their listing agent when signing the listing agreement. Historically, the buyer's agent portion of that commission was set by convention at roughly half the total.
This model has come under increasing pressure. typically $400,000–$900,000 for condos and townhomes; detached from $800,000 In the United States, a major class action settlement in 2024 changed how buyer's agent commissions are structured and disclosed. Canadian regulators and industry bodies have been watching this closely, and some changes to disclosure requirements and commission structures are underway or expected. Confirm with any agent you speak to how their commission is structured and who pays what, and get it in writing in the buyer representation agreement.
What doesn't change: buyers who work without a buyer's agent don't automatically save money on the transaction. The listing brokerage typically retains what would have been the buyer's agent portion. typically $400,000–$900,000 for condos and townhomes; detached from $800,000
Dual agency and multiple representation
Dual agency occurs when the same agent, or agents from the same brokerage in some contexts, represents both buyer and seller in the same transaction. The conflict of interest is obvious: you can't fully serve two parties with opposite interests. Ontario addressed this by banning a form of dual agency in 2017, prohibiting "exclusive dual agency" for trades involving RECO-registered brokerages. [verify current figures with a licensed agent or at realtor.ca]
What still exists is "multiple representation," where different agents from the same brokerage represent buyer and seller. In this scenario, both agents are required to reduce their services to maintain neutrality. The buyer's agent can no longer advise on price strategy or negotiate fully on the buyer's behalf. Ontario's rules require written disclosure of multiple representation and acknowledgment from both parties before it can proceed.
In BC, dual agency was banned entirely for residential transactions in 2018. [verify current figures with a licensed agent or at realtor.ca] In Quebec, the OACIQ's rules on conflicted representation differ from Ontario's. Buyers in any province should ask their agent directly what their firm's policy is on representation conflicts before it becomes relevant in a specific transaction.
What to do when you want to buy a listing from your agent's brokerage
If you find a property listed by your buyer's agent's own brokerage, you have options: you can proceed with multiple representation (with reduced advisory services), ask to be unrepresented for that transaction, or find a different property. Know your preference before this situation arises.
Buyer representation agreements in Ontario
RECO (Real Estate Council of Ontario) implemented a rule in December 2023 requiring buyer's agents to have a signed buyer representation agreement in place before showing properties. [verify current figures with a licensed agent or at realtor.ca] The BRA is a contract with the brokerage, specifying duration, geographic scope, and commission terms. It protects the agent's commission if you buy a property they showed you, even if you later switch agents.
Key terms to understand in any BRA: the holdover clause (if you buy a property you viewed with this agent within a set period after the BRA expires, the agent may still be owed commission); the geographic scope (does it cover only Toronto or all of Ontario?); and the duration (negotiate this to something reasonable, typically 30 to 90 days).
How it works differently in BC and Quebec
British Columbia banned dual agency for residential transactions in 2018. BC agents must give buyers and sellers a specific disclosure form before the agency relationship is established. The BC Financial Services Authority regulates agents under the Real Estate Services Act. The buyer representation structure in BC is similar to Ontario in most practical respects, but the dual agency prohibition is more absolute. [verify current figures with a licensed agent or at realtor.ca]
Quebec uses a different regulatory framework entirely. Agents are registered with the OACIQ under the Real Estate Brokerage Act. Quebec's framework uses the term "courtier immobilier" (real estate broker) rather than "agent," and all courtiers work under a mortgage or real estate brokerage licence. The agency and fiduciary framework is conceptually similar to the common law provinces, but the regulatory requirements and disclosure forms are Quebec-specific. [verify current figures with a licensed agent or at realtor.ca]