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First Time Buyers: Make Sure You Are the Client


In regular, everyday life, the words customer and client are pretty much interchangeable.  If you look up customer in the thesaurus, the first synonym is probably going to be “client.”

In real estate, though, these two words hold differences in meaning that could cost you!

What Does it Mean To Be a Client?

When you decide to work with a realtor, you’ll be asked to choose what type of representation you want.  The most common choice for buyers is a “Buyer Representation Agreement.”

There are two highlights to the client relationship that you should be aware of:

  • When you choose this option, the brokerage (through the agent you work with and others who help with your deal) has important obligations to you.  Their fiduciary duty under the legislated Code of Ethics means that they must protect your best interests in the transaction.

Of course, they also owe you fairness, honesty, and integrity.

We often say that we work to protect the interests of our clients as though they were our own.

An example of this is when your agent does research to find out what comparable properties have recently sold for.  This can help you know how much to offer, especially if you’re in a multiple offer situation.

It could involve recommending that you add a specific condition to your offer.  Your representative may speak to your mortgage broker and learn that you need the protection of a finance condition to make sure you don’t risk your deposit funds by making a prematurely firm offer.  Or they might strongly recommend that you have a water test or septic inspection on a rural property.

Before closing, issues may come up where your agent works to protect your interests. For instance, if there is damage to the house during a storm, he or she will work hard to negotiate for you to be compensated for it.

  • When you’re a client, the salesperson must take reasonable steps to determine, and then disclose to you, all material facts about the property.

A material fact is something that:

    • could affect a “reasonable person’s” decision to purchase or sell a property;
    • may influence what price to offer
    • may influence what conditions are attached to any agreements of purchase and sale.

The thing about material facts is that what matters to one person is sometimes of no consequence to another.

One example of this is the sensitivity some buyers have to a property where there has been a death at the house.  Some people really aren’t bothered by it, and they reason that most old houses ‘probably have had a death at some point.’ They just shrug it off.

To others, this is a very important piece of information.  They are highly uncomfortable at the thought that someone may have died on the property. They would walk away from a house for this reason alone.

Or maybe you know you’d really like to put an inground pool in the backyard, and it would be a deal-breaker for you if you couldn’t.  For you, it would be a material fact to know for sure you could have that pool.

Your agent will ask you questions about your lifestyle, your family, your financial goals, your possible renovation plans, and more.  They’re not just being nosey.  These conversations can help us to know when we need to do a bit of extra research or ask more questions.

Some material facts are more obvious than others.  An inch of water in the basement, train tracks across the backyard, or a busy industrial complex across the street – any of these would affect a buying decision, and they’re easy to see.  But some are subtle or harder to pinpoint, and are specific to an individual buyer.

As a clientthat buyer has the right to expect to be informed of these details.

What Does it Mean to Be a Customer?

Once in a while, a buyer will choose a Customer Service Agreement instead of a Buyer Representation Agreement.

Most often, this happens when the agent is also the listing agent. In this case, they are already under contract to represent the best interests of their seller client.  To avoid a conflict of interest, this agent may offer to treat a buyer as a “Customer” instead.

Brokerages have the responsibility to treat customers with fairness, honesty, and integrity.  Agents must provide competent and conscientious service.

They must disclose to you any material facts of which they are already aware or of which they should be aware.

However, they’re not required to take any additional steps to find information for you.  If they don’t already know whether there has been a death at the property or if you can dig for a pool in the backyard, you’ll be on your own to find those details.

They’re also not obliged to negotiate a deal with favourable terms for you.  You’ll have to decide your own pricing strategy, and you can expect that they will share anything you tell them with their seller client.

The Choice is Yours

Some buyers feel that they know enough that they don’t need any guidance from a real estate agent.  They may decide that there will be significant savings if the listing agent is willing to offer a reduced commission to the seller.

Others, especially first-time buyers, can learn a lot and can benefit from the protection they get when they hire their own buyer’s agent.

Whatever choice you make, take the time to understand your options before agreeing to anything.  Research information available to buyers online.



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