Legally, an agent is one who is authorized to act on someones behalf. When buying or selling real estate, the first question you should be asking the realtor® is "Whose agent are you?"

For the sellers, it's fairly straightforward. Once a listing contract is signed, the seller and the real estate company have created an agency relationship. The real estate agent will now act on behalf of the seller, and protect the seller's interests in the transaction. This means getting the best terms and conditions for the seller, keeping the seller's personal information confidential such as their bottom price, and advising the seller of market conditions which will affect the sale of their property.

It's not as straightforward for the buyer. When a buyer calls an agent about a particular property which he saw advertised by that agent, it is safe to assume this agent has signed a listing agreement with the seller.The agent is therefore working on behalf of the seller to get the best deal for him, and not the buyer. Buyers often do not understood this concept. For that reason, in the mid-nineties, the Canadian Real Estate Association added an "agency disclosure" requirement to the Code of Ethics.

Article 3 of the Code of Ethics states:
A realtor® shall fully disclose in writing to, and is advised to seek written acknowledgement of disclosure from all parties to a transaction regarding the role and the nature of service the realtor® will be providing to the client versus the customer or other party to the transaction. The realtor® shall also disclose his or her role to the other realtor® involved in the transaction.

In most places in Canada, a buyer can work with his/her own buyer agent in a real estate transaction. A buyer agent will work toward obtaining the best deal for the buyer; keeping the buyer's personal information confidential including the highest price they are willing to pay for the property, and advising the buyer of terms and conditions that should be included in the offer to purchase.

The way the agency system works varies slightly from province-to-province, but the most important question any buyer should be asking a realtor® is: "Whose agent are you?"