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June 20th, 2019 
Todd Black
Sales Representative
BUS:(416) 966-0300 CELL:(416) 731-7542


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Agency Relationships

What is an Agency Relationship?

In real estate transactions there are usually two parties involved; a vendor who owns a property and who wants to sell it, and a purchaser who wants to buy a property. In real estate transactions, agency relationships are created when vendors or purchasers ask REALTORS to act on their behalf in real estate transactions. The vendor or purchaser (known as the principal) will define the nature and extent of the agency relationship; in other words, what the agent is being asked to do.


The Toronto Real Estate Board is an association of REALTORS.  It operates the Multiple Listing Service (MLS) so that sellers, through their agents (known as the Listing Agent), can publicize the availability of their property. By placing a property on the MLS System, the Listing Broker (agent of the vendor) lets it be known to every other REALTOR that they can be a "Co-operating Broker" (working for the purchaser).

The Toronto Real Estate Board requires that its members (realtors) subscribe to a strict Code of Ethics and all By-Laws, and operates Ethics and Arbitration Committees to ensure high standards.


An agent who represents a principal owes that principal the highest duty of "utmost good faith"; the agent must represent the principal's best interests at all times. The agent owes his principal a duty of confidentiality regarding information about the principal. The term "Agency Relationship" therefore describes the relationship between a buyer or seller and their realtor.

Vendor and Listing Broker

A vendor engages a REALTOR to act on its behalf in the sale of a property; this REALTOR is known as the Listing Broker. The vendor and the Listing Broker will enter into an MLS Listing Agreement whereby the agency of the Listing Broker is confirmed, and the vendor agrees to compensate the Listing Broker for its efforts through a commission on the final sale of the property. By placing a property on the MLS System, the Listing Broker offers all Co-operating Brokers to bring a purchaser and  to share the commission the Listing Broker is being paid by the vendor.

Purchaser and Buyer’s Agent

When a REALTOR acts as Buyers Agent (whether paid by the purchaser directly or through the Listing Broker), the purchaser can expect the REALTOR to act in the purchaser's interest alone and that there is no relationship with the vendor. This relationship is typically established by a Purchaser's Agency Agreement.

reprinted from the Toronto Real Estate Board's brochure, "Agency Relationships Explained"

Todd Black

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