What is a buyer representation agreement?
A written contract between a buyer and a real estate brokerage in Ontario that sets out the agent's duties, the term of representation, and the commission structure.
In Ontario, a buyer representation agreement is the mandatory written contract that establishes the working relationship between a buyer and a real estate brokerage. Real Estate Council of Ontario (RECO) rules require brokerages to put this agreement in writing before the agent shows properties or performs services on the buyer's behalf.
The agreement specifies three core elements. First, it defines the brokerage's duties to the buyer, including fiduciary obligations and disclosure requirements. Second, it sets a term, which can range from days to months, during which the buyer agrees to work exclusively with that brokerage. Third, it details the commission structure: typically a percentage of the sale price or a flat fee, and clarifies who pays it (seller's brokerage, buyer, or both), as well as what triggers payment (offer accepted, closing completed, or another milestone).
Having this agreement in writing protects both parties. The buyer knows upfront what to expect from their agent and what financial arrangement applies. The brokerage has a clear record of the terms and can collect compensation if the buyer purchases through another agent or outside the agreement. Without a signed agreement, disputes over obligations and payment can become costly.
Many buyers work with residential sales agents under these agreements, particularly in purchase transactions on the residential market.