Chapter 1

Hire a Real Estate Agent

If you are like most Torontonians, buying a house will be the single biggest financial investment you will ever make. Your real estate agent will be your guide.

Your agent is the most important member of your team

As you embark on the process of buying your first home, you’ll need to hire a team of experts, including a lawyer, a home inspector, a mortgage broker, an accountant, and even contractors or service people.

The most important member of this team is your real estate agent. So let’s start by looking at what an agent is, and what your agent will do for you.

Then we will explain how to find the agent that’s right for you.

What is a real estate agent?

The Real Estate Council of Ontario (RECO) is responsible for the registration and oversight of real estate brokers and salespeople, subject to the Ontario Real Estate and Business Broker’s Act. In this guide, we refer to brokers and salespeople as real estate agents.

Real estate agents who are registered with RECO can legally assist you in buying and selling a house. To get that licence, an agent must complete extensive coursework followed by two years of articling through the OREA Real Estate College. Starting in 2020, this education will be delivered by a consortium led by Humber College in Toronto.

Some real estate agents decide to become realtors. This means they have taken the additional step of joining a local real estate board like the Toronto Real Estate Board (TREB). Joining TREB gives a realtor membership in other organized real estate associations, including the Ontario Real Estate Association and the Canadian Real Estate Association. These are trade associations, and membership is not required to work as a real estate salesperson in Ontario.

What is the difference between a buyer’s agent and a listing agent?

A real estate agent can wear two hats. Some agents specialize in wearing one hat or the other, and some agents wear different hats at different times.

Buyer’s Agent

If you hire an agent to help you buy a home, they are legally bound to help you, the buyer, and to make decisions in your best interests. Example: The buyer’s agent won’t tell anyone that your parents have given you one month to get out of the basement, because that would undermine your ability to negotiate a better price.

Listing Agent

The listing agent represents the person selling the house. They are called the listing agent because they have listed the house for sale. The law requires listing agents to disclose things that are visible to the naked eye, or things they should reasonably be aware of, but otherwise the listing agent is legally bound to help the sellers and to protect their interests. Example: The listing agent won’t reveal that the homeowners are in a rush to sell because they’ve accepted new positions overseas.

Dual Agency or Multiple Representation

Sometimes, an agent will put on both hats at the same time, and represent both the buyer and the seller. This is called multiple representation, and we recommend first-time home buyers avoid it. While there can be benefits to dual agency – like reduced fees – the fact is that the agent’s loyalties are divided. While this may not be a problem for experienced or sophisticated buyers, we believe first-time home buyers need a dedicated agent to protect their interests. If you’re still considering this option, this article from RECO outlines the pros and cons of multiple representation.

What do real estate agents do? Why do most people hire a real estate agent?

You are free to buy your own home in Ontario, but most people opt to hire a real estate agent. Why?

Buying a home is a large financial undertaking. Your agent will do most of that work for you, and you’ll benefit from his or her deep community connections, years of experience and strong understanding of the market. Your agent will:

  • Finding homes that fit your budget and your needs
  • Arranging showings
  • Conducting market assessments and appraisals
  • Writing offers and negotiating on your behalf
  • Filing paperwork
  • Managing relationships with lawyers, mortgage broker and inspectors

When you use registered, experienced and reliable agents like the team at, you can rest assured that you’re seeing all the properties that meet your needs, negotiating the best price on your first home, and correctly completing complex financial and legal tasks that are part of every home purchase.

In addition to these professional benefits:

You won’t save anything if you so it alone.

Typically, the seller pays the commissions for both the buyer’s agent and the listing agent. So as a buyer, you won’t save anything by working without an agent.

 You will get an experienced negotiator.

Bidding wars are common in Toronto’s overheated real estate market, and experienced agents know how to win. It’s important to understand that negotiating for a house is not like negotiating for a bike or a car; there are many legal, financial and emotional factors in play, and the stakes are much, much higher. Negotiating is a skill, and like all skills, people get better with practice. An experienced agent who has been through dozens or hundreds of negotiations will know when to bid, when to hold and when to fold. Plus, an agent has no emotional attachment to the property, and can negotiate with a clear head and a single goal: to get you the best possible price on the home you love.

Agents know the market

At, we regularly consult with financial advisors and economists and we take a long view – all to protect your interests. An agent working full-time in real estate will know what is happening in most Toronto neighbourhoods: where the developments have been approved, where the city is investing in new bike paths or transit, any local controversies or problems and, of course, the going price for homes. Realtors can use a proprietary database to see what nearby homes have sold for (known as comparables, or comps). This helps them help you decide whether an asking price is fair.

Agents have connections

You may be surprised to learn that many homes never make it onto the Multiple Listings Service (MLS) – a database of properties for sale –  as agents sometimes snap them up for their clients before they become public knowledge. A real estate agent has a network of past buyers, sellers, friends and colleagues who are constantly working with people at various stages in the buying and selling process, and they can use this network to your advantage.

Agents know how to handle problems

What should you do if the home inspector finds serious problems? What happens if the previous owner failed to get permits for a deck or renovation? How do you handle a hostile negotiation? Real estate agents are trained to deal with these problems and can help you overcome the hurdles you encounter on the road to home ownership.

How do I find a real estate agent?

Now that you know what a real estate agent does, you’re ready to hire.

Start by asking family and friends for a referral, or stop by a real estate agency in your neighbourhood. You can also look up an agent who advertises regularly in your area, or do a Google search. Once you’ve found three good candidates, the real work begins.

First, do your research.

  • Conduct a professional search through the Real Estate Council of Ontario to make sure the agent is licensed to practice in Ontario.
  • Read the agent’s LinkedIn page and review his or her blog and website.
  • Look at ratings and reviews for both the agent and the brokerage.
  • Perform a Google search to find any other publicly available information.

Second, conduct an interview.

If you find an agent who might be a good fit, call and arrange an interview. This is best done in person, but you can do it over the phone as well. Here are nine questions you should ask your prospective agent and the answers you should expect to get!

9 Big Questions to Ask Before Hiring a Buyer’s Agent

1 | What is your experience in the neighbourhoods I’m interested in?

Buying a home involves evaluating neighbourhoods and communities, and your real estate agent should be able to tell you how a neighbourhood is changing, comment on the quality of the schools, and know where to find the closest grocery store and park. A great agent will ask about the kind of lifestyle you want, and suggest neighbourhoods you haven’t yet considered.

2 | What is your expertise in the type of property I want to buy?

Buying a condo isn’t like buying a house, and lofts, co-ops and commercial properties each have unique considerations and challenges. A good agent will help you focus on what’s different, and why it’s important. For example, in-depth knowledge about wet basements and knob and tube wiring is crucial if you are buying a century-old home, but less if you’re buying a condo.

3 | Tell me about your negotiation style and experience.

Buyers want their real estate agent to negotiate skillfully, but surprisingly, negotiation strategies aren’t covered in-depth by Ontario’s real estate licensing courses. So good agents will seek additional education, like the Certified Negotiation Expert designation or the advanced Master Certified Negotiation Expert designation. These agents will know how to approach a negotiation in Toronto’s hot market. At the very least, your agent should be able to tell you what “BATNA” means – it stands for “alternative to a negotiated agreement,” and it’s the foundation of almost all negotiations.

4 | What are the legal pitfalls I need to worry about?

This question is meant to test the agent’s legal knowledge. Sure, you’ll be hiring a real estate lawyer to help you close on the property, but there are all sorts of legal issues that will come up before closing day. Realtors should be familiar with disclosures, conditions, the offer paperwork, closing issues, representation intricacies and more.

5 | What is your approach to winning a bidding war?

This is a very important question if you’re buying a house in Toronto, where bidding wars are common. Great buyer’s agents understand what’s required to win. Hint: It’s not just buckets of money. Your agent should answer this question by talking about the importance of showing up, having no conditions, getting a deposit cheque in hand, nurturing a relationship with the listing agent and, of course, strategy.

6 | What is your experience in helping people like me?

Are you a single first-time buyer? Newlywed? Buying a house because your family is growing? Moving to the city for the first time? Buying a home often happens during a transition period, and there are unique considerations for every different kind of buyer. It’s critical that your agent understands what these are.

7 | Can I talk to some of your past clients?

Your relationship with your real estate agent doesn’t end when you get the keys to your new home. Good agents close the deal and then become a resource for you, evaluating future renovations and notifying you when your property value changes. Great agents will be happy to supply a list of previous clients who will provide positive feedback about their services. Even if you don’t get around to calling the references, how the agent handles the question will tell you a lot.

8 | What kinds of partnerships do you have with home service professionals?

A top agent will not only have connections with lawyers, lenders, appraisers, surveyors and home inspectors, but they’ll also have preferred relationships with handymen, painters, electricians, plumbers, cleaners and more. The very best agents aren’t just experts at buying a home, they’re experts at owning a home, too.

9 | Ask yourself: Do I trust this agent?

Sometimes, you just need to listen to your gut. Is the agent listening to you? Are they asking good questions? Do you feel they understand what you want? Do you trust them? Do you like them?

Should I sign an Exclusive Buyer Representation Agreement?

Some buyer’s agents will ask you to sign an Exclusive Buyer Representation Agreement. This agreement commits you to working with the agent until you purchase a home, or until a certain period of time has elapsed (usually six months, but it can be extended if all parties agree). Read this agreement carefully.

An agreement of this kind protects the agent from buyers who use their services for several weeks or months, and then buy without the agent’s assistance. In these cases, the agent works a great deal, but earns nothing.

While the Exclusive Buyer Representation Agreement exists primarily to protect the agent, buyers also benefit. Commitment is a two-way street: when you commit to your agent by showing your intention to pay them for their work if you buy a home, they commit to you. Knowing they will be paid motivates them to find you the perfect home, and to get you a great price. The agreement also typically spells out how the agent will be paid, which is an important piece of information to have as you embark on your search (more on this below).

How does my real estate agent get paid?

Real estate agents are usually paid on commission. In Ontario, home sellers typically set aside five per-cent of the selling price to pay the commission. That money is typically split 50/50 between the listing agent and the buyer’s agent, who in turn pay brokerage and other fees. If you do not buy a home, your agent will not get paid.

Example: If you buy a house for $700,000, the brokerages are paid a total of $35,000. Your agent will get a portion of that fee – the exact percentage depends on the agent’s agreement with the brokerage. The agent will subtract taxes, brokerage desk fees of between $100 and $450 a month, along with annual dues of roughly $1,300. The remainder is what they take home.

Your agent’s compensation will be outlined in the Exclusive Buyer Representation Agreement that you sign when you first bring them onto your team. They should be able to show you the part of the agreement that outlines how they will be paid, and they should be happy to answer any questions you have about their compensation.

While most commissions in Ontario will follow this simple structure, be mindful that real estate commissions can also be quite complex. If you have questions, ask. An agent’s refusal to discuss payment should be considered a red flag.

A note on language

Under the Ontario Real Estate Business Broker’s Act, an agency relationship exists between yourself and the real estate company of your choice, otherwise known as the brokerage. The individual you choose to represent your interests in the purchase of your first home could be either a broker or sales representative acting on behalf of the brokerage they are registered with. For the purposes of this guide, we’re going to refer to these people as real estate agents, because that’s the term most people use. But remember: Legally, your agent is the brokerage, not the person.