Transaction brokerage is a model of concurrent representation, which allows an industry member to work with a seller and buyer in the same transaction. In transaction brokerage, a common law brokerage or a designated agent, as the case may be, becomes a facilitator and treats the buyer and seller in an even-handed, objective and impartial manner.
Transaction brokerage is an option clients may choose when a traditional (common law) brokerage is in a conflict of interest as a result of representing two parties (clients) in the same potential transaction. In a brokerage that practices designated agency, this occurs when the individual who is a designated agent is representing two parties (clients) in the same transaction. When this conflict occurs both parties are presented with options, including transaction brokerage.
The brokerage must obtain the consumer’s written and informed consent to transaction brokerage before this relationship may occur and before any offer is presented to buy or sell a property. In a traditional brokerage, if the other party to the potential transaction is represented by the same real estate broker, or another broker employed by that brokerage, unless otherwise agreed to by the parties, the real estate broker needs to discuss the Transaction Brokerage Agreement with the party at the time this conflict occurs and seek the party’s informed, written consent to change the relationship from one of representation to one of facilitation.
In transaction brokerage, the agent (industry member) will now act as a transaction facilitator and provide facilitation services to assist the parties in reaching a mutually acceptable agreement. Facilitation services means services by which the interests of the buyer and seller are met in an even-handed, objective and impartial manner without providing confidential advice, advocating on behalf of either the buyer or seller, or using discretion or judgment that benefits the buyer or seller to the prejudice of the other, and may include:
- providing real estate statistics and information on property including comparable property information available through listing services or other local databases;
- providing standard form agreements of purchase and sale, lease and other relevant documents, and preparing these document sin accordance with the instructions of the client(s);
- presenting in a timely manner, all offers and counter-offers to and from the client(s);
- conveying to the client(s) in a timely manner all information that either wishes to have communicated to the other; and,
- keeping the client(s) informed regarding the progress of the transaction.
Finally, as a transaction facilitator, the agent will fulfill all other facilitation services to both parties as far as they are consistent with the terms of their respective agreements.
For more information about transaction brokerage, please review the Transaction Brokerage Practice Guide for Industry Members and the Transaction Brokerage FAQs.