What’s the Difference Between Being a Real Estate Client and Customer?

I’ve heard that calling myself a “customer” of a real estate professional means I won’t have to pay them for their services. Is that correct?

No. Choosing to call yourself a customer has very little to do with payment. Being a “customer” is a specific type of working relationship you may have with a real estate professional.

Simply calling yourself a customer doesn’t change anything; it’s what is in your written agreement with your real estate professional that dictates responsibilities and obligations, and possible payment.

When you are the customer of a real estate professional, they will act honestly, ensure any information they give you is correct, and exercise due care and skill at all times, but they are not working on your behalf to advance your interest. They cannot give you advice or use their judgement to help you. They can facilitate the deal by providing you with property information and statistics, helping you fill out offers and counter-offers, present those offers, and relay information back and forth.

In a client relationship, the real estate professional owes you fiduciary duties, which boils down to your professional working in your best interests at all times. They will give you advice and use their professional judgement to advance your interest in a transaction.

Paying your real estate professional—no matter the type of relationship you agree to—is negotiable. In residential real estate, client relationships require you and the professional to agree to and sign a written service agreement, and RECA encourages the use of a Customer Status Acknowledgement form if you’re going to be a customer. These agreements outline any compensation, and if you cannot agree on the terms of payment, you shouldn’t sign the agreement and you should find a different real estate professional to work with.

Typically, in a client relationship, the client and the real estate professional will agree on a commission percentage to be paid to the professional upon the completion of a deal.

In a customer relationship, it is less likely that your real estate professional will ask you for payment. This may be because they are in a client relationship with the other party involved in the transaction, who is providing the financial remuneration. That being said, they can certainly ask you to enter into a fee agreement, but you don’t have to agree. Make sure you fully understand any agreement you sign, as it would be legally binding.

Your professional will outline the potential relationship options and any applicable payment before you sign an agreement. It doesn’t matter what you call yourself, it matters what your agreement says, and how you interact with your real estate professional.

“Ask Charles” is a question and answer column by Charles Stevenson, Registrar of the Real Estate Council of Alberta (RECA), www.reca.ca. RECA is the independent, non-government agency responsible for the regulation of Alberta’s real estate industry. We license, govern, and set the standards of practice for all real estate, mortgage brokerage, and real estate appraisal professionals in Alberta. To submit a question, email askcharles@reca.ca.

- Advertisement - /ins>