Who are the unscrupulous agents in Toronto’s real estate market?
It all depends on who you’re asking.
Some real estate agents engage in unethical behaviour, industry veterans recognise. But so do buyers and sellers.
The machinations of Toronto’s blazingly red-hot market are receiving a lot of scrutiny these days. Last week, an undercover investigations conducted by CBC’s current affairs program Marketplace about the real estate industry makes further efforts to get their own message out before the broadcast aired.
RECO, which enforces the Real Estate Business Brokers Act 2002 and its Code of Ethics on behalf of the members of the provincial government, fostered consumers to complain if they suspect skullduggery in a housing deal.
This week, they’re likely fielding a lot of new grievances after that reminder. I’ve heard from several purchasers with their own tales.
Meanwhile, agents and brokerages are also are taking action to distance themselves from the bad actors who tarnish the entire industry.
The flurry comes after Marketplace glistened a light on agents who end up “double-ending” a higher-than-average percentage of their bargains. The practise, also known as multiple representation, involves an agent who represents both the buyer and the marketer for the same property. Multiple representation also refers to a broker or agent representing more than one competing purchaser in the same transaction. It’s within the rules but only if the parties are fully informed and agree to it in writing. There can be no sharing of confidential information.
In the Marketplace investigation, the reporter went to open houses and posed as a buyer without an agent. She asked the agents at the open houses what they could do for her. One considered that she hire an agent to act for her. But others told things along the lines of” I will block other offerings” and” I will make sure you get the house .”
That kind of behaviour is a clear violation. RECO can fine the miscreant or, in severe cases, cancelled their registration.
But real estate agents who adhere to the rules point out that clients may be the ones pushing to bend them.
Mr. Carr, a broker, tells in an e-mail that he has encountered purchasers who are openly willing to break any regulation that would prevent them from winning a bid war.
” Some of those purchasers are not only willing to break the rules but in many cases offer cash incentives .”
Sellers, he adds, may ask an agent not to disclose a significant flaw about the house. That falls under the category of wrong-doing as well.
As a listing agent Mr. Lackie has occasionally had a buyer’s agent approach him and say ,” Can you tell me what the most important one bid is? My purchaser genuinely craves the house .” He simply tells them to set their best offer in writing.
The firm takes a hard stance against misbehaviour by its own representatives, he adds.
” Anybody that does something like that is out the door. There are no second possibilities .”
When he represents the seller, he also promotes the purchaser’ agents to present their offerings in person rather than mailing them by e-mail or fax. If he does receive offerings electronically, he adds them to the queues so the marketer can review them.
” There’s no chamber for backroom wheeling and dealing .”
But Mr. Lackie has had occasions where dwelling hunters have approached him and asked if he would be able to get inside information or skew a bid war in their favor. He asks them to leave.
” If person asks me that, that’s a red flag .”
He won’t violate the Code of Ethics and he doesn’t want a client that would pushing him to do so. He also figures if they’re willing to operate in that manner, they likely won’t be honest or loyal in its relations with him either.
People who say they desperately want a certain dwelling should let their bid reflect that, he adds. He says that motive sometimes clarifies the offerings that blow all the other competition away.
” If you totally have to have it, been demonstrated that in the amount you’re willing to pay for it. It’s as simple as that .”
Sellers can be extremely greedy too, he tells. When Mr. Lackie is representing a marketer and multiple offerings are expected, he notifies all of the participants that there will be only one opportunity to bid. At the end of the night, some marketers have looked at the top offer and prompted him to ask for a second round of bid that are intended to squeeze out a higher price. Mr. Lackie advises the seller to stick with processes and approving the cheque in hand.
“We attained those ground rule from the very beginning ,” he reminds the seller.
As for “consumers interests”, brokers and agents lodging their complaints with RECO, many complain that the investigatory process is too slow and criminal penalties too lax. Many are calling for stricter monitoring of the industry in Ontario.
initial post appeared in Globe And Mail.
