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Government may crack down on lucrative agent tactic

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Real Estate Professional | 22 Feb 2016, 08:15 AM Agree 0
Agents have made hefty profits from this controversial real estate trick that may soon become a thing of the past
  • nick | 22 Feb 2016, 12:47 PM Agree 0
    Unless i am missing something it is the duty of the agent in ontario to let vendors know the true value of their home. If the agent is able to flip the property prior to closing without substantially improving the property that would constitute negligence on behalf of the agent which is actionable. Agents could and would be sued . Is BC an exception to this principle of ethics.
  • Francis Dryden | 22 Feb 2016, 01:04 PM Agree 0
    Disclosure, disclosure, disclosure... BC is getting as bad as Quebec for being exempt of morals or ethics.
  • Lois | 22 Feb 2016, 01:04 PM Agree 0
    In Quebec, a brokered promise to purchase cannot be assigned without the seller's written authorization.
  • | 22 Feb 2016, 01:32 PM Agree 0
    Give us a break, are we living in the "Communist Republic of Canada". Selling assignments in real estate has been going on as long as Canada has been a country. In fact, the commercial real estate sector could not survive without the "right of assignment". It sounds like a bunch of consumers are crying the blues because they thought they knew what the market could bear for their home only to find out it could bear more. MORALS, ETHICS does anyone truly understand what that means. Really what the government and a bunch of "willy nilly" consumers are saying is that they want to strip a purchaser of their right to sell a contract which they purchased.
  • Ian Hocking | 22 Feb 2016, 02:10 PM Agree 0
    There are several ways of dealing with this.
    1) Certainly assigning contracts is not new and certainly in the commercial world it is done frequently to allow new corporations to be formed to own commercials properties. However, there is another way around that, instead of assigning the contract write in a clause that allows for an "Engrossment" on closing to occur in any name. That doesn't assign the contract and the original Buyer is still on the hook, what it does say is, "This contract will close, in a name that may not be the buyers name, but it will close." That makes it much more challenging for the Buyer to 'flip' the property.
    2) It appears to me that the semantics of the contract is not the real issue. The issue would appear to be a flow of $$ from place A to place B. Place be is Vancouver. The reason is not totally clear although certainly overseas money arriving is a likely driver. So why not introduce a law that instructs all lenders to require a 35% down payment in case for all non residents of Canada. At least that way IF there is a nasty pull back, those who are speculating and not Canadian will have some significant skin in the game and stand to lose a fair bit before the Canadian banking system has to take the strain.
    3) To the point of an evaluation. The correct price is, "Given a willing buyer and a willing seller neither under any undue pressure or adversity" reach an agreement. The challenge with pricing when markets are like this is no amount of looking backward for comparables can really help you in looking forward beyond being a guide. Projecting is by definition subjective and projecting based upon a non fundamental rational is near impossible. I agree that Agents have a responsibility to their client to help with pricing, but what is happening at the moment has little to do with any conventional pricing method.
    This sort of behaviour usually ends with an unhealthy bump, what goes straight up, has a habit of going straight back down again. Real estate is no exception to that, the question is when, not if.
  • Gordon Barthels | 22 Feb 2016, 02:11 PM Agree 0
    I'm assuming the 3 previous comments were actually written by fellow Realtors. I say this because I think that it's unfortunate that fellow Realtors actually voice concerns about the morals and ethics of BC Realtors, oh and we might as well through Quebec in with them, when we all know full well that it only takes a couple of unethical agents to tarnish our entire industry. In the Vancouver area we have approximately 16,000 Realtors, let alone the rest of the province, and our industry is doing a hell of a good job dealing with what has been brought upon us. Most Realtors have become so cautious and transparent for fear of anything that could be construed as unfair. Many Realtors voluntary will no longer practice Dual Agency simply because of the perception it may create.
    And Nick, you are missing something. I don't know what the market is like in your area, but imagine this; you do a CMA for a seller based on recent sales. Then you add another 5% to your price, just because the market is so nuts, then you list the property and it sells in multiples for another 5% over that. We don't tell the seller what the true value of there property is, the market does. We could list every property for $1.99 right now and in 3 days the highest bidder will have established what it's really worth. And the Realtor that enjoys working in this market is hard to find. Go through half a dozen multiples and not get one. Sellers are scared to list for fear of not finding something. Subject to sale does not exist in this market. The real winners are the Sellers that are cashing out.
    Yes we have a few ethically challenged Realtors, but as I'm sure it is in every other market across the country, we have a vast majority of members that are proud of the high standard by which we operate.
  • Roy | 22 Feb 2016, 02:39 PM Agree 0
    one thing about that story is that the seller or the agent should had an appraiser value the property. Shouldn't have depended on only the agent. Other thing is that the market here in Vancouver is just crazy. These guys buying this type of home just don't care how much they are paying. They don't need financing, they have the money and just have to have.
  • | 22 Feb 2016, 04:07 PM Agree 0
    you have to have assignment clauses in commercial real estate, it is a must have right, because there are always multiple people putting the deals together and somebody has to start the process, can not live with out it, nothing would get done, it is necessary
  • Lisa | 22 Feb 2016, 04:17 PM Agree 0
    Nick, if the agent represented only the buyer, he has no duty to the seller.
  • Diane | 22 Feb 2016, 06:46 PM Agree 0
    Interesting, but I thought we needed to complete an assignment contract at the same time as the original and the seller had to be told. Hope someone hangs these idiots who make things for those of us who have integrity.
  • Norm | 28 Feb 2016, 03:12 PM Agree 0
    Was the "agent" who bought the home a realtor or an unlicensed person fronting for the wealthy business man. It does make a differance. Just because the home got relisted doesn't mean it will sell for an extra million. If it does then it was listed too low to begin with which would be blamed on perhaps an inexperienced agent. If it does not sell for a huge profit then there is no story. It seems the realtor these days gets blamed for everything. Yes I am a realtor. 47 years experience.
  • John Henley | 04 Mar 2016, 10:03 AM Agree 0
    ...right you are Norm and Gord, and no, BC is not an exception to the practice of good ethics. Any contract in BC can be assigned unless the contract specifically forbids it. However, should one of the realtors in the deal be part of an assignment of the contract without disclosing that fact? Absolutely not. He or she is supposed to be part of the transaction representing his/her BUYER'S/SELLER'S best interests, not their own. Let's just say that it is "certain" realtors who are mainly practicing this highly unethical way of doing business. The real estate trade in Vancouver has changed dramatically over the last few years...read between the lines all you want...
  • On the cusp! | 07 Mar 2016, 08:24 AM Agree 0
    The easy answer is to not allow assignment sales. But this brewhahaha is really about hot asian money or hot chinese money. The taps are being turned off and once the flow stops Vancouver and many other popular destinations are in for a huge hair cut!
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