Real Estate

CBC undercover & multiple offers

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  • Nov 14th, 2016 1:16 am
[OP]
Deal Fanatic
Jul 3, 2011
5768 posts
2932 upvotes
Thornhill

CBC undercover & multiple offers

Apparently, an undercover CBC investigation will soon reveal some unethical practices when it comes multiple offers - about time!

The most important take away from this is that it is never a good idea to have the Realtor represent both buyer and seller.

I've said this a hundred times if not more. It doesn't matter how famous they are, how big they are, how important they think they are or how smart they think they are, when anyone, that is seller, buyer or Realtor says it can be handled fairly and without conflict of interest, they're misleading you.





I guess we have to stay tuned for the report.
38 replies
Member
Aug 11, 2016
498 posts
151 upvotes
licenced wrote: Apparently, an undercover CBC investigation will soon reveal some unethical practices when it comes multiple offers - about time!

The most important take away from this is that it is never a good idea to have the Realtor represent both buyer and seller.

I've said this a hundred times if not more. It doesn't matter how famous they are, how big they are, how important they think they are or how smart they think they are, when anyone, that is seller, buyer or Realtor says it can be handled fairly and without conflict of interest, they're misleading you.





I guess we have to stay tuned for the report.
Not surprising at all, but it would be rather difficult to enact any effective measure to combat against this, as even in an most transparent public auction style sale there could still be the chance of bid schilling...
[OP]
Deal Fanatic
Jul 3, 2011
5768 posts
2932 upvotes
Thornhill
On the contrary.

The practice can be outlawed where a Realtor cannot represent both buyer and seller but may only act in a customer service capacity and there can be no change in compensation and

A brokerage that is a sole proprietorship may not represent both parties unless it is the sole brokerage within the area.

This is similar to the requirements for lawyers.
Afv1234 wrote:
licenced wrote: Apparently, an undercover CBC investigation will soon reveal some unethical practices when it comes multiple offers - about time!

The most important take away from this is that it is never a good idea to have the Realtor represent both buyer and seller.

I've said this a hundred times if not more. It doesn't matter how famous they are, how big they are, how important they think they are or how smart they think they are, when anyone, that is seller, buyer or Realtor says it can be handled fairly and without conflict of interest, they're misleading you.





I guess we have to stay tuned for the report.
Not surprising at all, but it would be rather difficult to enact any effective measure to combat against this, as even in an most transparent public auction style sale there could still be the chance of bid schilling...
Penalty Box
Dec 27, 2013
8003 posts
3988 upvotes
Toronto
is it really that bad though?
Deal Addict
Mar 10, 2011
2248 posts
374 upvotes
Toronto
Will removing the Realtor ability to represent both buyer and seller solve the unethical multiple offer practices? or is that just one of many contributing factors?
Member
Aug 11, 2016
498 posts
151 upvotes
licenced wrote: On the contrary.

The practice can be outlawed where a Realtor cannot represent both buyer and seller but may only act in a customer service capacity and there can be no change in compensation and

A brokerage that is a sole proprietorship may not represent both parties unless it is the sole brokerage within the area.

This is similar to the requirements for lawyers.
Afv1234 wrote:
licenced wrote: Apparently, an undercover CBC investigation will soon reveal some unethical practices when it comes multiple offers - about time!

The most important take away from this is that it is never a good idea to have the Realtor represent both buyer and seller.

I've said this a hundred times if not more. It doesn't matter how famous they are, how big they are, how important they think they are or how smart they think they are, when anyone, that is seller, buyer or Realtor says it can be handled fairly and without conflict of interest, they're misleading you.





I guess we have to stay tuned for the report.
Not surprising at all, but it would be rather difficult to enact any effective measure to combat against this, as even in an most transparent public auction style sale there could still be the chance of bid schilling...
I don't think that would solve the problem unless:

- all bidders/buyers are required to personally attend the offer presentation
- all offers are made in person witnessed by all parties involved
- all actual bid amounts should be announced made public, essentially a totally transparent auction style process
-agents should excuse themselves from the bidding process due to conflict of interest, i.e. Even a buyer agent would act against his own client's best interest by urging him to bid high in the hopes of quickly securing his own commission!! Outlawing dual agency would hardly resolve that problem...

How about we eliminate the need for realtors all together? This day and age with comps data easily accessible by all, more & more are searching through sites like realtor.ca, why not reduce our expense and cut the middleman, take our own calls host our own showings, and hold public auction style sales but bid shilling would still present a problem...

- therefore we would need to further verify the background info of each potential bidder to ensure there is no collusion of interest, i.e. no friends or distant family members etc which is impossible to put in practice, renowned auctions houses like Christies can't even manage this level of scrutiny.

So yes this maybe a problem but unfortunately we would just have to live with it...
[OP]
Deal Fanatic
Jul 3, 2011
5768 posts
2932 upvotes
Thornhill
Multiple offers isn't unethical because under the free enterprise system, the seller has every right to get as much as possible.

The issue is the unlawful, unethical and unfair practice of telling one of the potential buyers what the competing bids are so that the listing Realtor can double-end the sale. This invariably is favouring the Realtor and not the seller or buyer.

A Realtor's fundamental fiduciary duty is to ensure their client achieves the best deal possible. Too many think this means dollars, yet that's only part of the equation, the other and most important part is to take all precautions to ensure their client has been protected against any legal action down the road.
Biff88 wrote: Will removing the Realtor ability to represent both buyer and seller solve the unethical multiple offer practices? or is that just one of many contributing factors?
[OP]
Deal Fanatic
Jul 3, 2011
5768 posts
2932 upvotes
Thornhill
None of what you suggest will reduce or eliminate the issue here which is that the Realtor is breaking the law by cooking the bids.

Making the bid public is self-serving only to the buyer and that's not how the courts have interpreted free enterprise. The seller of any product has every right to get the most they can for their product and service. Buyers need to understand that and only tend to once the shoe is on the other foot and they're in the seller's seat - all of a sudden they love the idea of blind bidding.

You also by law cannot discriminate in the way you suggest by blocking friends, family members etc. Those are enshrined civil rights.

As for eliminating Realtors, this is not a communist country. Even so, third party fiduciary involvement is intended to and does reduce the rip-off between buyer and seller. Much like the rip-off noted from the sale of items in off topic. The failures are because the charges I noted above aren't in place and also that the industry was allowed to get involved in offering fsbo services where the fall-out from bad deals negotiated strictly between buyer and seller are also now attached to the industry.

Illegal practices will never be eliminated in any service or profession because some people are just intent on being crooks. But the deterrents can be tightened as I've suggested and they will eventually be and will be patterned after the legal industry's change to dual representation.

It's not rocket science.
Afv1234 wrote:
licenced wrote: On the contrary.

The practice can be outlawed where a Realtor cannot represent both buyer and seller but may only act in a customer service capacity and there can be no change in compensation and

A brokerage that is a sole proprietorship may not represent both parties unless it is the sole brokerage within the area.

This is similar to the requirements for lawyers.
Afv1234 wrote:

Not surprising at all, but it would be rather difficult to enact any effective measure to combat against this, as even in an most transparent public auction style sale there could still be the chance of bid schilling...
I don't think that would solve the problem unless:

- all bidders/buyers are required to personally attend the offer presentation
- all offers are made in person witnessed by all parties involved
- all actual bid amounts should be announced made public, essentially a totally transparent auction style process
-agents should excuse themselves from the bidding process due to conflict of interest, i.e. Even a buyer agent would act against his own client's best interest by urging him to bid high in the hopes of quickly securing his own commission!! Outlawing dual agency would hardly resolve that problem...

How about we eliminate the need for realtors all together? This day and age with comps data easily accessible by all, more & more are searching through sites like realtor.ca, why not reduce our expense and cut the middleman, take our own calls host our own showings, and hold public auction style sales but bid shilling would still present a problem...

- therefore we would need to further verify the background info of each potential bidder to ensure there is no collusion of interest, i.e. no friends or distant family members etc which is impossible to put in practice, renowned auctions houses like Christies can't even manage this level of scrutiny.

So yes this maybe a problem but unfortunately we would just have to live with it...
Member
Aug 11, 2016
498 posts
151 upvotes
licenced wrote: None of what you suggest will reduce or eliminate the issue here which is that the Realtor is breaking the law by cooking the bids.

Making the bid public is self-serving only to the buyer and that's not how the courts have interpreted free enterprise. The seller of any product has every right to get the most they can for their product and service. Buyers need to understand that and only tend to once the shoe is on the other foot and they're in the seller's seat - all of a sudden they love the idea of blind bidding.

You also by law cannot discriminate in the way you suggest by blocking friends, family members etc. Those are enshrined civil rights.

As for eliminating Realtors, this is not a communist country. Even so, third party fiduciary involvement is intended to and does reduce the rip-off between buyer and seller. Much like the rip-off noted from the sale of items in off topic. The failures are because the charges I noted above aren't in place and also that the industry was allowed to get involved in offering fsbo services where the fall-out from bad deals negotiated strictly between buyer and seller are also now attached to the industry.

Illegal practices will never be eliminated in any service or profession because some people are just intent on being crooks. But the deterrents can be tightened as I've suggested and they will eventually be and will be patterned after the legal industry's change to dual representation.

It's not rocket science.
Afv1234 wrote:
licenced wrote: On the contrary.

The practice can be outlawed where a Realtor cannot represent both buyer and seller but may only act in a customer service capacity and there can be no change in compensation and

A brokerage that is a sole proprietorship may not represent both parties unless it is the sole brokerage within the area.

This is similar to the requirements for lawyers.
I don't think that would solve the problem unless:

- all bidders/buyers are required to personally attend the offer presentation
- all offers are made in person witnessed by all parties involved
- all actual bid amounts should be announced made public, essentially a totally transparent auction style process
-agents should excuse themselves from the bidding process due to conflict of interest, i.e. Even a buyer agent would act against his own client's best interest by urging him to bid high in the hopes of quickly securing his own commission!! Outlawing dual agency would hardly resolve that problem...

How about we eliminate the need for realtors all together? This day and age with comps data easily accessible by all, more & more are searching through sites like realtor.ca, why not reduce our expense and cut the middleman, take our own calls host our own showings, and hold public auction style sales but bid shilling would still present a problem...

- therefore we would need to further verify the background info of each potential bidder to ensure there is no collusion of interest, i.e. no friends or distant family members etc which is impossible to put in practice, renowned auctions houses like Christies can't even manage this level of scrutiny.

So yes this maybe a problem but unfortunately we would just have to live with it...
First of all I was merely joking about the idea that realtors should be abolished in the interest of fairness, knowing your stake in this game I am aware that particular comment wouldn't sit well with you. Winking Face

But I do find your explaination on why bids shouldn't be made public and bid shilling through friends or family members rather disappointing, you merely cited court decisions and civil rights...

Are you suggesting that the sale of the some of the world's most prized possessions worth up to hundreds of $$ millions through famed auction houses like Christies and Sotheby's are entirely flawed?

That somehow a system which the bidders are completely kept in the dark over the most basic concerns of any purchase namely "who is bidding and how much is being bid" in retrospect is far more fair and accurate reflection of the market than a open transparent public auction?

- In an open market auction format, a property starts at a minimum value that a owner would accept, this is what an asking price should mean, then registered verified bidders would submit bids in person incrementally until the last one left standing, how is that a self serving to the buyer only? If this is the case you certainly wouldn't see any seller choose the auction format to sell their multi million dollar works of art and antiquities...
Under the auction system, a house start at $1.5 mil with increments of $25k per bid and 50k per bid above $2mil, the under bidder holds at $1.9 mil, I outbids him and win at $1.95mil fair and square.

- Using the current blackbox, under the shadow method, a house with asking of $1.5 mil, on the day of offer presentation my agent tells me there are 8 interested parties through a conversation with the seller's agent, this info is not personally verified by either me or my agent. Then I am told to bid a "sufficiently" high amount to hopfully beat out the phantom "others", so I bid $1.95 mil which in the previous case would have won me the house already, and the Second, third highest bids remained the same as in our last example 1.9mil & 1.8 mil, but since I have no knowledge of all this, after being told by my own buyer agent that I am amongst the 3 that made the final cut, (buyer agent would push for higher bid from his own client in order to close the deal and earn his commission). he recommends that I make a final push to close the deal, so I upped my offer to 2.1mil, moments later he came back to me saying the seller and his agent are still hesitant to sign off as my offer has a financing condition attached while others don't, the best approached would be to up my offer yet again, I did exactly as asked by my own agent and ended up securing the house at 2.3 mil when I could had it at 1.95, overpaid by $350k should I call this a " rip off"? is the $2.3 mil final price an accurate reflection of the market or the direct result of a collusion of interest between the buyer & seller agents?

Yes it's not rocket science that when people are kept in the dark "rip offs" tend to occur... Outlawing dual agency would only serve agent's interest to ensure a more equal distribution of commissions, while failing to address all the problems I have cited above in my example.

A seller agent representing both ends of a deal is taking both shares of the commission, one of which should have belonged to one of his colleagues the buyer agent, if this is allowed to continue many agents in the current market would find it increasingly difficult to support themselves through their meager earnings, with majority of the commissions ends up in the hands of a few highly successful and well advertised agents who can often find their own buyers through their vast connections...

Just telling it like it is, have nothing against realtors I wish you all the luck, I apologize in advance if I offended you in anyway...
Deal Addict
Oct 29, 2010
4314 posts
664 upvotes
The problem with open market auction format, no 2 bids are the same, even if they both offer the same amount of money.
You may have different closing dates, different conditions, different family circumstances.

If you get offers from 2 families and one "feels" like it's more likely to close the deal while the other one "feel" shaky to you, in your mind they are not equal bids.

I would prefer to have an open system like that but at the same time, how can you level the playing field? Unless of course you're going to list all those parameters out in the open during the auction, let the seller decide if he prefers to get better closing date vs 100k extra money.
Sr. Member
Jul 15, 2003
692 posts
197 upvotes
GTA, Ontario
Afv1234 wrote:
licenced wrote: None of what you suggest will reduce or eliminate the issue here which is that the Realtor is breaking the law by cooking the bids.

Making the bid public is self-serving only to the buyer and that's not how the courts have interpreted free enterprise. The seller of any product has every right to get the most they can for their product and service. Buyers need to understand that and only tend to once the shoe is on the other foot and they're in the seller's seat - all of a sudden they love the idea of blind bidding.

You also by law cannot discriminate in the way you suggest by blocking friends, family members etc. Those are enshrined civil rights.

As for eliminating Realtors, this is not a communist country. Even so, third party fiduciary involvement is intended to and does reduce the rip-off between buyer and seller. Much like the rip-off noted from the sale of items in off topic. The failures are because the charges I noted above aren't in place and also that the industry was allowed to get involved in offering fsbo services where the fall-out from bad deals negotiated strictly between buyer and seller are also now attached to the industry.

Illegal practices will never be eliminated in any service or profession because some people are just intent on being crooks. But the deterrents can be tightened as I've suggested and they will eventually be and will be patterned after the legal industry's change to dual representation.

It's not rocket science.
Afv1234 wrote:

I don't think that would solve the problem unless:

- all bidders/buyers are required to personally attend the offer presentation
- all offers are made in person witnessed by all parties involved
- all actual bid amounts should be announced made public, essentially a totally transparent auction style process
-agents should excuse themselves from the bidding process due to conflict of interest, i.e. Even a buyer agent would act against his own client's best interest by urging him to bid high in the hopes of quickly securing his own commission!! Outlawing dual agency would hardly resolve that problem...

How about we eliminate the need for realtors all together? This day and age with comps data easily accessible by all, more & more are searching through sites like realtor.ca, why not reduce our expense and cut the middleman, take our own calls host our own showings, and hold public auction style sales but bid shilling would still present a problem...

- therefore we would need to further verify the background info of each potential bidder to ensure there is no collusion of interest, i.e. no friends or distant family members etc which is impossible to put in practice, renowned auctions houses like Christies can't even manage this level of scrutiny.

So yes this maybe a problem but unfortunately we would just have to live with it...
First of all I was merely joking about the idea that realtors should be abolished in the interest of fairness, knowing your stake in this game I am aware that particular comment wouldn't sit well with you. Winking Face

But I do find your explaination on why bids shouldn't be made public and bid shilling through friends or family members rather disappointing, you merely cited court decisions and civil rights...

Are you suggesting that the sale of the some of the world's most prized possessions worth up to hundreds of $$ millions through famed auction houses like Christies and Sotheby's are entirely flawed?

That somehow a system which the bidders are completely kept in the dark over the most basic concerns of any purchase namely "who is bidding and how much is being bid" in retrospect is far more fair and accurate reflection of the market than a open transparent public auction?

- In an open market auction format, a property starts at a minimum value that a owner would accept, this is what an asking price should mean, then registered verified bidders would submit bids in person incrementally until the last one left standing, how is that a self serving to the buyer only? If this is the case you certainly wouldn't see any seller choose the auction format to sell their multi million dollar works of art and antiquities...
Under the auction system, a house start at $1.5 mil with increments of $25k per bid and 50k per bid above $2mil, the under bidder holds at $1.9 mil, I outbids him and win at $1.95mil fair and square.

- Using the current blackbox, under the shadow method, a house with asking of $1.5 mil, on the day of offer presentation my agent tells me there are 8 interested parties through a conversation with the seller's agent, this info is not personally verified by either me or my agent. Then I am told to bid a "sufficiently" high amount to hopfully beat out the phantom "others", so I bid $1.95 mil which in the previous case would have won me the house already, and the Second, third highest bids remained the same as in our last example 1.9mil & 1.8 mil, but since I have no knowledge of all this, after being told by my own buyer agent that I am amongst the 3 that made the final cut, (buyer agent would push for higher bid from his own client in order to close the deal and earn his commission). he recommends that I make a final push to close the deal, so I upped my offer to 2.1mil, moments later he came back to me saying the seller and his agent are still hesitant to sign off as my offer has a financing condition attached while others don't, the best approached would be to up my offer yet again, I did exactly as asked by my own agent and ended up securing the house at 2.3 mil when I could had it at 1.95, overpaid by $350k should I call this a " rip off"? is the $2.3 mil final price an accurate reflection of the market or the direct result of a collusion of interest between the buyer & seller agents?

Yes it's not rocket science that when people are kept in the dark "rip offs" tend to occur... Outlawing dual agency would only serve agent's interest to ensure a more equal distribution of commissions, while failing to address all the problems I have cited above in my example.

A seller agent representing both ends of a deal is taking both shares of the commission, one of which should have belonged to one of his colleagues the buyer agent, if this is allowed to continue many agents in the current market would find it increasingly difficult to support themselves through their meager earnings, with majority of the commissions ends up in the hands of a few highly successful and well advertised agents who can often find their own buyers through their vast connections...

Just telling it like it is, have nothing against realtors I wish you all the luck, I apologize in advance if I offended you in anyway...
I do agree that the blackbox bidding is a bad deal for buyers and likely a good deal for sellers. And yes, you cannot have it both ways, you are either the winner or the loser. But as mentioned by flafson, when you have conditions in your offer, it does not translate to how good it is. Let's say that you have an offer for $1 million no conditions, and $1.1 million with conditions, with your open format, it is hard to do an actual comparison because you cannot necessarily say that the $1.1 million offer trumps the $1 million offer. I'm not really sure what a good solution is, but I do agree that as a buyer, not knowing and blindly bidding is a bad deal no matter what happens.

If that is indeed how your process went, I do feel really bad for you and I would understand why you feel annoyed about how things went. I went through the same things TWICE actually. The first time, it was one other bidder, they asked if we would up the offer and we didn't and we still won! How does that work? It made me feel pissed since I felt that it was a game, 'why ask for a better offer if you would accept this anyways?'. My second time, it was three other bidders, first bid, it was returned to everyone and they asked for our final offer, we upped our value a bit and we won. Again, I thought, did I lose this game? I mean, I won the house, but was our initial bid acceptable?

I do feel that if you have a good agent though, they will help you out. Our agent gave their option on things like what the price should be worth, the quality of the materials, any potential issues with the home or location, and many other things (home inspector, mortgage, lawyer, etc). Whether or not you value their opinion is up to you though.
Member
Aug 11, 2016
498 posts
151 upvotes
Dymis wrote:
Afv1234 wrote:
licenced wrote: None of what you suggest will reduce or eliminate the issue here which is that the Realtor is breaking the law by cooking the bids.

Making the bid public is self-serving only to the buyer and that's not how the courts have interpreted free enterprise. The seller of any product has every right to get the most they can for their product and service. Buyers need to understand that and only tend to once the shoe is on the other foot and they're in the seller's seat - all of a sudden they love the idea of blind bidding.

You also by law cannot discriminate in the way you suggest by blocking friends, family members etc. Those are enshrined civil rights.

As for eliminating Realtors, this is not a communist country. Even so, third party fiduciary involvement is intended to and does reduce the rip-off between buyer and seller. Much like the rip-off noted from the sale of items in off topic. The failures are because the charges I noted above aren't in place and also that the industry was allowed to get involved in offering fsbo services where the fall-out from bad deals negotiated strictly between buyer and seller are also now attached to the industry.

Illegal practices will never be eliminated in any service or profession because some people are just intent on being crooks. But the deterrents can be tightened as I've suggested and they will eventually be and will be patterned after the legal industry's change to dual representation.

It's not rocket science.
First of all I was merely joking about the idea that realtors should be abolished in the interest of fairness, knowing your stake in this game I am aware that particular comment wouldn't sit well with you. Winking Face

But I do find your explaination on why bids shouldn't be made public and bid shilling through friends or family members rather disappointing, you merely cited court decisions and civil rights...

Are you suggesting that the sale of the some of the world's most prized possessions worth up to hundreds of $$ millions through famed auction houses like Christies and Sotheby's are entirely flawed?

That somehow a system which the bidders are completely kept in the dark over the most basic concerns of any purchase namely "who is bidding and how much is being bid" in retrospect is far more fair and accurate reflection of the market than a open transparent public auction?

- In an open market auction format, a property starts at a minimum value that a owner would accept, this is what an asking price should mean, then registered verified bidders would submit bids in person incrementally until the last one left standing, how is that a self serving to the buyer only? If this is the case you certainly wouldn't see any seller choose the auction format to sell their multi million dollar works of art and antiquities...
Under the auction system, a house start at $1.5 mil with increments of $25k per bid and 50k per bid above $2mil, the under bidder holds at $1.9 mil, I outbids him and win at $1.95mil fair and square.

- Using the current blackbox, under the shadow method, a house with asking of $1.5 mil, on the day of offer presentation my agent tells me there are 8 interested parties through a conversation with the seller's agent, this info is not personally verified by either me or my agent. Then I am told to bid a "sufficiently" high amount to hopfully beat out the phantom "others", so I bid $1.95 mil which in the previous case would have won me the house already, and the Second, third highest bids remained the same as in our last example 1.9mil & 1.8 mil, but since I have no knowledge of all this, after being told by my own buyer agent that I am amongst the 3 that made the final cut, (buyer agent would push for higher bid from his own client in order to close the deal and earn his commission). he recommends that I make a final push to close the deal, so I upped my offer to 2.1mil, moments later he came back to me saying the seller and his agent are still hesitant to sign off as my offer has a financing condition attached while others don't, the best approached would be to up my offer yet again, I did exactly as asked by my own agent and ended up securing the house at 2.3 mil when I could had it at 1.95, overpaid by $350k should I call this a " rip off"? is the $2.3 mil final price an accurate reflection of the market or the direct result of a collusion of interest between the buyer & seller agents?

Yes it's not rocket science that when people are kept in the dark "rip offs" tend to occur... Outlawing dual agency would only serve agent's interest to ensure a more equal distribution of commissions, while failing to address all the problems I have cited above in my example.

A seller agent representing both ends of a deal is taking both shares of the commission, one of which should have belonged to one of his colleagues the buyer agent, if this is allowed to continue many agents in the current market would find it increasingly difficult to support themselves through their meager earnings, with majority of the commissions ends up in the hands of a few highly successful and well advertised agents who can often find their own buyers through their vast connections...

Just telling it like it is, have nothing against realtors I wish you all the luck, I apologize in advance if I offended you in anyway...
I do agree that the blackbox bidding is a bad deal for buyers and likely a good deal for sellers. And yes, you cannot have it both ways, you are either the winner or the loser. But as mentioned by flafson, when you have conditions in your offer, it does not translate to how good it is. Let's say that you have an offer for $1 million no conditions, and $1.1 million with conditions, with your open format, it is hard to do an actual comparison because you cannot necessarily say that the $1.1 million offer trumps the $1 million offer. I'm not really sure what a good solution is, but I do agree that as a buyer, not knowing and blindly bidding is a bad deal no matter what happens.

If that is indeed how your process went, I do feel really bad for you and I would understand why you feel annoyed about how things went. I went through the same things TWICE actually. The first time, it was one other bidder, they asked if we would up the offer and we didn't and we still won! How does that work? It made me feel pissed since I felt that it was a game, 'why ask for a better offer if you would accept this anyways?'. My second time, it was three other bidders, first bid, it was returned to everyone and they asked for our final offer, we upped our value a bit and we won. Again, I thought, did I lose this game? I mean, I won the house, but was our initial bid acceptable?

I do feel that if you have a good agent though, they will help you out. Our agent gave their option on things like what the price should be worth, the quality of the materials, any potential issues with the home or location, and many other things (home inspector, mortgage, lawyer, etc). Whether or not you value their opinion is up to you though.
I have been on both ends of the trade through my years of RE investing, at this stage of my investment life I would prefer the status quo as blackbox heavily favors the seller. I totally agree with all the points you raised...

However the topic of this thread is the outlawing of dual agency which IMO fails to address any of the problems we have discussed above. Realtors are not running a non for profit charity, regardless of dual or separate agency, just as all of us realtors are in it for the money which could only be realized upon a successful sale therefore collusion of interest is unavoidable, so as in all cases it comes down to a question of individual character & integrity.

"rip offs" can only be prevented if the realtors in question are selfless saints who would willingly give up perfectly closable sales to warn you against overbidding, over leveraging, an over heated market, potential capital loss, point out inferior materials, hidden location problems, crime rates etc, if such realtors exist I doubt they would go far in the industry as it goes against all standing practices of basic marketing. Unfortunately I don't foresee how these ethical problems can ever be resolved...
[OP]
Deal Fanatic
Jul 3, 2011
5768 posts
2932 upvotes
Thornhill
Afv1234 wrote: First of all I was merely joking about the idea that realtors should be abolished in the interest of fairness, knowing your stake in this game I am aware that particular comment wouldn't sit well with you. Winking Face
Okay.
But I do find your explaination on why bids shouldn't be made public and bid shilling through friends or family members rather disappointing, you merely cited court decisions and civil rights...
I merely cited court decisions and civil rights? What that's the lowest metric by which we as a civil society of laws weigh ourselves now? How odd that you'd attack laws and civil rights. Maybe you'd prefer jailhouse justice, or perhaps you were just joking again.
Are you suggesting that the sale of the some of the world's most prized possessions worth up to hundreds of $$ millions through famed auction houses like Christies and Sotheby's are entirely flawed?
You didn't see such a suggestion in my response. What you saw is a factual response. There are two sides here, seller and buyer yet, the argument against the systems in use in this seller market is always from the buyer's point of view as though they're entitled to the opportunity to get the upper hand. They're not. And by the way, auctions for real estate don't favour the buyer either - the seller usually has the right to turn down the highest and best and the buyer is not entitled to the purchase just because they have the highest bid (see below). But, most people don't understand the inherent advantages built into the auction process for the sellers because you're just not entitled to know what you say here:
That somehow a system which the bidders are completely kept in the dark over the most basic concerns of any purchase namely "who is bidding and how much is being bid" in retrospect is far more fair and accurate reflection of the market than a open transparent public auction?

In an open market auction format, a property starts at a minimum value that a owner would accept, this is what an asking price should mean, then registered verified bidders would submit bids in person incrementally until the last one left standing, how is that a self serving to the buyer only? If this is the case you certainly wouldn't see any seller choose the auction format to sell their multi million dollar works of art and antiquities...
This is a simplification of the process. Most real estate auctions will include a reserve price which automatically favours the seller. Additionally, these auctions do not generally permit post auction conditions, ergo, buyers of properties generally have to accept the property as it is. That too favours the seller not the buyer.
- Using the current blackbox, under the shadow method, a house with asking of $1.5 mil, on the day of offer presentation my agent tells me there are 8 interested parties through a conversation with the seller's agent, this info is not personally verified by either me or my agent. Then I am told to bid a "sufficiently" high amount to hopfully beat out the phantom "others", so I bid $1.95 mil which in the previous case would have won me the house already, and the Second, third highest bids remained the same as in our last example 1.9mil & 1.8 mil, but since I have no knowledge of all this, after being told by my own buyer agent that I am amongst the 3 that made the final cut, (buyer agent would push for higher bid from his own client in order to close the deal and earn his commission). he recommends that I make a final push to close the deal, so I upped my offer to 2.1mil, moments later he came back to me saying the seller and his agent are still hesitant to sign off as my offer has a financing condition attached while others don't, the best approached would be to up my offer yet again, I did exactly as asked by my own agent and ended up securing the house at 2.3 mil when I could had it at 1.95, overpaid by $350k should I call this a " rip off"? is the $2.3 mil final price an accurate reflection of the market or the direct result of a collusion of interest between the buyer & seller agents?
And we're back to my post and hence why the legislation should be tightened so that those like you describe here who are breaking the law should be deterred and, my other post which specifically points out the one-sided view that the buyer should be the beneficiary here. In your scenario you're claiming to know your agent is playing you yet you allow yourself to be played. Sorry, consumers are not allowed to abdicate our responsibilities to ourselves when we're fully aware what we're doing - we can't then stand before a judge and claim, 'your honour, I knew he was trying to get me to pay more than was necessary but I went along with it anyway', that defense just won't get anyone anywhere.

You may not like it, but that's the way it is. In a buyer's market, you can write the rules and enjoying watching the sellers complain about how unfair the process is to them.
Yes it's not rocket science that when people are kept in the dark "rip offs" tend to occur...
Then take it up with the justice system. It's common law. They're not going to take away the rights of capitalism in one area to please a select group.
Outlawing dual agency would only serve agent's interest to ensure a more equal distribution of commissions, while failing to address all the problems I have cited above in my example.
You're ill-informed. This is a fiduciary duty. Dual agency negates fiduciary duty and makes it about the Realtor not the client and this is exactly why Ontario's lawyers decided to do away with dual agency - one cannot equally represent both sides in a divorce or both sides in a civil suit. There is no fact whatsoever that it would have any different effect on commission that dual agency would have. Yours is a comment out of ignorance of the process and legislated requirements.
Just telling it like it is, have nothing against realtors I wish you all the luck, I apologize in advance if I offended you in anyway...
You haven't and I am telling it like it is. It's not what buyers or many of my peers would want to hear but it is true and best practices.
Deal Addict
Nov 2, 2014
1065 posts
406 upvotes
Scarborough, ON
licenced wrote: Apparently, an undercover CBC investigation will soon reveal some unethical practices when it comes multiple offers - about time!

The most important take away from this is that it is never a good idea to have the Realtor represent both buyer and seller.

I've said this a hundred times if not more. It doesn't matter how famous they are, how big they are, how important they think they are or how smart they think they are, when anyone, that is seller, buyer or Realtor says it can be handled fairly and without conflict of interest, they're misleading you.





I guess we have to stay tuned for the report.
I agree that a realtor double siding a deal is never a good situation for the buyer or seller to be in.

It will be interesting to see what the investigation will reveal.


On a random side note (I was interested to hear your response), I think you forgot to directly respond to one of Ironcat's posts a few threads back regarding TO Solds being taken down:

"You conveniently skipped the whole point of my post even though it was bolded for you. Let's try again.

If a seller does not consent to having their property sale information available to anyone for privacy concerns, that information should not be available to ANYONE, including other real estate agents and their clients.

Explain to us - if and when someone has withheld or subsequently withdrawn their consent to share their property sale data - why a random real estate agent and his or her clients should still be able to view this information - but nobody else?"
Member
Aug 11, 2016
498 posts
151 upvotes
licenced wrote:
Afv1234 wrote: First of all I was merely joking about the idea that realtors should be abolished in the interest of fairness, knowing your stake in this game I am aware that particular comment wouldn't sit well with you. Winking Face
Okay.
But I do find your explaination on why bids shouldn't be made public and bid shilling through friends or family members rather disappointing, you merely cited court decisions and civil rights...
I merely cited court decisions and civil rights? What that's the lowest metric by which we as a civil society of laws weigh ourselves now? How odd that you'd attack laws and civil rights. Maybe you'd prefer jailhouse justice, or perhaps you were just joking again.
Are you suggesting that the sale of the some of the world's most prized possessions worth up to hundreds of $$ millions through famed auction houses like Christies and Sotheby's are entirely flawed?
You didn't see such a suggestion in my response. What you saw is a factual response. There are two sides here, seller and buyer yet, the argument against the systems in use in this seller market is always from the buyer's point of view as though they're entitled to the opportunity to get the upper hand. They're not. And by the way, auctions for real estate don't favour the buyer either - the seller usually has the right to turn down the highest and best and the buyer is not entitled to the purchase just because they have the highest bid (see below). But, most people don't understand the inherent advantages built into the auction process for the sellers because you're just not entitled to know what you say here:
That somehow a system which the bidders are completely kept in the dark over the most basic concerns of any purchase namely "who is bidding and how much is being bid" in retrospect is far more fair and accurate reflection of the market than a open transparent public auction?

In an open market auction format, a property starts at a minimum value that a owner would accept, this is what an asking price should mean, then registered verified bidders would submit bids in person incrementally until the last one left standing, how is that a self serving to the buyer only? If this is the case you certainly wouldn't see any seller choose the auction format to sell their multi million dollar works of art and antiquities...
This is a simplification of the process. Most real estate auctions will include a reserve price which automatically favours the seller. Additionally, these auctions do not generally permit post auction conditions, ergo, buyers of properties generally have to accept the property as it is. That too favours the seller not the buyer.
- Using the current blackbox, under the shadow method, a house with asking of $1.5 mil, on the day of offer presentation my agent tells me there are 8 interested parties through a conversation with the seller's agent, this info is not personally verified by either me or my agent. Then I am told to bid a "sufficiently" high amount to hopfully beat out the phantom "others", so I bid $1.95 mil which in the previous case would have won me the house already, and the Second, third highest bids remained the same as in our last example 1.9mil & 1.8 mil, but since I have no knowledge of all this, after being told by my own buyer agent that I am amongst the 3 that made the final cut, (buyer agent would push for higher bid from his own client in order to close the deal and earn his commission). he recommends that I make a final push to close the deal, so I upped my offer to 2.1mil, moments later he came back to me saying the seller and his agent are still hesitant to sign off as my offer has a financing condition attached while others don't, the best approached would be to up my offer yet again, I did exactly as asked by my own agent and ended up securing the house at 2.3 mil when I could had it at 1.95, overpaid by $350k should I call this a " rip off"? is the $2.3 mil final price an accurate reflection of the market or the direct result of a collusion of interest between the buyer & seller agents?
And we're back to my post and hence why the legislation should be tightened so that those like you describe here who are breaking the law should be deterred and, my other post which specifically points out the one-sided view that the buyer should be the beneficiary here. In your scenario you're claiming to know your agent is playing you yet you allow yourself to be played. Sorry, consumers are not allowed to abdicate our responsibilities to ourselves when we're fully aware what we're doing - we can't then stand before a judge and claim, 'your honour, I knew he was trying to get me to pay more than was necessary but I went along with it anyway', that defense just won't get anyone anywhere.

You may not like it, but that's the way it is. In a buyer's market, you can write the rules and enjoying watching the sellers complain about how unfair the process is to them.
Yes it's not rocket science that when people are kept in the dark "rip offs" tend to occur...
Then take it up with the justice system. It's common law. They're not going to take away the rights of capitalism in one area to please a select group.
Outlawing dual agency would only serve agent's interest to ensure a more equal distribution of commissions, while failing to address all the problems I have cited above in my example.
You're ill-informed. This is a fiduciary duty. Dual agency negates fiduciary duty and makes it about the Realtor not the client and this is exactly why Ontario's lawyers decided to do away with dual agency - one cannot equally represent both sides in a divorce or both sides in a civil suit. There is no fact whatsoever that it would have any different effect on commission that dual agency would have. Yours is a comment out of ignorance of the process and legislated requirements.

"There is no fact whatsoever that it would have any different effect on commission that dual agency would have. Yours is a comment out of ignorance of the process and legislated requirements. "

Humm... So let me get this straight, please do not side step this simple question, in a dual agency deal does the sole agent involved end up receiving both shares of the commission - buyer and the seller side? Instead of the 4/5% norm, just about every realtor is advertising a discounted total commission rate of 3.5% these days if they can find their own buyer/double end a deal, are you saying this has nothing to do with dual agency?

If dual agency is outlawed is it true that the overall realtor community would directly benefit, as the commissions must be spilted/shared amongst two agents instead of one?

You kept referring to fiduciary duty the problem is in actual practice, such ideals can only be upheld by personal code of ethics and integrity of each individual realtor, it would be ignorant to think otherwise.

Eliminating dual agency would not resolve the collusion of interest that remain between the buying and selling agents, as both are equally as eager to close the deal to achieve their ulimate goal of a commission payout, maybe what we need is a financially uninvolved; unrelated and unbiased third party to oversee and regulate all of this... Like I said I don't believe this problem can ever be solved just way too many factors and conflicting interests involved.
Last edited by Afv1234 on Oct 25th, 2016 5:29 pm, edited 2 times in total.
Penalty Box
Dec 27, 2013
8003 posts
3988 upvotes
Toronto
So basically AFV hit the nail on the head. Everything he has said is spot on, and yet somehow licensed refuses to accept what he has said and brings up random points to defend his position side tracking the real issue.

no one cares about the realtor double ending the deal. That's such a SMALL piece of the problem. Lisened your arguing about the crumbs when AFV is talking about the entire damn pie.
[OP]
Deal Fanatic
Jul 3, 2011
5768 posts
2932 upvotes
Thornhill
Afv1234 wrote: Humm... So let me get this straight, please do not side step this simple question, in a dual agency deal does the sole agent involved end up receiving both shares of the commission - buyer and the seller side? Instead of the 4/5% norm, just about every realtor is advertising a discounted total commission rate of 3.5% these days if they can find their own buyer/double end a deal, are you saying this has nothing to do with dual agency?
Any change in commission is whatever has been negotiated between the seller and brokerage/Realtor and even re-negotiated. Don't try to accuse me of side-stepping the answer because there is no set pre-determined agreement. Dual agency is (albeit very limited and a negation of fiduciary) representing both the buyer and seller, it is not representing the seller while the buyer self-represents. The decision as to whether or not the agreement called for a reduction or it is even decided later to reduce the commission may never be known by the buyer and it is certainly never known by the rest of the real estate industry. As mentioned, far too many times on here, that distinction is service seems to be willfully ignored by some. The listing agreement sets out the rate payable to the listing brokerage it is not automatically adjusted because of dual agency or of buyer self-representation. That is an misrepresentation perpetuated by those ignorant of contract law and the contracted listing agreement.
If dual agency is outlawed is it true that the overall realtor community would directly benefit, as the commissions must be spilted/shared amongst two agents instead of one?
See above. Once again there is no such policy or requirement in place to split commissions more than offering one cent in Ontario or as much as the listing brokerage wants to offer. Where do you get these ideas?
You kept referring to fiduciary duty the problem is in actual practice, such ideals can only be upheld by personal code of ethics and integrity of each individual realtor, it would be ignorant to think otherwise.
My concern which you and few others consistently seem to be fighting me on is that when I speak to toughening regulations for Realtors, as I have here, or speaking to tougher penalties for those who break it, you would prefer to actually argue the opposite. Fine, argue for the furtherance of those who would take advantage of you as you suggested one did but don't then complain that they doing it as you're also actually arguing. Fiduciary duty is a legal requirement only partly based on ethics. Ethics is morally engrained by degrees. No person lacking ethics will perform their required fiduciary duty and similarly not all who carry out their fiduciary duty will do it to the same degree of ethics as the next person.
Eliminating dual agency would not resolve the collusion of interest that remain between the buying and selling agents, as both are equally as eager to close the deal to achieve their ulimate goal of a commission payout, maybe what we need is a financially uninvolved; unrelated and unbiased third party to oversee and regulate all of this... Like I said I don't believe this problem can ever be solved just way too many factors and conflicting interests involved.
First of all, it resolves the collusion between the sole Realtor in the transaction and themself - that is the only definition of dual-agency to which you refer and secondly, the listing agent is the listing agent, the buying agent is always the one who is the selling agent. I do believe the formert was made clear in my post, and where I specifically said crookedness cannot be eliminated in any service of profession so I don't know why you venture off-topic with this.

And frankly, your blanket statement that both are equally eager to close the deal is not true. Maybe it apples to those Realtors who you know were out to screw you but you chose to use them anyway (and chances are there was a quid pro quo in it for you) does not mean everyone is. I am not and I know of a couple other Realtors on this site who will also ensure their client's interest are all that matter.
Last edited by licenced on Oct 25th, 2016 6:55 pm, edited 1 time in total.
[OP]
Deal Fanatic
Jul 3, 2011
5768 posts
2932 upvotes
Thornhill
RobertSmalls008 wrote: I agree that a realtor double siding a deal is never a good situation for the buyer or seller to be in...

On a random side note (I was interested to hear your response), I think you forgot to directly respond to one of Ironcat's posts a few threads back regarding TO Solds being taken down:
Forgive me for not hanging on your every post.
You conveniently skipped the whole point of my post even though it was bolded for you. Let's try again.

If a seller does not consent to having their property sale information available to anyone for privacy concerns, that information should not be available to ANYONE, including other real estate agents and their clients.
Correct as it applies to the MLS system.
Explain to us - if and when someone has withheld or subsequently withdrawn their consent to share their property sale data - why a random real estate agent and his or her clients should still be able to view this information - but nobody else?"
They cannot. If they demand the information be removed it has to be removed in accordance with the Privacy laws of this country and is therefore not viewable. I know for a fact there have been instances of this.
Member
Aug 11, 2016
498 posts
151 upvotes
licenced wrote:
Afv1234 wrote: Humm... So let me get this straight, please do not side step this simple question, in a dual agency deal does the sole agent involved end up receiving both shares of the commission - buyer and the seller side? Instead of the 4/5% norm, just about every realtor is advertising a discounted total commission rate of 3.5% these days if they can find their own buyer/double end a deal, are you saying this has nothing to do with dual agency?
Any change in commission is whatever has been negotiated between the seller and brokerage/Realtor and even re-negotiated. Don't try to accuse me of side-stepping the answer because there is no set pre-determined agreement. Dual agency is (albeit very limited and a negation of fiduciary) representing both the buyer and seller, it is not representing the seller while the buyer self-represents. The decision as to whether or not the agreement called for a reduction or it is even decided later to reduce the commission may never be known by the buyer and it is certainly never known by the rest of the real estate industry. As mentioned, far too many times on here, that distinction is service seems to be willfully ignored by some. The listing agreement sets out the rate payable to the listing brokerage it is not automatically adjusted because of dual agency or of buyer self-representation. That is an misrepresentation perpetuated by those ignorant of contract law and the contracted listing agreement.
If dual agency is outlawed is it true that the overall realtor community would directly benefit, as the commissions must be spilted/shared amongst two agents instead of one?
See above. Once again there is no such policy or requirement in place to split commissions more than offering one cent in Ontario or as much as the listing brokerage wants to offer. Where do you get these ideas?
You kept referring to fiduciary duty the problem is in actual practice, such ideals can only be upheld by personal code of ethics and integrity of each individual realtor, it would be ignorant to think otherwise.
My concern which you and few others consistently seem to be fighting me on is that when I speak to toughening regulations for Realtors, as I have here, or speaking to tougher penalties for those who break it, you would prefer to actually argue the opposite. Fine, argue for the furtherance of those who would take advantage of you as you suggested one did but don't then complain that they doing it as you're also actually arguing. Fiduciary duty is a legal requirement only partly based on ethics. Ethics is morally engrained by degrees. No person lacking ethics will perform their required fiduciary duty and similarly not all who carry out their fiduciary duty will do it to the same degree of ethics as the next person.
Eliminating dual agency would not resolve the collusion of interest that remain between the buying and selling agents, as both are equally as eager to close the deal to achieve their ulimate goal of a commission payout, maybe what we need is a financially uninvolved; unrelated and unbiased third party to oversee and regulate all of this... Like I said I don't believe this problem can ever be solved just way too many factors and conflicting interests involved.
First of all, it resolves the collusion between the sole Realtor in the transaction and themself - that is the only definition of dual-agency to which you refer and secondly, the listing agent is the listing agent, the buying agent is always the one who is the selling agent. I do believe the formert was made clear in my post, and where I specifically said crookedness cannot be eliminated in any service of profession so I don't know why you venture off-topic with this.

And frankly, your blanket statement that both are equally eager to close the deal is not true. Maybe it apples to those Realtors who you know were out to screw you but you chose to use them anyway (and chances are there was a quid pro quo in it for you) does not mean everyone is. I am not and I know of a couple other Realtors on this site who will also ensure their client's interest are all that matter.
Wow long winded response yet lacking any real substance, I merely wanted to find out whether realtors has a lot to gain from keeping the dual agency alive, conversely to those opposed what do they stand to gain? obviously under dual agency more agents in the industry were left out of the action.

So after whole lot of nothings... At the risk of being called ignorant again, I had to find my own answers online...

"Some agents will tell you dual-agency is more efficient and effective. Having just one agent as point-of-contact can expedite a sale. Obviously, the real estate dual-agent has a lot to gain from the transaction: The seller typically pays 5 percent of the sale price as commission, which is split between the listing broker and selling broker. Clearly, some agents will be motivated to represent both sides of the transaction and earn the entire commission. In a dual-agency scenario, there is a concern the agent might encourage the seller to accept a lower price for a home to get the double commission.

Researchers analyzed sales in In a tight housing market, with buyers facing bidding-wars, some buyers are incentivizing agents by offering them the opportunity to represent them as well as the seller. Buyers presume that this will motivate the agent to promote their offer.
However, there is recent data that shows a buyer pays about $5,000 extra when buying a home with a dual-agent. While a dual-agency arrangement may appear to give a buyer the edge in some circumstances, I advise a homebuyer to avoid dual-agency if at all possible. "

Wish you had said the same... Instead making wild references that somehow, one min I am being victimized by realtors that are out to screw me, the next min I am just as despicable intentionally use shady realtors for a "quid pro quo" gain. What I presented earlier were were mere examples, never had any bad experiences with a realtor except maybe now... Winking FaceWinking Face

thank you for your time....
[OP]
Deal Fanatic
Jul 3, 2011
5768 posts
2932 upvotes
Thornhill
Afv1234 wrote: Wow long winded response yet lacking any real substance, I merely wanted to find out whether realtors has a lot to gain from keeping the dual agency alive, conversely to those opposed what do they stand to gain? obviously under dual agency more agents in the industry were left out of the action....

However, there is recent data that shows a buyer pays about $5,000 extra when buying a home with a dual-agent. While a dual-agency arrangement may appear to give a buyer the edge in some circumstances, I advise a homebuyer to avoid dual-agency if at all possible. "

Wish you had said the same... Instead making wild references
Yours was a long winded number of questions. If you wanted a tweet in response say so. Problem is, when it comes to contracts your tweet style anything will land you at the wrong end of the stick. Deal with it!

There are some people who are just obstinate, will never look to engage in dialogue and just plain hostile to the industry. You are one such. I gave you answers. They were honest, indisputable answers but you decided you wanted to pretend you were smart.

Like it or not, I am for the consumer. And if you don't like that I am for the consumer, deal with that too! I'm not here to agree with your flawed and selfish views as to how the real estate market or the industry should work. If you ever really want to learn anything about what the consumer should know, you'll heed my posts, if you don't you'll beback complaining about yet another who took advantage of you - willingly!

over and out

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