Sure, real estate CAN be a dirty business, but it isn’t always.

Many if not most of our membership are straight shooters who play by the rules and seek to promote integrity and honesty.

However, there are some Realtors out there that make their own rules, and the following account is an extremely common example…

Not every Realtor in the city works for a “big” brokerage.

Not every Realtor in the city works for a “good” brokerage.

Not every Realtor in the city is an honest Realtor…

I often take pot-shots at other brokerages, named or unnamed, because of their underhanded tactics or their lack of honest dealings within the industry.  As long as there are Realtors, there will always be those who play by a separate set of rules.

And when I encounter a property that is listed by a less-than-stellar brokerage and Realtor, I usually accept the fact that I’ll have to proceed with a different course of action than I normally would.

A client of mine became interested in an investment property on Ossington Avenue, which happened to be listed by Up East Realty.  Clearly that is not the brokerage’s name, but it’s close…

Right off the bat, I could tell that the agent was somewhat shady, and it didn’t help matters that the brokerage had one employee who was responsible for coordinating all the appointments – most of which were messed up.

There was a set offer date for this property, which was a Monday, and after spending a week going over the income and expenses for the property, photos and videos we had taken, and speaking with our mortgage broker, we decided to proceed with an offer.

We were expecting multiple offers.

The “common scenario” I alluded to above is this: what if the listing agent for the property has their own offer?

What I mean by this is – if David Fleming is the listing agent for 123 Jones Avenue and is working for the seller, what if David Fleming also has a buyer for the property as well?

If he sells the property to his own buyer, then he “double-ends” the property and receives double the commission.

This is called a “dual agency” situation, but that’s not what I want to focus on.

If there are multiple offers, and the listing agent has their own offer, what steps should be taken?

Let’s say that 123 Jones Avenue is listed at $499,000, and there are six offers – one from Re/Max, one from Royal Lepage, one from Chestnut Park, one from Century 21, and of course one from the listing agent him or herself.

Clearly, the listing agent could gain an advantage for her buyer by looking at all the offers and advising her buyer accordingly.

If the offers are $495,000, $505,000, $512,000, $515,000, and $532,750 respectively, what’s to stop the listing agent from looking at the five competing offers, and then going back to her buyer-client and telling them to offer $535,000?

Um, how about ethics?

Rules, regulations, laws, principles, procedures, guidelines, and ethics.

Here is how we handle this situation at Bosley Real Estate.

If I had a buyer under contract who is submitting an offer on a property which I have listed, I would call in a manager.

I might call in Ann Bosley, who in addition to being our company Vice-President is also the past president of the Canadian Real Estate Association.  All parties would feel safe knowing that Ann is involved.

Ann would sit with my sellers, and review all the offers in my stead.  I would come into the room and present the offer from my buyer-client, all the while not knowing any of the details of the five competing offers.

Essentially, Ann becomes the defacto listing agent on my behalf, and I present to my own sellers as if I’m representing my buyer, which I am.

Ann would then guide and advise my sellers accordingly as if she was their agent.

That’s fair, right?

So what happens at Up East Realty?  Well, I would assume that the listing agent simply yells, “Whooopie!  I’m about to double-end this property!”  And eventually, the listing agent goes to the bank to cash a huge cheque.

Forgive my cynicism, but I would NEVER trust the listing agent at some chop-shop brokerage to play fair.

If there are five competing offers, and the listing agent has her own offer, I guarantee she wouldn’t think twice about reading through the offers and then telling her buyer what the highest offer is.

What does she have to gain?  Well, on a $1,000,000 property where she would make $25,000 as the listing agent, she would make another $25,000 as the cooperating agent.

Would YOU cheat for $25,000?

Agents in my office, and many other excellent brokerages are trying to build their names and reputations for the long-term and would never think of “cheating” for financial gain.  Oh – and I should mention that we’d get FIRED if we did that!

At Up East Realty, I’m sure they would be given a medal.

So back to the property on Ossington for a moment.

Offers were set to be reviewed on a Monday, and the listing agent was pounding the pavement from 1-5PM on Saturday and Sunday trying to solicit interest and of course, her own offer.

So it came as no surprise to me when on Monday morning – the day of offers, at about 9:15AM, she changed the MLS listing to read, “Offers reviewed on Thursday, September 17th at 6PM.  Please register by 3PM.”

Why would she change the offer date?

Because she wasn’t successful in soliciting her own offer!

She was buying herself more time to try and sell the property herself and thus “double-end” it.

She probably figured that the people who came in to the open house on Saturday and Sunday might need a few days to warm up to the idea of submitting an offer.  So why not move the offer date back?

This gives her another four days to try and get her own offer, and I’m sure if she didn’t have one by then, she could always move the date back once more.

It sort of begs the question – what is the seller doing during all this?

Maybe the listing agent has Power of Attorney, or maybe the seller trusts her emphatically.

I didn’t trust her from the moment I met her; from the moment she shook my hand wearing white gloves in the middle of a hot summer day, reminiscent of Miss White from the 80’s movie Clue!

So what can I do?  What are my options to try and protect my seller?

I can have my mommy call her mommy, and by that I mean I can have my broker call her broker.  My broker could always ask, “What’s the process you have in place for reviewing multiple offers when your agent has her own offer?”  I’m sure the broker would lie, or simply hang up the phone, so it’s not like we do have any recourse.  But it’s good to document all the steps along the way just in case you feel like taking that other agent and broker to the Real Estate Council of Ontario‘s ethics committee.

I was honest with my buyer for Ossington Ave – I told him flat out, “If she has her own offer, we’re finished.  It’s that simple.”

I’m not pessimistic, I’m just realistic.  If she was half her weight in gold, she would be working for a better company.  She’s going to lie, cheat, and steal her way to as much money as she can.  She’s not worried about building a business (she’s 55 years old anyways) but rather she’s concerned with immediate cash flows through transactions, legitamite or otherwise.

Sad but true.

Even worse – it happens all the time, you just don’t hear about it.

Well, that is, if I don’t happen to write about it openly on my blog…