Opinion | March 23, 2010

Here is yet another insider’s look at the ever-changing real estate industry.

It’s a story with a large fork in the road, and a path that I went down willfully.

I can’t help but wonder how often the other path may be traveled…


I often find that many buyers and sellers are confused as to the actual definition of “Multiple Representation.”  Or as it is also called, “Dual Agency.”

Buyers and sellers recognize that a dual agency situation occurs when the listing agent for a given property also has a buyer in the transaction.  If one agent represents both buyer and seller, a dual agency situation is formed.

But what some buyers and sellers don’t realize is that if two members of any one brokerage are involved in the same transaction, representing buyer and seller respectively, then the transaction is also dual agency.

That’s right – if I have a buyer for a property that is listed by another agent at Bosley Real Estate, it’s dual agency!

A couple of weeks ago, I had a listing in the west end.

The property attracted multiple offers, and I found myself in a dual agency situation.

I was working the open house for the property, and a man named “Jonas” walked through the door.

He seemed like a decent guy; very aggressive and very knowledgeable.

Jonas took down my information and called me first-thing on the subsequent Monday morning.  He asked me about the level of interest in the property and I told him that it was “substantial.”

The property was accurately priced at $299,000, in my mind, at least, but if the interest was any indication, I would have speculated that it would sell for a $15,000 premium.

Offers were being reviewed that Thursday, and on Wednesday afternoon, Jonas called me to say that he would like to submit an offer.  I told him that unless he was the only offer, I would have to refer him to a colleague so that he/she could present his offer.

It would be very unfair, and very unethical, for me to present my own offer to my own sellers!

I don’t know how it works at other brokerages, but at Bosley Real Estate, where our entire management team has held every position there is to hold in organized real estate (three TREB Presidents, two OREA Presidents, two CREA Presidents), we do everything by the book, and we always err on the side of caution and fairness.

I enlisted my colleague, “Jennifer,” to present Jonas’ offer.

On that very interesting Thursday eve, there were six offers.

Jennifer dealt with Jonas as I had instructed her to, and Jonas didn’t touch base with me during the day, as I told him he shouldn’t.

I sat with my sellers in the living room of their condo, and one after one, the six agents came into the room and presented their offers.  One of these agents, of course, was Jennifer.

Seeing the offer that Jennifer presented was the first time I had seen Jonas’ name on paper, and the first time I had any idea what price he would be offering.

I discussed the six offers with my seller, and we decided to work with the top two offers and send the other four agents home.  The top two offers were only $900 apart, and about $10,000 higher than the next highest.

We sent the two agents back, one of which was Jennifer.

A half hour later, I received a phone call from Jonas.  I was shocked to see his name on my call display!  I specifically told him that he had to deal with Jennifer as I was dealing with my sellers.

I answered the phone with a bit of a “Hellooooooo?”  Note the question mark…

Jonas immediately responded, “So how are we lookin’?”

I suppose he figured that I was going to tell him all about the offer process thus far.

I told Jonas that he should direct all his questions to Jennifer, and he said, “Oh come on, you can cut that crap out now.  There’s two offers in play and I’m one of them, so just tell me what the other guy comes back at and I’ll beat it.”

From the hallway in this west end condo, I stood and shook my head.  I already knew how this was going to end.

I told Jonas that I couldn’t do what he was asking, as it was unethical and it would violate countless rules.

Then he said what I knew would be coming eventually: “Pretend for two seconds that you don’t wanna make two commissions tonight.”

Jonas didn’t know me at all.

Folks, I’m in this business for the long haul.

There are now almost 30,000 Realtors in the GTA, and if the real estate industry ever gets the enema we’re told is on the horizon, I plan on being one of the 10,000 – 15,000 agents left when all is said and done.

Maybe there are some Realtors who chase one commission after the next, but I firmly believe in building a business and a solid reputation over time.

I told Jonas that there was no way I could tell him the terms of the other offer.

He asked why, and I simply said, “Because I have integrity.”

Jonas said, “Yeah well your @#$% integrity just cost you eight grand tonight, bud,” and he hung up the phone.

He said something rude to Jennifer, and then he sailed off into the night.

My sellers accepted the other offer (which came back $3,500 higher), and they were quite pleased.

But I began to question my actions; not as to whether or not they were right or wrong, but as to whether they represented the road less traveled.

I wondered what other agents might have done in that situation.

I work hard for my clients, and I am a very aggressive agent.  I’m a good negotiator, I’m incredibly knowledgeable about the market and the thousands of condominiums and residential neighbourhoods in it, and my marketing and advertising of properties is second to none.

But if anybody out there thinks that I’m going to violate the RECO Code of Ethics or the Real Estate and Business Brokers Act, then they should seek other representation.

There are some grey areas in real estate, and while I don’t seek to exploit them, I certainly aim to take advantage of a good situation.

But there is no deal, commission, client, or property worth breaking the rules for.

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  1. dogbiskit

    at 7:27 am

    You did the right thing. Suffering the consequences of breaking the violations and Act is not worth $8,000. Many industries are rife with mediocrity and ethically/morally bankrupt professionals. Don’t be one of them.

  2. earth mother

    at 8:28 am

    I completely agree that integrity will stand the test of time… you can never go wrong by taking the high road! As for the Jonas’ taunt that ‘you just lost eight grand’, I hope he tells this story at every social & business gathering and spreads the word that you have integrity.

  3. Smith

    at 11:42 am

    We bought our condo from a realtor in Bosley about a year ago, with dual agency situation – we were the only offer. We felt the process went very well! A manager was present in the formalization of our relationship with the Realtor.

    Integrity matters…

  4. johnny chase

    at 11:53 am

    Dave: Here’s my question…. If Jennifer got the deal done, are you saying that you wouldn’t have participated in the selling fee at all? In other words “Jennifer” would receive the entire 2.5%? She wouldn’t include you on another deal as payback later on? Must be nice to be Jennifer.

  5. David Fleming

    at 12:40 pm

    @ Johnny Chase

    First of all, great tag name!

    As for the commission, it all depends on the agents and the arrangements they have. Every agent is different. Since both clients were mine – Jonas and the seller, I would be looking at two commissions. My arrangement with Jennifer could be one of the following:
    1) a 25% referral fee
    2) a flat rate favour fee, ie. $500 to present the offer
    3) a pay-you-later favour

    Every agent is different, but I don’t think any agent would give a colleague the full 2.5% commission just to present an offer for an hour. If they did, that would be really sweet!

    But this is where the potential conflict of interest can arise. Consider that if both clients are mine, and I’m receiving both commissions, then some people might argue that whether or not I have Jennifer present my offer, I’m still in a precarious position.

    Just take my word for it.

    I work for Bosley Real Estate because they have the best name and reputation in the business. We’re a family company that has been around for 80+ years and where every President, VP, Manager has held positions on boards throughout Canada. We go out of our way to ensure that integrity and accountability are the highest priorities.

  6. Terry Coleman

    at 1:09 pm

    Excellent article and I agree 100% on how you handled it David. This was a great read on a real life experience regarding “Multiple Representation”. This has further clarified how to properly handle this situation for myself in the future as I am currently enrolled in Course 3 and training to obtain my Real Estate licence.

    Thanks David and looking forward to more articles from you.



  7. David Fleming

    at 3:56 pm

    @ Geoff

    I see your point, but as I said before – you’d have to take my word for it. In some cases, perhaps experience does not equal accountability. But I believe that in my company, it does.

    Both Ann Bosley & Tom Bosley (not to be confused with the actor from Happy Days) have served as President of the Toronto Real Estate Board and the Canadian Real Estate Association. Our office manager, Maureen O’Neill, just finished a term as the President of TREB and now serves as a Director at OREA. Our other office manager, Elsie Falconer, was a broker/owner of a very well known real estate firm throughout the 80’s and 90’s.

    Our management team and ownership is the best in the business. I can’t imagine a more experienced team of people leading a real estate brokerage.

    With new real estate brokerages popping up across the GTA every day, it becomes all the more important to have an experienced mangement/ownership team like ours to wade through the brisk waters of a changing industry.

  8. Duff

    at 11:55 pm

    Making someone pay an extra 3,500 bidding against someone that had pulled of the bidding out shows integrity, how?

    And if your going to answer ‘I had to get my client the most money’, then going with Jonas’ deal would have netted the client more.

    Point being you’ve aligned yourself in an arbitrary spot on the integrity scale, and decide that that’s the best spot. But it’s all a grey area no matter what you do.

    You’re not worse, but your not better either, than any other random realtor.

    Get over yourself.

  9. Geoff

    at 12:25 pm

    @ Duff – how exactly did David MAKE someone pay an extra $3,500? Did I miss the part where he held a gun at someone’s head? He can only be accountable for what he did in this situation, not what the other person chose to do. If the other buyer had walked away, you wouldn’t have said he made him do so either.

  10. David Fleming

    at 1:36 pm

    @ Duff & Geoff

    I see Duff’s point. The other day, I wrote about a multiple offer situation where I told the agents, “One shot deal, highest offer takes it.” I was true to my word, and we accepted an offer that was $3,800 higher than the next highest, whereas most agents would have sent them back.

    As an agent, if you tell people, “One shot deal,” you have to stick to it! Your reputation and integrity is at stake.

    With this latest example, my client told me she wanted to “see what happens,” so I left the door open for a chance that we’d send 2-3 offers back if they were close.

    Let me tell you – $900 is CLOSE! I sent everybody home except the top two; I didn’t gouge anybody for money by sending all the buyers back. We just gave the top two a chance to improve or not. If I’m working with a buyer, sometimes we just stick to our price.

    If you really want an exact timeline of events, I’ll tell you that I had the offer with the extra $3,500 in hand by the time Jonas called me and asked me to tell him the price. He waited until the last second because he wanted me to “help” him out.

    In the end, the buyer who paid an extra $3,500 was more than happy to have done so.

  11. Mike

    at 10:00 am

    Nice David !

    It actually does show integrity, and to duff’s point David has to follow the instructions of his seller..if the seller says tell them to come back with a better offer, then so be it..

    as far as the competition bureau and MLS, i would love for someone to tell me why a system that was built, paid for and run by realtors should just be given away?

    there are all kinds of ways to sell your home without a realtor and without MLS, dont want to deal with a realtor, dont put it on MLS then, try craigslist, kijiji, ebay

    does have to open up there site to competitors so that they dont dominate online sales?

  12. Dave

    at 2:09 pm


    Originally just about everything in Canada was funded and built via private interests. All manner of Roads, hospitals, train tracks. etc.
    But ultimately in our system of socialized captitalism, private interests are beholden to what is in the public best interests.

    I have not expertise in answering the specifics of your question. However, I’d direct you to our neighbours to the south who went through the same thing several years ago. If those rapid anti-socialists did it, then why haven’t we?

  13. Dr. P. T. Tzurkov

    at 2:56 pm

    You did the right thing…Business is business, buyer beware and other sayings remains true, and as you admit, there are grey areas in the practice of real estate…But this area was not gray area.

    Also, there are more practical considerations -say you ‘bent the rules”, and then say something went wrong, it sounds like this particular buyer who has a volatile personality would be the first person screaming on the phone to whoever would listen that he wanted it known that you broke a major rule for him…

    Like when I bought my son a 2009 Cadillac Escalade w/custom connelly leather interior. He purchased 26 inch wheels from a place that does not install them…he got the employee to help him install the wheels as a favour. One wheel was severly scratched in the process, rendered valuless…My son says “you’ll need to replace that.” Guy says “Come on man, I was doing you a favour, I’m not supposed to do installs” My Son says “I appreciate that but these are $8,000 wheels, was your favour worth $2,000?” They came to blows and my son hit him with a tire iron and he had to sell his car to pay for that wheel. Tough lesson learned.

  14. Aguduser

    at 12:15 pm


    Have you ever had two clients who are interested in the same property? What would you do in that case?

  15. David Fleming

    at 1:20 pm

    @ Aguduser

    Yes, this has happened 2-3 times in my career.

    This is the most difficult dual agency situation that can arise, and there is only one way to handle it – refer the business to colleague.

    You can’t advise two buyers what to do on the same property, so right when it becomes known that the two buyers want to offer, you’d have to give one to a colleague and work out a referral agreement with that colleague.

    I always work with the buyer with whom I have had the longest relationship.

  16. David Fleming

    at 1:29 pm

    @ Aguduser

    I should also add that full disclosure MUST be made to both buyers.

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