Buyers & Sellers Beware| Top 10 Tricks Used by Realtors in Ontario!
1- A Buyer Agent may ask you to sign a Buyer Representation Agreement (BRA) Form 300 or Customer Service Agreement (CSA) Form 310 for six months.
– Advice: Both the BRA or CSA are highly recommended by RECO, and any buyer agent worth his salt will ask you to sign either of the two. You however need to understand that it is better to sign up for a shorter term rather than a longer term because these agreements are particularly hard to get out of once signed, and cannot be terminated from one side. It has to be terminated mutually Form 301, and you are legally constrained from working with other agents until this agreement has been mutually dissolved. Even after dissolution, your previous buyer agent is still entitled to ask for his commission. As much as you can, aim for short term agreements rather than long ones.
2- A Buyer Agent may promise you a rebate or cash back if you buy through him.
– Advice: To make sure you are fully protected and that the buyer agent will not renege on his promise, ask him to write the rebate or cash back in the buyer agreement schedule “A” Form 303, stating when it’s going to be paid. Most co-operating brokerages get their commission cheque within 3-4 weeks from closing date, so you should ideally also be getting your rebate cheque as soon as the buying agent gets the commission cheque. Because many agents experience cash flow problems, this is not always the case, so it is recommended that you get the cheque directly from the brokerage. This way, you are protected from any undue delay.
3- A Buyer Agent says that the listing agent told him there are multiple offers are registered on the property you are bidding on.
– Advice: While RECO has imposed Form 801 on all buyer agents at the time of offer presentation to eliminate the possibility of fake multiple offers, this is still rampant as it depends heavily on the agents’ code of ethics as per industry standard. Most buying agents register their offers by calling the listing brokerage. The phone registration has to be done after the buyer client signs the offer along with Form 801 in hand. Unfortunately, the regulator hasn’t developed any more secure tools to eliminate this issue as of now.
4- A Buyer Agent may promise to send you all sold comparisons available in the area.
– Advice: As of now, RECO doesn’t release sold data to the public, and some of buyer agents may take advantage of this loophole to have easy deals. The good news though is that a recent court order has necessitated RECO& TREB to release the sold data for properties.
5- A Buyer Agent (and even a Listing Agent) may want to bamboozle you by claiming to work for a big brokerage agency and well know brand name to lull you into a false state of security and safety.
– Advice: It all comes down to the honesty and ethics of the particular agent you are working with. It doesn’t matter how big or how well known a brokerage agency is, if the agent you are working with is unscrupulous. Under Ontario brokerage laws, agents are self-employed individuals who work for themselves, whether under the umbrella of a big and well-known brokerage firm or not. All brokerages licensed to trade in real estate in Ontario and maintain a Real Estate Trust account in chartered bank and subject to auditing by RECO. You may want to visit RECO’s website to find out the offenses committed by agents and brokerages on monthly basis in order to better understand whom you may deal with. Sometimes the agents maintain a Google Review posted by their past clients. And few brokerages maintain a Better Business Bureau (BBB) rating in the industry.
6- A Buyer Agent may claim that he can guarantee allocation of specific units from pre-construction condo project prior to launch against advance fees paid by the buyer into his personal account or in cash.
– Advice: While many real estate agents claims that they have an exclusive VIP or Platinum access to pre-construction condo projects, very few developers may provide this, however the majority of the developers in the market send an open invitation to all licensed agents in Ontario to attend the VIP launch few weeks prior to public event in order to give the opportunity to those agents to leverage their clients networks and work on digital and social media marketing campaigns. Don’t be miss-leaded by some websites posted by agent’s sounds to be the project website. It’s created by agents to fish for visitors browsing online looking for the project. Always refer to the project official website and read the disclaimer at the bottom of the page to know the ownership of the site. Developers offer no discount if the client deals directly without agent, however it’s always recommended having one representing you since there is no difference in the price. RECO has issued a warning for those agents are charging their clients advance fees paid directly to them not to the brokerage.
7- A Listing Agent may knock on your door or call you on phone out of the blue to tell you he can help you sell your property at a very good price and that he’s got a buyer for it. More often than not, he will quote you a price that is above the market price and will want to pressure you to sign a listing agreement for six months Form 200.
– Advice: If you really desire to sell your property, you will need to request that the agent bring his buyer client and sign a Form 202 in order to secure the buyer agent commission as agreed. Do not take what the buyer agent says at face value because he has the obligation to represent the buyer’s interests. Rather, you might want to hire your own listing agent who will represent your interests. Have this listing agent get you an update on your property’s Comparative Market Analysis (CMA) report before talking to a buyer agent. Its worth to say that door to door sales practice is ban in Ontario for most of the sales activities; however the Realtors are still do so as per the bill passed last year.
8- A Listing Agent may pressure you to sign the Listing Agreement Form 200 for six months, with the proviso that you can cancel it anytime you want.
– Advice: While a listing agreement can be signed for any term, MLS rules states that the term must be no less than 60 days. As a property owner, you must be very wary of Suspending Listing Agreement Form 241 because suspension of listing Form is somewhat like temporary cancelation. The best thing you can do to protect yourself is to sign a Termination of Listing Agreement Form 214, as this gives you the legal freedom to list your property with another brokerage, the very next day if you so wish. Also be wary of signing on longer holdover periods.
9- A Listing Agent may charge you just a few hundred dollars to list your property with him.
– Advice: Ask the listing agent upfront what services you will be getting with the listing fee. Let him specify in a written in Schedule “A” Form 203 of the Listing Agreement what kind of service is provided. Most listing agents that pressure property owners to list their properties with a few bucks usually provide very limited services or a mere posting only service on MLS. More often than not, they don’t offer in-depth services such as showing appointments management, offer handling and negotiation, open house, for sale post sign, professional photographing, and marketing.
10- A Listing Agent might ask you to sign an exclusive listing because he has a buyer for you and wants to secure his commission.
– Advice: You need to know that there is no real difference between an Exclusive Listing Agreement and a regular Listing Agreement with the exception of the fact that an exclusive listing will not be posted on MLS. To protect yourself, have the agent claiming to have a buyer bring his buyer and sign Form 202. This will secure the buyer agent commission, as well as protect you and your property. It is highly recommended to have your own listing agent so as to know the recent sold data for properties in your neighborhood, as they are not available to the public. What more, it is a conflict of interest for a buyer agent to do so.
11- A Listing Agent that you meet at an open house event may ask to be your buyer agent, offering you a good deal on the listed property on open house.
– Advice: This is nothing but a double ended practice. While not illegal, it is unscrupulous and deceitful and represents a conflict of interest as the listing agent represents both seller and buyer at the same time. There is a move to make such practice illegal in Ontario in the very near future. You should also know that a listing agent promising you to secure a good deal for you in multiple offer situation is totally against industry code of ethics as the listing agent who is acting for buyer and seller should not disclose any of the competing offers details. A behavior such as this was caught on CBC hidden camera in 2016 and reported to RECO.
12- A Listing Agent may promise to sell your property in as little as a few days while promising to get you the highest price possible. He may ask you to check his records to validate his claims.
– Advice: All straight shooting Listing agents should present the Comparative Market Analysis (CMA) in order to support that your property can really sell at a certain price, providing you with analysis of proper price adjustments. This should be done at the time of listing presentation, and definitely not after signing the listing agreement. To be safe, always interview more than one listing agent and ask them to provide you with CMA and other necessary documents before you decide what listing agent to use. Ask each of them to provide you with their marketing strategy, terms of agreement and total costs of selling (including an estimate of unforeseen expenses). More often than not, a piece of property will sell in due time, depending on the market situation. For sellers, the market may seem to go faster while it may seem to take a little more time for buyers. Always make sure to ask for inventory stats for your property class in the market, and recognize that both the flat fee and commission fee method work but that each has different service and costs.
13- Listing agent says: I will sell your house guaranteed in 60-90 days or will buy it from you.
– Advice: This is a very high level trick used by experienced agents in the market, so the agent will put down on the paper that the house will be sold in 60-90 days, if not the agent will buy it back guaranteed, in fact this is an assignment sale means the purchase will be for lower price including the agent commission and will be sold to one of the agent’s investor networks for buyer benefits not seller unfortunately.
Please note that it is not PPS Realty’s intention to offend or accuse any legitimate and trustworthy brokerages or agents by the above statements. We however feel compelled to share our experiences with buyers and sellers in order to spread public awareness as well as to avoid scam in our industry for better consumer protection. The end goal of this article is to increase the level of public awareness & confidence in Realtors.