Realtor Code of Ethics

[Ken15]

Is this ethical? I know an agent who purchased a house from an elderly couple for a excellent price. He is now "flipping" the property for a considerable amount of money having done nothing to the property. The land the house sits on is worth more than what the old house is when divided into two building lots. I approached him offering $40k more than his purchase price and his response was that my offer was much too low for what the property is worth. Apparently this elderly couple approached him to sell their property and out of the kindness of his heart he purchased it from them for their asking price less real estate commissions.... of course! The asking price was based on two other agents appraisals.

Don`t these guys have to follow some sort of code of ethics? Seems criminal to me....

 

[Berubeland]

There is a code of ethics and the agent should be reported here http://www.reco.on.ca/

I have two friends who are real estate investors, they live on the same street. Last year a Power of Sale was on their street. They called multiple time and never even got in to see the house. This went on for several months finally the house sold for $100K less than the list price and well under value. It`s really hard to believe that there wasn`t some kind of monkey business involved. My friends do not talk to each other, it was just two different people complaining about the same issue.

 

[gwasser]

QUOTE (Berubeland @ Oct 20 2010, 05:40 AM) There is a code of ethics and the agent should be reported here http://www.reco.on.ca/

I have two friends who are real estate investors, they live on the same street. Last year a Power of Sale was on their street. They called multiple time and never even got in to see the house. This went on for several months finally the house sold for $100K less than the list price and well under value. It`s really hard to believe that there wasn`t some kind of monkey business involved. My friends do not talk to each other, it was just two different people complaining about the same issue.

There is an extensive code of ethics for Realtors and there is also legislation to protect consumers. I am not sure about Ontario,
but in Alberta there is for sure. It includes fiduciary duties where an agent for the client has to put his/her client`s interest before him/herself.

Having said all that, with the recent changes in the MLS listing practices, who really wants to be still a Realtor? Because the public would get away with deals like this under the new system while a Realtor would still be held accountable. I expect many more stories like this in the future involving savvy real estate investors taking advantage of elderly women and men or naive home owners. You may thank the Competition Bureau for that because they undermined consumer protection.

As to this particular case, if the facts are correct and complete, I hope they will nail the slimeballs. Of course, Ken15 is p`d off because he couldn`t get the place cheap enough either. Would he have posted if he was succesfull in buying the place?

Sorry to be this blunt, but... ethics are like a two-edged sword. Sometimes we see the failings of others and don`t realize our own.

 

[housingrental]

You should post an address or it`ll be hard to beleive your storey Ken!

QUOTE (Ken15 @ Oct 20 2010, 05:48 AM) Is this ethical? I know an agent who purchased a house from an elderly couple for a excellent price. He is now "flipping" the property for a considerable amount of money having done nothing to the property. The land the house sits on is worth more than what the old house is when divided into two building lots. I approached him offering $40k more than his purchase price and his response was that my offer was much too low for what the property is worth. Apparently this elderly couple approached him to sell their property and out of the kindness of his heart he purchased it from them for their asking price less real estate commissions.... of course! The asking price was based on two other agents appraisals.

Don`t these guys have to follow some sort of code of ethics? Seems criminal too me....

 

[RedlineBrett]

QUOTE (housingrental @ Oct 20 2010, 09:19 AM) You should post an address or it`ll be hard to beleive your storey Ken!

In Alberta realtors cannot buy under market value or use their industry member expertise to take advantage of a non-industry member.

 

[bizaro86]

QUOTE (RedlineBrett @ Oct 20 2010, 10:04 PM) In Alberta realtors cannot buy under market value

A disadvantage to holding a real estate license, no?

Michael

 

[gwasser]

QUOTE (bizaro86 @ Oct 21 2010, 08:38 AM) A disadvantage to holding a real estate license, no?

Michael

A lot of people suspect that the new MLS rules will make commissions go down. I suspect the opposite is also possible. First of all, the new rules will make it even more disadvantageous for investors like myself to be a Realtor. Simply said, as a Realtor, even if you do not represent the other party in a listing, you cannot buy for yourself a property below market value. The court would expect you (as the expert) to be honest and you are not allowed to take advantage of a `naive seller`. Strangely enough if as a Realtor you represent a buyer for whom you have to act in the best interest, you must buy at the lowest possible price (unless illegal).

Also, as a Realtor your clients may claim damage if you do not present them the best deals first. Especially when a Buyer-brokerage agreement is in place. So now that the new MLS rules are in place who wants to be a Realtor? I for one am considering quitting - real estate investing is tough enough why do it with one arm tied behind my back?

So, there is a chance there will be less Realtors. Right now, most Realtors earn very little money, especially considering high education costs, licensing fees, brokerage fees, gadget fees and Real Estate Board fees. So I suspect that with the threat of commissions being reduced even further, the Realtor Supply is about to shrink.

After an initial storm of inexperienced property owners being ripped off by savvy ones, I suspect a backlash, where consumers will actually insist on being represented by a Realtor. In the meantime, Realtor services will be broken out in components, kind of like `A la carte` property Management. Guess what, if you buy piece-meal, you pay more for the components. This may become a more attractive (more profitable) part of the business for surviving Realtors and my guess will be that buyers of the `total service package` end up paying more in the future as well once the higher component service pricing is in place.

So less Realtors, higher demand for representation and protection, and higher service fees. That may be the unintended consequence of this action. In the end the consumer will also be less protected and be provided an inconsistent fragmented service.

How does this sounds to you? I guess Michael will love it and so will others so vocal about `high commissions`. But the actual outcome may be one big unintended consequence. The opening post being a case in point.

 

[bizaro86]

QUOTE (gwasser @ Oct 21 2010, 09:09 AM)
How does this sounds to you? I guess Michael will love it and so will others so vocal about 'high commissions'. But the actual outcome may be one big unintended consequence. The opening post being a case in point.




I haven't been vocal about commissions being too high. I use a full service realtor, and get a significant amount of value from that relationship. I've used a full service realtor to sell, and paid a commission for that service. I've posted alternative commission structures before, which I still find interesting: http://myreinspace.com/public_forums/Real_Estate_Discussion/62-15494-Alternative_Commission_Structure_for_Realtors_Thoughts.html



In that same thread, I also expressed a significant dis-inclination for realtors to go to "a-la-carte" pricing. I understand that this ruling may force that result, but I'm going to stick with the standard system as long as possible. The reason is simple, I'm cash-for-downpayment limited. Under the current system, the seller pays the commission with money from the buyer, so it gets rolled into the buyer's mortgage. If I have to pay a commission directly to my buyer's agent, I'll have to pay it with cash. (I doubt she'd want to take it over 30 years, which is fair)



Ultimately, I get value from my realtor, and I doubt you'd be able to find any posts by me complaining about commissions.



Michael

 

[gwasser]

QUOTE (bizaro86 @ Oct 21 2010, 09:21 AM) I haven`t been vocal about commissions being too high. I use a full service realtor, and get a significant
Michael


Sorry Michael, I was a bit hasher in that statement than intended.

 

[Mike Milovick]

The Canadian Real Estate Association (CREA) also has a code of ethics. Very similar to RECO.

When it comes to discplinary matters, in Ontario, you must file a complaint in writing. The issue may be handled by the local board (in larger boards) or by the RECO itself in smaller boards or more serious issues...

Mike

 

[jwilbrin]

QUOTE (housingrental @ Oct 20 2010, 09:19 AM) You should post an address or it`ll be hard to beleive your storey Ken!I would strongly advise anyone in this REIN forum to NEVER publish anyone`s name or address. You really put yourself at risk for a defamation issue or lawsuit. I did see a post a while back where a member actually mentioned a tenants name but it was quickly removed which I am guessing was the excellent work and monitoring of the REIN forum administrators.

"What is defamation?
Defamation is communication about a person that tends to hurt the person`s reputation. The communication must be made to other people, not just to the person it`s about. It can be spoken, which is called slander, Or it can be written, which is called libel. It can also be a gesture, which is a type of slander.

The law protects your reputation against defamation. If someone defames you, you can sue them to pay money (called “damages”) for harming your reputation." -- The Canadian Bar Association

 

[RedlineBrett]

QUOTE (bizaro86 @ Oct 21 2010, 08:38 AM) A disadvantage to holding a real estate license, no?

Michael

Yep definitely! Alberta consumers don`t know how well they are protected compared to other provinces/countries...

 

[housingrental]

This would make the forum a much less interesting read.Jwilbrin you should be ashamed of yourself.Ken I want info!!!!

QUOTE (jwilbrin @ Oct 21 2010, 12:28 PM) I would strongly advise anyone in this REIN forum to NEVER publish anyone`s name or address. You really put yourself at risk for a defamation issue or lawsuit. I did see a post a while back where a member actually mentioned a tenants name but it was quickly removed which I am guessing was the excellent work and monitoring of the REIN forum administrators.

"What is defamation?
Defamation is communication about a person that tends to hurt the person`s reputation. The communication must be made to other people, not just to the person it`s about. It can be spoken, which is called slander, Or it can be written, which is called libel. It can also be a gesture, which is a type of slander.

The law protects your reputation against defamation. If someone defames you, you can sue them to pay money (called "damages") for harming your reputation." -- The Canadian Bar Association

 

[bizaro86]

QUOTE (RedlineBrett @ Oct 21 2010, 02:42 PM) Yep definitely! Alberta consumers don`t know how well they are protected compared to other provinces/countries...

I seriously considered getting a real estate license when I realized I`d be buying a bunch of properties, not to work as a realtor, but to harvest the buyer`s end of the commission on my own deals, as at first blush the commissions seemed high.

The combination of cost and restrictions made it extremely unattractive. I felt it wouldn`t allow me to buy FSBOs under market, and the financial and time costs of being a realtor are real. When I added the advantage of advice from an experienced realtor (which has saved me $$ more than once), it became a no-brainer to stay un-licensed.

Michael

 

[RedlineBrett]

QUOTE (bizaro86 @ Oct 21 2010, 03:25 PM) I seriously considered getting a real estate license when I realized I`d be buying a bunch of properties, not to work as a realtor, but to harvest the buyer`s end of the commission on my own deals, as at first blush the commissions seemed high.

This is actually how I got my start. Then once I had seller`s agents trying to work my end into the negotiations I had to get a friend to represent me. Haven`t looked back since.

 

[bizaro86]

QUOTE (RedlineBrett @ Oct 21 2010, 03:34 PM) This is actually how I got my start. Then once I had seller`s agents trying to work my end into the negotiations I had to get a friend to represent me. Haven`t looked back since.

Was that a common occurance, them trying to take back your half of the commission? I`m still vaguely curious about the idea, since I`m reasonably confident I could represent myself, but I`m not interested in becoming a full time realtor. (I really enjoy my full-time job, and wouldn`t quit even if I was independently wealthy)

Michael

 

[RedlineBrett]

QUOTE (bizaro86 @ Oct 21 2010, 03:38 PM) Was that a common occurance, them trying to take back your half of the commission? I`m still vaguely curious about the idea, since I`m reasonably confident I could represent myself, but I`m not interested in becoming a full time realtor. (I really enjoy my full-time job, and wouldn`t quit even if I was independently wealthy)

Michael

If you come in well under list price and are also looking to make money on the sale then yes you can expect a shrewd agent to make an issue of it. However in the wake of tougher rules for realtors I don`t see many representing themselves.. even on the selling side.

 

[gwasser]

QUOTE (bizaro86 @ Oct 21 2010, 03:25 PM) I seriously considered getting a real estate license when I realized I`d be buying a bunch of properties, not to work as a realtor, but to harvest the buyer`s end of the commission on my own deals, as at first blush the commissions seemed high.

The combination of cost and restrictions made it extremely unattractive. I felt it wouldn`t allow me to buy FSBOs under market, and the financial and time costs of being a realtor are real. When I added the advantage of advice from an experienced realtor (which has saved me $$ more than once), it became a no-brainer to stay un-licensed.

Michael

If you want to learn what it is to be a Realtor and learning more about realty in general other than only the REIN point of view, getting your license is worth it. It broadens your perspective.

If you do it to save on commissions, forget it. You`re right. To much hassle. I made my money back, but I don`t think I`ll be a Realtor much longer. I did represent myself, but now under the new rules this becomes even trickier. Not worth the risk. I prefer to buy below market through a Realtor

rather than as a Realtor.

Once I am `de-licensed` and back as investor, I`ll plan to use a Realtor - a good one that understands my needs and perspective. Because from my point of view they are worth it. In the past I did not know what to look for in a Realtor. Now I do.

 

[biancahamiltonrealtor]

QUOTE (Ken15 @ Oct 20 2010, 04:48 AM) Is this ethical? I know an agent who purchased a house from an elderly couple for a excellent price. He is now "flipping" the property for a considerable amount of money having done nothing to the property. The land the house sits on is worth more than what the old house is when divided into two building lots. I approached him offering $40k more than his purchase price and his response was that my offer was much too low for what the property is worth. Apparently this elderly couple approached him to sell their property and out of the kindness of his heart he purchased it from them for their asking price less real estate commissions.... of course! The asking price was based on two other agents appraisals.

Don`t these guys have to follow some sort of code of ethics? Seems criminal to me....


Hi everyone.

I’m an agent in Hamilton and sit on the discipline committee.

This is a serious allegation and should be reported, with as much detail and evidence as possible to the local real estate association asap.

Members of the discipline or ethics committee would examine evidence and decide what would be next.

If you want to see sample RECO (real estate council of Ontario) cases, just go on their web site.

 

[Ken15]

It`s happened again... I own a vacant parcel of land and the property directly adjacent to me recently sold. Another "backroom deal" that ended up in the hands of a couple of Real Estate Agents!?! Same scenario... A little old lady lived there and somehow these agents or her listing agent convinced her (or her estate) to sell to them without putting it on the market.... or even calling the developer (me) next door to get a competing offer. Once again it sold for way under value... Is it not "Real Estate 101" to approach neighbouring property owners especially when your neighbour is a developer???