When shopping for a new home, your agent should always have your best interests at heart. If this is the case, Sean O' Shea and the Global Defenders look into why dual agency exists in Ontario.
Robert Freedland is still angry over a real estate deal in which he bought a unit in this Toronto co-op building.
Freedland is peeved because he says he paid thousands more than he should have.
"I'd found out that there were other units in the same building selling for 40 per cent less than what I'd paid," said Freedland.
Freeland says his real estate agent didn't tell him about better, cheaper units available in the building at the time of the sale.
As it turns out, Freedland's agent was the same agent who was representing the seller.
"It's a complete conflict of interest," said Freedland.
However in Ontario, the arrangement is perfectly legal and quite common.
It's called "dual agency," where one agent represents both buyer and seller. Upon completing the deal, he or she keeps the whole commission.
It can work like this:
You, as a prosective buyer, might hire the seller's agent if you don't already have one. For example, you meet them at an open house where you quickly want to put in an offer.
Or, maybe you've hired your own agent and he or she leads to you a house for sale in which they are also acting for that owner.
"This is why it's so important that people understand exactly what's happening," said Tom Wright, the President of the Real Estate Council of Ontario.
The province's real estate regulator says it's important that real estate agents disclose that they're working both sides of a deal.
"It's the consumer, as we all know, who is spending the money. They're the ones in control of whether they want to move forward on the transaction or not," said Wright.
The question is: can one agent equally represent the interests of both buyer and the seller?
When it reviewed dual agency, the Ontario government said the practice "gives rise to potential conflicts of interest."
However, the real estate industry fought to allow dual agency to remain legal.
"It's kind of like asking as newlywed couple, the bride and groom, to go on their honeymoon and to promise not to have sex," explained Freedland. "I mean it's technically possible, but realistically not achievable."
Freedland, a former realtor himself filed a complaint against his agent, who received a letter of warning, but no other discipline. Also, Freedland has filed a civil suit against the agent.
The province's regulator says buyers should exercise choice when it comes to whom to hire in a real estate transaction.
"There's a role for the consumer in terms of understanding what they're getting involved in," said Wright.
If you're working with an agent who's representing both buyer and seller, there are stricter rules involving how that realtor deals with both sides. However, critics say an unscrupulous agent will ignore the lettter of the law, in order to make the deal for the seller at the expense of a buyer.
Freedland is peeved because he says he paid thousands more than he should have.
"I'd found out that there were other units in the same building selling for 40 per cent less than what I'd paid," said Freedland.
Freeland says his real estate agent didn't tell him about better, cheaper units available in the building at the time of the sale.
As it turns out, Freedland's agent was the same agent who was representing the seller.
"It's a complete conflict of interest," said Freedland.
However in Ontario, the arrangement is perfectly legal and quite common.
It's called "dual agency," where one agent represents both buyer and seller. Upon completing the deal, he or she keeps the whole commission.
It can work like this:
You, as a prosective buyer, might hire the seller's agent if you don't already have one. For example, you meet them at an open house where you quickly want to put in an offer.
Or, maybe you've hired your own agent and he or she leads to you a house for sale in which they are also acting for that owner.
"This is why it's so important that people understand exactly what's happening," said Tom Wright, the President of the Real Estate Council of Ontario.
The province's real estate regulator says it's important that real estate agents disclose that they're working both sides of a deal.
"It's the consumer, as we all know, who is spending the money. They're the ones in control of whether they want to move forward on the transaction or not," said Wright.
The question is: can one agent equally represent the interests of both buyer and the seller?
When it reviewed dual agency, the Ontario government said the practice "gives rise to potential conflicts of interest."
However, the real estate industry fought to allow dual agency to remain legal.
"It's kind of like asking as newlywed couple, the bride and groom, to go on their honeymoon and to promise not to have sex," explained Freedland. "I mean it's technically possible, but realistically not achievable."
Freedland, a former realtor himself filed a complaint against his agent, who received a letter of warning, but no other discipline. Also, Freedland has filed a civil suit against the agent.
The province's regulator says buyers should exercise choice when it comes to whom to hire in a real estate transaction.
"There's a role for the consumer in terms of understanding what they're getting involved in," said Wright.
If you're working with an agent who's representing both buyer and seller, there are stricter rules involving how that realtor deals with both sides. However, critics say an unscrupulous agent will ignore the lettter of the law, in order to make the deal for the seller at the expense of a buyer.
