CBC Marketplace recently featured an “investigative” report of Realtors steering their buyers away from homes where the Seller was representing themselves. The report was done in Ontario. Here’s a synopsis, along with my unfiltered take on what CBC didn’t report in their recent Marketplace investigation.
A CBC reporter went undercover as a buyer and requested three agents to show them a property being sold by the owner. Typically, these properties offer a lower commission and this was the case here. For your reference, here is the article if you’d like to read it!
In two out of three instances, the real estate agent attempted to “steer” the buyer away from the property using a variety of methods. Some flat out lied and said they weren’t able to book an appointment and some agents tried to shift the focus to another property. One was honest and explained that the seller was offering a lower commission and this was likely why the home hadn’t sold. This is an illegal practice and these practices make it harder to build the public’s trust in our profession.
To be clear, our code of conduct does not allow us to disparage or otherwise slander any business models and that includes discount brokerages. It’s between the brokerage and the seller to determine the commission they want to offer the buyer’s agent. When representing the buyer, the Realtor will often have a buyer’s contract in place that stipulates the commission they expect to earn for the work they are doing. Both parties agree to this. When a listing is offering less, it’s a conversation between the agent and the buyer as to how to proceed. Some options include the buyer paying the difference, the agent accepting the lower rate and amending the contract, the buyer choosing not to view the property (yes, this happens), or writing in the agreed commission (between the buyer and the agent) into the offer and making it part of the negotiation. A good Realtor always knows their worth and finds a solution to a problem, rather than avoiding it. Making clumsy excuses like not being able to book a showing is a lack of integrity and it should get called out. There are also instances where “bonus” commissions are offered, and in these instances, a buyer should also be made aware of it. I never take more than the agreed amount and any extra is passed on to the buyer. However, every situation is unique, which is why it’s between my buyer and me. If less if offered, I try to find solutions to get paid what we’ve agreed to. At the end of the day, communication and transparency are key.
What CBC doesn’t mention are the other reasons why agents are resistant to working with Sellers who represent themselves; which I think is weak reporting. They had their angle and why make it boring, right? Here’s the truth: it’s not always about the commission. When Sellers represent themselves, they have FAR less experience with contracts and the process as a whole. Nobody mentions how much extra work it is going to be as the only licensed person navigating the transaction. It can create conflicts of interest, misunderstandings, and a lot more education to drive simple points across. Personally, I worry about lawsuits happening because I know the Seller is up against an agent (me) with bucket loads more experience (I would never act dishonestly, but it’s an unfair match). To mitigate, I make sure I am crystal clear on things every single freaking step of the way and everything gets documented. A real estate license requires a license for a reason. We carry insurance, we enroll in mandatory professional development yearly, we understand material latent defects and the risks in not disclosing them. We have experience — a huge amount of it! When I hear people say they sold their home themselves and it was easy, it’s like hearing a kid say driving for their first time was easy. No one wants you to crash and so we’re happy you feel that way. However, experienced drivers know that while it may seem easy, if you do it long enough, you realize there are some hazards that only experience can train you far. In other words, it’s a naïve sentiment.
At the end of the day, dealing with a Seller representing themselves is not the same as dealing with a professional Realtor on the other side of the transaction. It’s a minefield and oftentimes, we are expected to happily deal with it for far less pay. That’s the problem I have with it and that is my unfiltered honesty for you. So, there you have it! My unfiltered take on what CBC didn’t report in their recent Marketplace investigation.