B.C. rules banning real-estate ‘double-ending’ could hurt buyers, realtors State

New draft rules prohibiting so-called double-ending by property agents are being fulfilled with chagrin from realtors, who say they knew the change was coming but it could have some drawbacks for some home buyers.

The B.C. Office of the Superintendent has issued the draft rules barring agents from representing both the buyer and seller in a transaction, although the service will nevertheless be permitted in distant locations underserved by accredited agents.

Re/Max representative Ed Ganeff said he is not pleased with all the changes, but said he understood it was something that “had to come{}”

Unethical practices in the real estate business, highlighted in news coverage, finally prompted the state of British Columbia to create the superintendent’s office responsible for regulating the state’s 22,000 agents. Formerly, the Real Estate Council of B.C. was self-regulating, controlled largely by realtors.

Mr. Ganeff said the chaos was detrimental to the business and has eroded public confidence.

The draft regulations, he said, “should give them some relief and understanding they have a choice{}”

He noted the change is going to be a hard “startup” for realtors and with no limited dual agency, he must establish another method of assisting clients.

Mr. Ganeff said he likely will refer a number of his customers to other realtors who he trusts and will serve the customers in a professional way.

Ontario is also contemplating tougher consumer-protection rules for property brokers, such as restrictions on dual agency.

Vancouver real estate agent Steve Saretsky stated he had “mixed feelings” about B.C.’s draft changes.

He acknowledged it is tough for brokers to represent both parties both but, he said, the rules are putting buyers at a disadvantage if the option is no agent whatsoever.

“Rather than buyers becoming limited dual agency, there’s absolutely not any representation anything and I believe from a realtor’s perspective, they don’t have a legal liability to that customer, so I believe that the buyers are actually at a disadvantage now than anything,” Mr. Saretsky stated.

Mr. Saretsky also addressed that although limited dual agency will be prohibited, double-ending still exists.

“There is a tiny bit of misconception among the general public, also, that double-ending is finished. It merely means that double-ending from a limited dual agency’s standpoint is over. But there’s still double-ending. Any agency still can take both commission from the selling side and purchasing side; they did not eliminate this,” he noted.

Mr. Saretsky went on to explain that, whilst double-ending is not banned, agents will need to disclose their commission to customers and note they’re not sharing it.

The B.C. Real Estate Association has been critical of the changes, stating property buyers’ choices will be narrowed.

“Over my almost 25-year career as a realtor, many long-time customers have developed trust {}, and now my customers don’t have any choice but to start from the start and build new relationships,” the association’s president Jim Stewart said in a release.

“Trust is an essential part of what is often the biggest financial transaction in people’s lives{}”

Among other changes recommended in the new draft guidelines, scheduled to take effect Jan. 15, 2018, is an end to “shadow flipping,” in which properties are bought and then resold multiple occasions for a higher price before the initial deal closes.

A Globe and Mail investigation showed such transactions occurred often without the original vendor being conscious of them. The new guidelines include several provisions to require better disclosure.

Courtesy: The Globe And Mail