Real estate agents breaking the rules: Hidden camera investigation (CBC Marketplace)

>>Charlsie: This is “Marketplace.” Real estate agents, caught on camera.>>I can coach you, kind of on how to, what price to put.>>Ten agents, ten hot neighbourhoods, bidding wars spark secret deals.>>I think he purposely blocked our offer.>>Charlsie: In this hot market is your agent rigging the deal?>>I use my power in order to get you the house.>>Charlsie: And wait until you see how homes get sold down under.>>Property is going, going, sold!>>Charlsie: This is your “Marketplace.”>>These are very nice houses here.>>Charlsie: We’re out house hunting.>>There’s not much that comes up on the street so it goes really quickly.>>Charlsie: But we’re not actually looking for our dream home.>>The property is — offering is not listed. We’re going to have to ask the agent.>>Charlsie: We’re under cover. Hidden cameras rolling, on the look out to see if real estate agents are breaking the rules. When you’re fighting for the perfect house, it’s up to agents to do what’s right for buyers and sellers.>>But here’s the thing. In most of Canada, agents are allowed to represent both sides of a sale. And earn commission on both sides, too.>>Charlsie: In Canada’s hottest markets that can be as high as $78,000 on the average sale. A huge incentive for agents to do what’s called double end a deal. And sell to a buyer of their own. But exactly how common double ending is, that’s an industry secret.>>Until now, with the help of insiders, we get our hands on this. Stats the public never gets to see.>>For the first time, we can see the number of homes an agent sells, what they sell for, and most important, how many of those sales are double ended. The average among top sellers in and around Toronto? 10%. But for some, 20%, 30%, even 40% of their sales are double ended what the numbers don’t tell us, though, is how many of those sales are aboveboard. For that, you need to be on the inside of a deal. We’ve already found the places we want to buy. All homes in Toronto’s hottest neighbourhoods. All likely to end up in a bidding war.>>Charlsie: The agents greeting us at the door? Top sellers. Part of teams that double ended at least 20% of their deals this year. Others, we were tipped off to.>>Will they agree to double end a sale for us?>>Charlsie: We tell each one we’re not working with an agent of our own. Two of the ten say that’s not a good idea.>>Charlsie: But the majority are eager to represent us.>>Charlsie: Signing us on is allowed, as long as the seller agrees to and it looks like they often do. When we check some of Toronto’s hottest neighbourhoods, we find one in ten sales are double ended. What’s not allowed? Sharing the amount of competing bids with your own buyer.>>Charlsie: But at this house we haven’t even finished our tours when the agent makes us this offer.>>Charlsie: What price to put? Does that mean he’ll help us make the highest bid?>>Charlsie: Hmm, beating the guy like that doesn’t sound fair. To find out if a line’s been crossed, we head to the Real Estate Council of Ontario. Kelvin Kucey, RECO’s deputy registrar, he’s in charge of discipling agents.>>If there’s ever a concern about how a trade transpires that’s what we’re here for. We find there’s noncompliance with the rules we will prosecute to the fullest extent of the law.>>So what will he think about the offer we caught on camera?>>I can coach you kind of how to — what price to put.>>That’s a problem. He’s placing himself in a fiduciary conflict, for sure.>>A conflict.>>Yes.>>For sure.>>For sure.>>No doubt about it?>>Certainly from our perspective, yeah.>>Charlsie: This agent broke the rules by promising to help us beat the other bid. Wait until he sees what other promises we catch on hidden camera.>>Charlsie: It’s a backroom deal, over in 20 seconds, but if he makes good on it could mean the difference between losing the house and making the winning bid.>>We didn’t beg, we didn’t plead. It was yeah, I’ll tell you.>>That obviously is a concern, if that’s how they see that they are representing the interests of both sides of the trade.>>Charlsie: This next agent? Boasts. His team double ends all the time.>>Charlsie: And why might that be a good stat to know?>>Charlsie: And when we follow up, he reveals he’ll work with his colleagues to help ensure we get the house.>>I don’t know if he’s going to do a first time shot, kind of the highest you can go and you don’t get a second chance. But he will definitely give us a second chance. That’s 100% certain. We will get a better opportunity. We have our trickings where we can just on the borderline of legal. But we’ll definitely try to help you out there.>>Interesting.>>Charlsie: Can you believe this language? Tricks. Just on the borderline of legal.>>Well, it’s this type of conduct, and that type of vernacular which places the real estate profession into disrepute.>>This is more than disrepute. These agents are breaking the real estate act, and their code of ethics. [ Doorbell rings ]>>Charlsie: But one after another, they take the risk and promise to disclose secret bids.>>Charlsie: After only five minutes one agent even tells us the exact number we’re up against.>>Good inside info for us, but not so good for the other buyer.>>What would the penalty be for something like this?>>We would be looking at maybe a $3,000 to $5,000 fine and if there’s recidivism or a repeat pattern, we can go up to as high as $25,000.>>$3,000 or $5,000 on a house that is probably going to go for more than $890 doesn’t seem like much. Are the fines steep enough?>>Well, in our experience, the fines are more than adequate.>>Charlsie: Even so, there’s a slim chance of getting caught. That’s because bidding wars go down in secret. So buyers will never know why they lost a house. Unless they go searching for answers.>>We were looking for two years.>>Wow.>>We wanted to make sure we were moving to the right house, right? The right area? We’re pretty picky. This is it. This is the one.>>What a property.>>Beautiful, eh?>>Charlsie: This was supposed to be Kevin Waylands forever home. The perfect place to raise his family.>>Charlsie: You lost this one.>>Yup.>>Charlsie: He was devastated when he discovered it sold to another buyer for $30,000 less than he tried to offer.>>The listing agent himself had also brought the buyer forward, and that’s when we thought — that’s why our offer wasn’t accepted.>>Charlsie: What do you make of that?>>I think he purposely blocked our offer so that he would get double commission.>>Charlsie: Suspicious? Kevin tracks down the owners that sold the house.>>I told them that, you know, we were offering $30,000 over and he’s like what? I said yeah, we tried to get our offer through, and you wouldn’t, your agent wouldn’t respond to our pages. And he even said himself, he said well that’s ridiculous, because my agent was in the office, so there’s no reason that he shouldn’t have got your pages.>>Charlsie: So you lose the house, the sellers lose out on the money, and –>>The listing agent walks away with a big smile and a big Bankroll.>>Charlsie: The owners who sold this house aren’t the only ones losing out. Studies show when the same agency represents both buyer and seller, properties sell for $1.4% less. On the average home in Toronto, that can add up to $11,000. Remember, on our undercover house hunt, these agents were hired by sellers to get them the highest price, but that doesn’t stop this agent from offering to help us save.>>Charlsie: So he’ll make sure we don’t overpay. Not good for the seller, but it could mean double commission for him. It’s not in the best interests of the seller, who’s trying to get the most for their property.>>The seller is entitled to get as much as they possibly can for the property, and there’s the inherent conflict that we spoke about.>>Charlsie: At this house, we expose another way agents break the rules to score double commission. Shut other buyers out, and rush our offer through.>>Charlsie: This agent double ended close to 40% of her deals this year.>>I have control on both sides.>>I have a problem with this. The power is in the consumer. And clearly on the basis of that, we have people out there who think otherwise and certainly that would be a cause for grave concern, and this would be, if this took place, we would be prosecuting and we would be looking for maximum penalties.>>Charlsie: Really? Maximum penalties.>>Yes.>>Charlsie: She wasn’t the only one. Six out of the ten top agents broke the rules. So why allow agents to double end at all?>>The way it works now is effective as long as everybody’s being honest and working with integrity.>>Charlsie: So what we just showed you is that everyone’s not working with honesty and integrity.>>Well and you’re going to give me a list of those names, aren’t you?>>Actually we’re not sharing names or showing faces. That’s because we’ve been told behaviour like this is industry-wide. Who knows how many others have lost thousands in profits. Or like Kevin, the home of his dreams.>>It was the perfect house for us, but we’re — I am trying to move on to where we are. And our son is doing really well where we are now. It’s just — that was, that was the house. That was it.>>Charlsie: To find a better way, we’re going down under. Real estate deals like you’ve never seen before.>>This is how it works.>>Charlsie: You can’t afford to miss this.>>Charlsie: The real deal on your “Marketplace.” Canada has one of the most secretive real estate markets in the world. Closed door bidding means agents can cash-in by breaking the rules, while buyers and sellers lose out. But does it have to be this way? Nope. Just follow us to the other side of the world. We’re going down under. In Australia, real estate deals go down like you’ve never seen before.>>We’ve got a beautiful day for an auction here. Let’s get the show on the road, for example.>>Charlsie: These houses are up for sale.>>If you want to buy the house today, this is how it works. You better be the one holding that very last bid.>>Charlsie: The crowds outside? Hopeful buyers making their bids.>>$920 once.>>Charlsie: Bidding wars here happen right out in the open.>>Property going, going, sold!>>Charlsie: In Melbourne’s hottest neighbourhoods, about 90% of houses are sold by auction, almost 1,000 homes on this day alone.>>Good luck today.>>Charlsie: And on the action, real estate agent and auctioneer Elliot Gill.>>This really has been our pleasure over the last couple weeks to bring this fantastic property to market.>>Charlsie: He’s here with his team, looking for the best price on the first of five houses they’ll auction today.>>They call Melbourne the auction capital of the world. We love it because it’s really transparent and a buyer can see exactly what their competitors are doing. The law prohibits false bids and bidders from attempting to prevent others from bidding and provides fines for this conduct.>>Charlsie: Yup, no funny business here.>>This is the one you should be digging deep on, folks.>>Charlsie: Another different down under? Noticeably absent from the auction, buying agents. Why don’t people have them?>>Because people are able to get all of the information available to them here. There isn’t as much of a need for it.>>Let’s get the show on the road!>>Charlsie: Unlike back home in most of Canada, sales history and comparables here are available for free online. So everyone here is already in the know and ready to bid.>>At $920, $60, can I make it, sir?>>Charlsie: As this auction heats up –>>At $1 million, $20 would be your bid.>>Charlsie: — we meet the man leading the charge for consumer protection in real estate. Minister Victor Dominello.>>If we empower the consumer, we have a stronger marketplace.>>Get this, there’s no double ending down under. Aussie lawmakers banned it more than a decade ago.>>People are not confident in the transaction, then that undermines the whole system.>>Charlsie: So from your perspective it’s just black and white. It just should not happen.>>Well, from my perspective, if we try to reintroduce a law that enabled that to happen, I’m sure there would be very much a loud voice from the consumers saying why are you doing this. It doesn’t exist now and I think that’s a good place to be.>>Charlsie: And as for their open bidding?>>If you were to suddenly tell Australians we’re going to do away with the auction process, what do you think their response or reaction would be?>>And I think they’d be rioting up side those gates now.>>Charlsie: No rioting here.>>Seems fair, you can actually see his bidding.>>I can get a feel for that there’s eight people interested in the property, so when you’re thinking about that and you want to re-sell it, you have strong interest.>>Charlsie: In Canada we do things pretty differently.>>Yes.>>Charlsie: Everything’s in secret.>>That’s crazy. That is so crazy.>>It’s not right, is it?>>Charlsie: Yeah, it’s very different.>>We love Canada, we love Canadians, so you know, more power.>>Charlsie: Does it seem strange to you?>>Does seem strange.>>It’s got a fantastic location, but all the home really does need is your name on the contract today.>>Charlsie: Auctions like this usually last about 15 minutes. 15 tense minutes.>>Welcome sir, there’s your competition, front and centre.>>Elliot and his team make sure no bids are missed.>>$20, $30, $40? $40 it is. $60? Thank you. At $1.6 million — >>Charlsie: And prices go up and up.>>$70, good bid! $71, $72, $73, $74, $75 >>Charlsie: The sellers are hoping to get over $1.1 million.>>$1.19 million. First time, second time, first final call. $5,000. $1,095 — and a half, and a half, there’s your competition. One million ninety-five and a half.>>Charlsie: Now it’s down to just two bidders.>>$198.>>Welcome back. Make is 1.2, sir?>>$1.>>$1.2, good bid, sir. Need to let you know — $500.>>Welcome back. $1.25. I’ll call the property three times. First call, second call, third and final call. Absolutely sure?>>$500.>>Welcome back.>>Charlsie: We take our findings to the government.>>Why not just get rid of double endings?>>I would be open to the suggestion.>>Charlsie: “Marketplace” has got your back.>>Charlsie: How not to buy a house on your “Marketplace.” Caught on camera. Real estate agents breaking the rules.>>Charlsie: In an effort to double end a deal, and double their commission while you lose out. Six out of ten. The majority of agents said I will bend the rules. What do you make of our results?>>If 60% of real estate agents, which is sort of what you’re asserting, are prepared to be non-compliant with the rules, perhaps we need to tighten what we’re doing on an across-the-board basis.>>Charlsie: As for the agents, most tell us they did nothing wrong. Some say they were merely passing on their professional expertise, though one admits it happens all the time. So what’s RECO going to do about it? Turns out there’s not much they can do.>>If people are finding themselves in that situation we welcome complaints.>>Charlsie: Most people won’t know when something went wrong, and I think our test clearly shows that this is happening behind closed doors.>>Well, we can only discipline on the basis of who complains, so we’re more akin to a fire department as we are to a police force. We respond to the call as opposed to having the resources to go out and look for misconduct or noncompliance.>>Charlsie: So why not eliminate double ending?>>Certainly from the perspective of the consumers that are hurt, they want that gone and that’s really something that the government really has to think seriously about.>>Charlsie: And since the government has the power to ban double ending, we take our findings to them. Marie-France Lalonde is Ontario’s Minister of Government and Consumer Services. Does she think double ending should go? The complaint system doesn’t work. Why not just get rid of it?>>At this point what I would say is that RECO has that authority and that responsibility.>>Charlsie: They told us that you’re the ones who give them the tools, you’re the ones who set the law. Sounds like you’re passing the buck to RECO and RECO’s passing the buck to you.>>Well, we have confidence in their ability, and their leadership.>>But why not just get rid of double ending?>>I would be open to the suggestion, but I think that currently, under our legislation, the regulation is there to protect those consumers.>>Charlsie: So the minister is okay with things the way they are. But if you’re not, Melbourne might be the place for you.>>At $1,202,500. Calling again for the third, possibly the final time. Are we done? We’re selling the property. No late surprises! We’re selling, sold! Congratulation, welcome to Burnley.>>Charlsie: This house sells for $1.2 million, out in the open, for buyer and seller to see.>>Charlsie: You are the seller.>>Yes.>>Charlsie: And you were watching?>>Yeah, we were actually watching through these slats here. We could hear everything that was going on. It was very exciting.>>Charlsie: On this side of the world, at least, everyone gets a fair shake.>>Charlsie: Next week on “Marketplace,” millions of followers, dozens of daily posts.>>Kim Kardashian, on your phone, talking to you.>>Charlsie: But are they letting you into their lives or just cashing-in?>>About $75,000 for a single post.>>Charlsie: The murky new world of celebrity endorsements.

62 Replies to “Real estate agents breaking the rules: Hidden camera investigation (CBC Marketplace)”

  1. Seriously? You jackwagons didn't give up the named of the agents you caught? If the officials can't even enforce their insanely lenient laws, how does anything change?

  2. If you mad about high home prices than just do what the investors do when they buy homes… but instead of selling it, live in it. duhhh!!!

  3. Maybe I’m just a noob but I don’t understand why it’s such a problem for the buyer to know what other people are bidding so that they can bid higher I mean to me it makes sense if you want to buy something but someone bids higher I would like to know their bid so I can determine if I should bid higher or just pass and find another place

  4. If there’s money involved you can never have anything on an honesty policy and hope that it works cause it never will , people are greedy

  5. God I would love to be a real estate agent in Australia all the interested buyers come straight to you all in one place and the price and deal is made within 15 min

  6. So glad I found this Chanel, so educating! I love it. I really felt bad for Kevin losing that house, but Kevin if u read this, take it as a blessing in disguise coz your son will probably have the best childhood memories where u r now than If u had gotten that house! N u might even find something that u love more in the future when decide to but again.

  7. Years ago, I offered the asking price on a house, I was told by the real estate agent that no one but the seller would know what we offered. We lost the house because someone offered more than the asking price, at that time it was unheard of, never, ever happened. Later I found out that the person who bought it was the chief of police in that town. We were never given a chance to counter offer, it was all set up. The agent working for the agency ended up quitting after this happened, he told us it was unethical what the agency did. Bottomline, the chief wanted the home, he got it!

  8. In NJ you really dont need a lawyer to buy a home, but I definitely recommend it. We were buying a new home, new construction, we paid a lawyer $500 to go through the contracts, they put shady crap in there, trying to make us pay for seller fees and more, my lawyer caught everything and saved us over 4k, so definitely worth the $500 attorney fee!

  9. The seller of the home that Kevin was going to buy should have sued the real estate agent and agency for the lost money

  10. I will not be around for much longer due to my age. But thanks to you younger folk, you make It much easier. We are in a new age now, an age where all the marketing is based on tricking and scamming people out of their money. It,s mainly the young entrepreneur who wants to make a name for him/herself and climb that ladder. Even If they have to lie, so they can stuff their bosses pockets with more and more money. watch out for the one,s that say. [ how are you today ] they are leaches. Malc UK

  11. I was a realtor and got out of it because of the backdoor deals, lies, misrepresentations. It happens daily and I could not live with myself under those conditions. Cheap car salesmen!!!

  12. Oh F off people, the realtor gets the bigger share of the commission this way and will fight harder for your situational circumstances. It’s a win all the way around.

    I always negotiate with the sellers realtor, much more leverage that way

  13. Generally nine out of 10 real estate agents are complete total thieving Liars… That one might be your family member that isn't a complete thieving liar.

  14. Most are overrated, under skilled looking for a quick way to make $ happy with their suits they never dreamt of, they show you 1,2 houses and expect 30K commission for the company, when you work 6 months or more to make it, most bidding wars are a joke and with money that is not theirs they are simply used to laundered $ where people overseas do not give a crap

  15. Why is it almost every time someone is trying to scam or ripoff a Canadian, the criminal happens to be from Indian heritage? I mean I have lifetime friend with Indian heritage who are the sweetest, friendliest and most hard working people I know. But it’s kinda funny how in Canada that’s the trend, why do you think it’s like that?

  16. You can't legitimately represent both the buyer and the seller as they have opposed interests. That is what we call a Conflict of Interest.

  17. I'm really impressed with the honest investigative journalism work you folks are doing. It is all but dead in most of the world.

  18. A $3-K fine on a home where the commission if they don't get caught are $78K on an average home sale? that doesn't sound adequate at all.

  19. So the agency that can increase fines and suspend licences – the thing you complained needs to be done – asks for names and you don't give them??


  21. Double ending deal with real estate agents should be against the law, especially when Real Estates agents do shady things. Agents that do that should lose their licenses. My eyes are more open now.

  22. In the US, the realtor always represents both sides of the deal. I don't see any reason why each party needs their own realtor. That's odd to me.

  23. WTF Marketplace. people be doing wrong crap and screwing people over and "were gonna keep the names to ourselves"… I wouldn't be surprised if you were working with some of the corrupt organizations.

  24. Sale deals that clients have agents who works at the same office are also common and conflictual. Agents share infos that should not be revealed !

  25. I would not like to bid because you might rush your decision. And btw how do they decide when the person will be moving out while bidding?

  26. They won't do jack….pass the buck around n do nothing but collect from fees charged to become realtors…..
    never understood their need!! lazy folks who reap where they never sow

  27. Oh. I guess each country has a different set of rules.
    In my country, agents can only take 3% fees base on the house price from home owners. We don’t charges anything from the buyers unless buyers requested us to find a very specific house and location.
    And the house price is display to public

  28. Amazing show. I cant beleive gov is just trying to dismiss this like its nothing. Bs. Too much trust in gov. People need to unify and protest.

  29. Everything like this is normal when Greed is the norm of the day. Politicians and policy makers don’t give a damn to what common people’s problems are.

    If they just increased the fines substantially to $50,000 from $5,000 and suspend their Real Estate licenses for anywhere from 2-5 years depending on the nature of their “financial crimes” things might be improved.

    But the people in power won’t ever let that happen as they’ve vested interests in keeping the status quo!!

  30. Cant you sell a place without a agent in Canada? The places are hot. The only thing is that you have to let it know that you are selling. Ain’t no rocket science

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