By Philip Kocev

As an ethical, active real estate broker in Toronto who is very familiar with the concerns buyers have with multiple representation (mainly in multiple offer scenarios), I do not support the position the Ontario Real Estate Association (OREA) or the government (banning “double-ending” altogether) has taken.  I believe this position misses the mark completely on the real issue buyers have with the current process, which I firmly believe is rooted in a lack of transparency (specifically in multiple offer situations).

OREA and our elected governments are missing a great opportunity to be forward-thinking, instead taking the easy way and rushing to mirror other models as it relates to developing a process that truly addresses the real issues consumers complain about.



While I understand that there is some merit to the position taken by OREA, I am not convinced how it would stop two Realtors from the same brokerage speaking with each other to give their buyer an advantage over a buyer from another brokerage, or for that matter two Realtors in different brokerages doing the same.

My experience with this issue is about multiple representation when there is more than one offer. Buyers (and Realtors) I speak with are more concerned about “transparency” and “fairness” in how they choose price points and terms when competing on a property. None of the recommendations address that properly. I am also not convinced that taking away a buyers’ choice to work directly with a listing agent is the answer. However, I totally agree that unfortunately there are listing agents who take advantage of this and they should absolutely be dealt with appropriately.

I am in favour of implementing some form of transparency model (not auction-style), while of course ensuring privacy is maintained, like the model suggested in REM by Rui Alves. While a transparency model represents a total paradigm shift, I strongly believe implementing a degree of transparency in the process more adequately addresses the public’s concerns.

As someone who cares deeply about public protection, home ownership and building stronger credibility and ethics in the real estate industry, I urge the government and OREA to challenge yourselves to ensure that what you are recommending is addressing the real issues consumers face.  We have a great opportunity to think bold and be leaders in this matter, and not just follow models in other jurisdictions or rush to make decisions based on political might.  I implore you to not waste this opportunity to make impactful and meaningful change!

 

  • Diane

    Great article Phil.

  • Rita Giglione

    I have never felt comfortable emailing or faxing the APS on behalf of my buyers to the listing realtor. I have no way of verifying whether the benefits of my buyers APS were discussed, and if any other terms of the offer were presented correctly.

    I would like to see one of 2 scenarios:

    1.) All realtors bringing the offer are present at the time offer is presented to the seller.
    2.) All offers are sent to a 3rd party. Sellers lawyer is probably the best option.

  • Shannon Unger

    I agree completely with you. The problem with taking away the ‘double end’ is also taking away the opportunity for a listing salesperson to do a proper job of marketing and finding a buyer for the listing. When I go into a listing presentation and describe my hard work in planning and executing an open house it includes actively searching for a buyer for the home. The open houses become less effective in this case now also. When we list property, our job is to sell the home and that includes finding a buyer whether its a customer or client. Transparency and education of both the realtors and the public are the most important points. Maybe we should be focusing on better education…

  • Steve Langlois

    Philip, you and Rui make the most sense of this situation. Unlike the knee-jerk reaction of the government and OREA, which, as you point out, doesn’t actually fix anything. Frankly, I think the bigger problem is that RECO didn’t do it’s job and was too busy empire building – swallowing the continuing ed from OREA. (RECO of course says that it can’t enforce the reg’s, only respond to complaints.)

    • Carolyne in Canada

      Perhaps an opportunity for Brian, “The real estate advocate.” When a brokerage has a multiple representation series of offers registered, whether in house or from outside brokerages, and the broker was not prepared to stand in at the face to face presentations, as in my historical situations, might it be useful to hire an “advocate” outside the industry (paid by the office) to sit with the seller, following presentation of each individual offer by the representing agents, to review each offer and deliver an unbiased opinion on as to how likely best for the seller to proceed? (Advocate having no prior knowledge of the offers, the contents, or the agents involved, either representing the seller or the buyer).

      It is obvious of course that a would be buyer in a multiple offer situation, of their own accord could hire “The real estate advocate” to advise prior to presentation of his offer, during or after.

      Not knowing any of the buyers, sellers or agents, would “The Real Estate Advocate” be able to fill that need, as the unrelated outsider? Not unlike the services of an unlicenced mediator in any arbitration issue (and you have experience in that field already), the advocate would merely be addressing the content of each offer construct, standing on its own legs.

      As I noted in a comment at REM’s Rui Alves’ article on this topic, it isn’t always or only the price that is the deciding factor, relative to which of the multiple offers is most acceptable to the seller or group of sellers.

      The example of an estate sale, or a “matrimonial disruptus” situation where an owner might prefer to accept a lesser dollar APS due to an ability of a buyer to be able to close immediately, or any of many in an offer, plausible reasons to accept.

      I have had multiple offer situations where my own buyer’s offer won out when offering only five hundred dollars above the listing price. (I had forever told my would-be listing sellers (and buyers too) not to tell me how much they would accept (or pay) when an actual offer would be in the midst.

      I truly didn’t want to know. This enabled me to deal only with tangibles, “with the paperwork,” in hand. I always told my clients/customers “let your signatured paperwork do the talking.”

      “Let your paperwork speak,” loud and clear. That way there will be no opportunity for misunderstandings.

      I never ever believed it is the agent’s job to suggest how much in dollars to offer on a property, likewise a listing price. I only provided a likely range of value using area comparables as a guideline in either case. The decision as to how much to offer was always at the discretion of my buyer, or accepted at the discretion of my seller.

      But many times knowing the likelihood of multiple offers for the seller to consider, it was always, without exception, that knowing this, the buyer would/should simply offer his “very best number” knowing his offer might not be acceptable, and no, the seller might not elect to negotiate. No rule says the seller cannot make an on the spot decision, or that he must counter offer.

      Although I never used one, there is always the option of writing a personal letter to the seller. If using this method, I would advise that the letter should not be shared with the representing agent(s), but rather be offered in a sealed envelope presented to the seller directly before the specific offer presentation. You can’t beat an agent face to face presentation in multiple offer situations. Always the best method of representation. Emailing and faxing offers, unless absolutely necessary due to a geographical distance issue, should perhaps be avoided in multiple offer situations.

      I once had a multiple offer situation years back, with two or three offers on a quite new listing. We entertained each offer without rushing each, and the property sold that night, firm, with no conditions.

      When I got back to my office, there was another offer in the fax machine. The agent for that buyer never pre-notified me he was preparing an offer and never connected to say he was registering, faxing an offer. His fax arrived as I put up the “sold” rider.

      I always messaged agents who had shown my listings that offer(s) had been registered, in case their buyer, having viewed the property, had any interest in offering, the agent should advise me. Just an industry courtesy.

      Was he “doing right” his buyer? He must have been very confident. In addition, I had to let my seller know, after the fact, just for the record: there was an accompanying fax letter from the agent (not from his buyer), explaining to my seller that surely they would accept the offer from his buyer, because clearly their agent (me) had subscribed to taking an overpriced listing that could as a result cause the owner to miss out in receiving an offer of any kind; that his buyer was serious and found this dollar amount (substantially less than the listing price) should be the right sale price.

      He even included a notation of a sale in the area at his offer price. But I had seen that property when it was on the market and it wasn’t a true comp. And lo and behold, to add insult to injury, the agent lived in the area.

      My listed property that evening sold over the list price in a less than aggressive market and the firm sale price was submitted to the Board that evening.

      I had trouble believing how foolish that seasoned agent had been. He missed out on a likely opportunity to have earned an approximate twelve thousand dollar commission, but more important, how could his reputation be substantiated. And the letter? Obviously he had instructed his buyer inappropriately?

      He should have known better than to fax such a foolish unprofessional letter that only served to make him look less than the seasoned agent he was, whose name was around for years. I could hardly believe what he had faxed, asking me to give it to my seller, along with his faxed offer, surely having received my message re at least one registered offer.

      I can’t help but say I took joy in faxing back to him, the time-stamped, highlighted, sold price (not a copy of the successful buyer’s offer of course) offered and accepted; just one of multiple offers my seller received. Each was slightly over the listing price. I think the generic term “egg on face” might have been the order of the day. The seller had chosen the offer where the co-op agent explained that the buyer had several children who would enjoy the floor plan.

      Couldn’t help but wonder what he said to his buyer, though, when the sale price would soon be public knowledge, wherein it would appear he advised his buyer that my listing was overpriced.

      Agents loved to sell my listings because they knew how hard I worked to keep “everyone” happy and in the loop: (no funny business) sellers, buyers, and co-op’s. Everyone knew they had been treated fairly. Even when I had my own offer, which could have made for a difficult situation, but didn’t. Always completely transparent without divulging private information.

      Carolyne L 🍁

    • Philip Kocev

      Thanks Steve (and others for posting). Completely agree it’s not always price, which is why it would need to be the key elements of the offer the “Seller” deems as “top” get disclosed, i.e price, closing date, conditions etc. This would give all competing offers a fair chance to decide if they want or can beat it.

      I’ll share an example from an agent who called me the other day where their Buyer lost out on a condo which had a high number of offers and their offer was actually $5K higher than the accepted offer (which turned out to be the listing agents Buyer, and apparently no one got a chance to re-submit). It’s likely because that offer was firm and theirs was conditional BUT this agents Buyer is furious because they weren’t given the option to remove their condition or improve their price further. With numerous offers on this property, the Buyer is left questioning why if they were so close didn’t they get the chance to improve and naturally suspicious of how it was handled since the listing agent’s offer was the one accepted. This is now likely going to turn into a RECO inquiry – which ends ups wasting time and resources over something that could have been clarified on offer night.

      With OREA and the governments recommended changes to multiple offers (and by the looks of it TREBs endorsement as well), NOTHING would have played out differently that night. Where as adding a transparency model all the Buyers would have felt better by at least being given the chance to improve and a very good chance that given how many offers there were the Seller could have received even more than they did from one of those competing offers.