Higher fines of up to $250,000—instead of the current $10,000 ceiling—would discourage realtors from engaging in deceitful practices like dual agency, says an advisory group
In an effort to combat the increasingly frequent incidents of realtors representing both buyers and sellers in the same deals, the British Columbia real estate council's advisory group recommended the imposition of more severe penalties.
William McCarthy, a participant in the advisory group and a previous president of the Institute of Real Estate Management, said that higher fines of up to $250,000—instead of the current $10,000 ceiling—would deter realtors from engaging in deceitful practices like dual agency.
“How can one person serve two masters? It's a perpetual conflict of interest,” McCarthy said, as quoted by Lien Yeung of CBC News.
McCarthy’s comments referred to the recent case of Lin (Kelly) Kong, who was slapped with a 90-day suspension earlier this month along with a $1,500 fine—an amount which McCarthy described as a “pittance” compared to Kong’s possible $37,000 commission from a double-ended deal.
Usually, commissions are around 7 per cent for the first $100,000 of the sale price, and then 2.5 to 3 per cent for the remaining amount. Latest figures from the Real Estate Board of Greater Vancouver placed the benchmark cost for a detached home at $1.4 million.
“If you look at this case in particular, the agent in question took a deliberate attempt to not only act as a dual agent but to cover up the facts,” McCarthy said.
Other quarters have denounced such a proposal as unnecessarily harsh, however.
“Part of the benefit of a good Realtor is that they've got a good network,” UBC housing economics professor Tom Davidoff said.
“Double ending is a tough one because exploiting your network to bring in a buyer isn't inherently a bad thing,” he added. “Banning it can get rid of some legitimate transactions.”
Davidoff instead suggested the implementation of an atmosphere that encourages mandatory disclosure, which would allow both buyers and sellers to make informed decisions on what they want.
Related Stories:
Investigation reveals proliferation of private condo sales in Vancouver
Ontario brokers cited for fraud
William McCarthy, a participant in the advisory group and a previous president of the Institute of Real Estate Management, said that higher fines of up to $250,000—instead of the current $10,000 ceiling—would deter realtors from engaging in deceitful practices like dual agency.
“How can one person serve two masters? It's a perpetual conflict of interest,” McCarthy said, as quoted by Lien Yeung of CBC News.
McCarthy’s comments referred to the recent case of Lin (Kelly) Kong, who was slapped with a 90-day suspension earlier this month along with a $1,500 fine—an amount which McCarthy described as a “pittance” compared to Kong’s possible $37,000 commission from a double-ended deal.
Usually, commissions are around 7 per cent for the first $100,000 of the sale price, and then 2.5 to 3 per cent for the remaining amount. Latest figures from the Real Estate Board of Greater Vancouver placed the benchmark cost for a detached home at $1.4 million.
“If you look at this case in particular, the agent in question took a deliberate attempt to not only act as a dual agent but to cover up the facts,” McCarthy said.
Other quarters have denounced such a proposal as unnecessarily harsh, however.
“Part of the benefit of a good Realtor is that they've got a good network,” UBC housing economics professor Tom Davidoff said.
“Double ending is a tough one because exploiting your network to bring in a buyer isn't inherently a bad thing,” he added. “Banning it can get rid of some legitimate transactions.”
Davidoff instead suggested the implementation of an atmosphere that encourages mandatory disclosure, which would allow both buyers and sellers to make informed decisions on what they want.
Related Stories:
Investigation reveals proliferation of private condo sales in Vancouver
Ontario brokers cited for fraud
