New draft rules banning so-called double-ending by real estate agents are being met with chagrin from realtors, who say they knew the change was coming but that it could have some downsides for some home buyers.
The B.C. Office of the Superintendent has issued the draft rules barring agents from representing both seller and buyer in a transaction, though the service will still be allowed in remote locations underserved by licensed agents.
Re/Max agent Ed Ganeff said he isn't happy with all of the changes, but said he knew it was something that "had to come."
Unethical practices in the real estate industry, highlighted in news coverage, eventually prompted the province of British Columbia to create the superintendent's office in charge of regulating the province's 22,000 agents. Previously, the Real Estate Council of B.C. was self-regulating, controlled largely by realtors.
Mr. Ganeff said the turmoil has been detrimental to the industry and has eroded public trust.
The draft regulations, he said, "should hopefully give them some relief and knowing that they have a choice."
He noted the change will be a hard "startup" for realtors and without limited dual agency, he has to establish another way of assisting clients.
Mr. Ganeff said he probably will refer some of his clients to other realtors who he trusts and will serve the clients in a professional manner.
Ontario is also considering tougher consumer-protection rules for real estate agents, including limits on dual agency.
Vancouver real estate agent Steve Saretsky said he had "mixed feelings" about B.C.'s draft changes.
He acknowledged it's tough for agents to represent both parties equally but, he said, the new rules are placing buyers at a disadvantage if the alternative is no agent at all.
"Instead of buyers getting limited dual agency, there is no representation whatever and I think from a realtor's standpoint, they have no legal liability to that client, so I think the buyers are really at a disadvantage now than anything," Mr. Saretsky said.
Mr. Saretsky also addressed that although limited dual agency will be banned, double-ending still exists.
"There is a little bit of misconception among the public, too, that double-ending is over. It just means that double-ending from a limited dual agency's standpoint is over. But there is still double-ending. Any agency still can take both commission from the selling side and buying side; they didn't get rid of that," he noted.
Mr. Saretsky went on to explain that, while double-ending isn't banned, agents will have to disclose their commission to clients and note that they are not sharing it.
The B.C. Real Estate Association has been critical of the changes, saying real estate buyers' choices are going to be narrowed.
"Over my nearly 25-year career as a realtor, many long-standing clients have developed trust with me, and now my clients have no choice but to start from the beginning and build new relationships," the association's president Jim Stewart said in a release.
"Trust is a crucial part of what is often the largest 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 purchased and then resold multiple times for a higher price before the original deal closes.
A Globe and Mail investigation revealed such transactions happened often without the original seller being aware of them. The new guidelines include several provisions to require better disclosure.