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Real estate agents breaking the rules – Hidden camera investigation

This is marketplace real estate agents caught on camera ten agents ten hot neighborhoods bidding wars spark secret deals I think he purposely blocked our offer in this hot market is your agent rigging the deal I use my over we order you get land wait until you see how homes get sold down under this is your market place it’s a really nice houses here we’re out house hunting there’s not much that comes up on this street so it goes really quickly but we’re not actually looking for our dream homes all paid and all that said uh video we’re gonna have to ask the agent we’re undercover hidden cameras rolling on the lookout to see if real estate agents are breaking the rules oh thank you so much 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 to everybody whoops some money in Canada’s hottest markets that can be as high as seventy eight

thousand dollars on the average sale a huge incentive for agents to do what’s called double and 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 and 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 ten percent but for some 20 30 even 40 percent of their sales are double ended but the numbers don’t tell us though is how many of those sales are above board 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 neighborhoods all likely to end up in a bidding war nice to meet you to go 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 I don’t have a realtor yeah would that be a problem 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 okay the best thing to do is a hired professional who works in the area who can protect your interests but the majority are eager to

represent us yeah okay would that be helpful if I went through you yeah okay just commission-free represent us also the advantage of us situation for everybody signing us on is allowed as long as the seller agrees to it and it looks like they often do when we check some of Toronto’s hottest neighborhoods we find one in ten sales our double-ended what’s not allowed sharing the amount of competing bids with your own buyer but at this house we haven’t even finished our tour when the agent makes us this offer so we can help you only in the sense of okay knows so what can you do in a sense of like I can coach you kind of how what price to put what price to put does that mean he’ll help us make the highest bid I can help you for sure so this guy comes in a million 320 I can see guys too you know we need another 10,000 or something the 5,000 where that it did hmm beating the other guy like that

doesn’t sound fair to find out if a lines been crossed we head to the real-estate Council of Ontario by Calvin Murphy nice are you nice to meet you Calvin Kushi is Rico’s deputy registrar he’s in charge of disciplining agents if there’s ever a concern about how a trade transpires that’s what we’re here for we find that there’s non-compliance 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 she kind of her what price the part 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 yet 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 I was asking about signing up with you if that would be beneficial glitter it is why is that yeah okay and you’ll be able to share that with me well okay okay all right it’s a backroom deal over in 20 seconds but if he makes good on it could be the difference between losing the house making the winning bid we didn’t beg we didn’t plead it was yeah I’ll tell ya that obviously is a concern if that’s how they see that they’re representing the interests of both

sides of the trade this next agent boasts his team double lines all the time usually around 65 percent of our deals through residential pre-construction support our through double ending it so that’s a good number saturation and why might that be as good as dad to know if that could be beneficial for me yeah I just have an inside idea of what’s going on right so y’all keep you in the loop of everything 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 gonna do a first-time shot kind of a the highest you can go and you don’t get a second chance but even he will definitely give us a second chance that Roger sensor we will get a better opportunity we have our checks where we can you know just just on the borderline of legal well definitely we’ll definitely try to help you out there interesting can you believe this language tricks just on the borderline of legal well as this type of conduct in 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 but one after another they take the risk and promise to disclose secret vids oh does any kinky love me home

okay after only five minutes one agent even tells us the exact number were 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 three to five thousand dollar fine and then if there’s a recidivism or if there’s a repeat pattern we can go up to as high as $25,000 three or five thousand dollars on a house that is probably gonna go for more than eight ninety doesn’t seem like much are the fines steep enough well in our experience the fines are more than adequate 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’re looking for two years Wow we wanted to make sure we’re moving to the right house right the right area I’m pretty picky this is that this is the one what a property speedify this was supposed to be cabin Whelan’s forever home the perfect place to raise his family he lost this one yeah he was devastated when he discovered it sold to another buyer for 30,000 less than he tried to

offer this thing agent himself had also brought the buyer forward and that’s when we thought that’s why our offer wasn’t accepted what do you make of that I think he purposely blocked our offer so that he would get double Commission suspicious Kevin tracked down the owners that sold the house I told him that you know we were offering 30,000 over and he’s like what I said down we tried to get our offer true and and you’re you wouldn’t your agent wouldn’t respond to our pages he even said himself said well that’s ridiculous because my agent was in the office so there’s no reason that you should that got your pages 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 the owners who sold this house aren’t the only ones losing out studies show when the same agency represents both buyer and seller property sell for percent 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 that doesn’t stop this agent from offering to help us safe what we can ensure is that you’re not paying like a ridiculous price over what the next person is paying back we’ve seen hundreds of thousands of dollars spread between one offer the next and we can avoid that you know we can kind of imagine 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 interest in 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 okay come on at this house we expose another way agents break the rules to score double Commission shot other buyers out and rush our offer through I have control on both sides and you would be okay before any other offer comes to make it multiple offer situation I try to close the deal for you to understand him I use my father in or did you get that you use your white father this agent double-ended close to 40% of our 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’d be looking for maximum penalties really maximum penalties 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 and so as we just showed you is that everyone’s not working with honest well you’re gonna give me a list of those names aren’t you we’re not sharing names or showing faces that’s because we’ve been told behavior like this is industry-wide who knows how many others have lost thousands in profit or like Kevin the home of his dreams I said it was the perfect house cross but where I am trying to move on to where we are and our son is doing really well where darkness is this that was that was a house that was it to find a better way we’re going down under real estate deals like you’ve never seen before this is how it works you can’t afford to miss this 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 folks 50 these houses are up for sale you want to buy the house today this is how it works you better be the one holding that very last feed the crowds outside hopeful buyers making their bids boy buddy what bidding wars here happen right out in the open is gone in Melbourne hottest

neighborhoods about 90% of houses are sold by auction almost 1,000 homes on this day alone in on the action real estate agent an auctioneer Elliot Gill this really has been a pleasure over the last couple of weeks to bring this fantastic property to market he’s here with his team looking for the best price on the first of five houses they’ll auction today they called Melvin the auction capital of the world we love it because it’s really transparent and a buyer can see exactly what the competitors are doing the law prohibits false bids and prohibits bidders from attempting to prevent others from bidding and provides fines for this conduct yep no funny business here this is the one that used to be digging deep on folks another difference 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 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 nine hundred twenty forty I have now 60 can I my concern well this auction heats up at a million dollars there 20 would be your bid we meet the men leading the charge for consumer protection in real-estate Minister Viktor domina lo if we empower the consumer we have a stronger market place get this there’s no double ending down under Aussie lawmakers bandit more than a decade ago people are not confident in the transaction then that undermines the whole system 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 consumer saying why are you doing this it doesn’t exist now and I think that’s a good place to be and as for their open bidding if you were to suddenly tell Australians we’re gonna do away with the auction process what do you think their response or their reaction would be I think they’d be writing outside those guys right now no no writing here seems really fair because you can actually see who’s bidding I can get a feel for that there’s eight people interested in the property so when you think about that you want to resell it down the Chokey go gosh there’s strong interest in Canada we do things pretty differently yeah everything’s in secret that’s crazy that is so crazy it’s not bright easy yeah it’s very different I wonder we love Canada we love Canadians so you know more power that works does it seem strange seeing strange it’s got the

fantastic location but all the home really does need it’s your name on the contract here today auctions like this usually last about 15 minutes 15 tense minutes billion and 10 welcome sir right bead there’s your competition brought the set up Elliott and his team make sure no bids are messed in in 20 30 30 40 40 days 50 million 60 thank you had a million is sixty thousand price just keeps going I thought there’s a back in front seventy could be 71 72 73 74 75 the sellers are hoping to get over million 1 million $190,000 first time then second time for the 1/3 final court 5095 welcome would be 1 million 195 195 fierce competition $1,195,000 5 and a half for the half set 500 now it’s down to just two bidders 198 welcome back make it 1 2 set 1 99 1 million good bid sir needa let you know now sir welcome back one point two and a half I’ll call the property three times first will second core read and final call absolutely sure welcome back we take our findings to the government why not just get rid of double endings I would be hoping to the suggestion marketplace has got your back how not to buy a house on your

marketplace caught on camera real estate agents breaking the rules 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 is sort of what you’re asserting are prepared to be non-compliant with the rules perhaps we need to to tighten and what we’re doing on a cross the board basis as for the agents most tell us they did nothing wrong some say they were merely passing on their professional expertise but one admits it happens all the time so what’s reco gonna do about it turns out there’s not much they can do if people are finding themselves in that situation we welcome complaints 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 being having the resources to go out and look for misconduct or non-compliance so why not eliminate double ending certainly from from the perspective of the consumers that are hurt they want that gone and that’s really it’s something that the government really has to think seriously about and since the government has the power to ban double ending we take our findings to them Maggie frost Lalande is Ontario’s minister of government and Consumer Services does she think double lending should go the complaint system doesn’t work why not just get rid of it at this point what I would say is that Rico has that authority and that responsibility they told us that you’re the one to make give them the tools you’re the ones who sets the law sounds like you’re passing the buck to Rico and Rico’s passing the buck to you well um we have confidence in their ability in 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 consumer so the minister is okay with things the way they are but if you’re not Melbourne might be the place for you I want me in charge until aha : again the first possibly the final time are we done we’re selling the property no late surprises we’re selling song congratulations welcome to family this house sells for million out in the open for buyer and seller to see you are the seller yes and you were watching yeah we were actually watching through these flats here we could hear everything that was going on it was very exciting on this side of the world at least everyone gets a fair shake next week on Marketplace millions of followers dozens of daily posts Kim Kardashian on your phone talking to you but are they letting you into their lives or just cashing it about seventy five thousand dollars for a single post the murky new world of celebrity endorsement

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