Desmond Brown

Ban on Double-Ending Coming to Ontario

04 December 2017
Desmond Brown

A couple of years ago I listed a property in North York. It had been in the same family for more than 50 years and the house sat on a premium lot with a 40 foot frontage. The property was an ideal opportunity for a builder. We listed it for $1,199,000 on a Friday and set a date to review offers the next Tuesday,.

To my surprise, by the time Tuesday rolled around 15 agents had registered offers. On that same morning, I got a call from a gentleman who said he wanted to buy the house, but would only deal with me because I was the listing agent. I told him to meet me at my office at 10AM and that offers were going to be presented at 11:30AM.

When the potential buyer showed up at my office, he told me he hadn't even seen the inside of the house, but had driven by it. He gave me a bank draft for $100,000 as a deposit and said, "I want this house and I'll pay more than anyone else. You present my offer after you've looked at all of the other offers, and tell me what the highest offer is. I'll pay more."

I told him I wasn't allowed to do what he was asking. I explained that he would have to go through the process fairly by submitting his offer blindly with his best bid like everyone else. The gentleman couldn't understand why I would pass up an opportunity to get both ends of the commission - the Buyer's end and the Seller's end, also known as double-ending - by insisting he play the game like everyone else.

Vancouver recently passed a new measure which will ban real estate agents from representing both the buyer and seller in a transaction. There are reports that the province of Ontario will be implementing a similar rule in the new year as well.

When our market was booming and there were multiple offers on many homes, some listing agents acted unscrupulously when the opportunity arose to double end a property. In our blind bidding process, some of these agents would tell their own buyers how much they would need to pay to get the house. Meanwhile, the agents representing clients who submitted offers and trusted they would be treated fairly, got screwed.

The new rules coming to Vancouver and Ontario will protect the public, especially in a crazy market. But what happens when things return to normal like it is in almost every other market in the country except Toronto and Vancouver?  

Sometimes our marketing efforts will find a buyer who will submit the only offer on a home. In these situations, agents should be able to bring the buyer and seller together to work out a deal. After all, people hire us to market and sell their properties. A good agent will facilitate a deal that is fair and beneficial to both parties.

So, you may be wondering what happened to the gentleman who walked into my office. I refused to deal with him and introduced him to my manager who agreed to submit an offer on his behalf. He went through the process fairly and actually won the bidding war, beating 15 others by offering $400,000 more than the asking price. I thought he overpaid, but as he said to me, he really wanted the property.

Instead of demolishing the house and re-building, the new owner rented it out when he took possession. He texted me last May to tell me he had sold the house. It was just 18 months after he bought it and he landed an unbelievable $1-million more than he paid for it!