Naughty Agent – Stories of Realtors Doing Bad Things Part III

Phantom offers. Ghost offers. An example of this is when the selling agent lies and says there is a second offer hoping to nudge the price of potential buyer.

What’s the penalty for that?

This and other real-life stories that went before the Real Estate Council of Ontario in this installment of Naughty Agent.

See the RECO decisions page https://www.reco.on.ca/complaints-enforcement/regulatory-activities-decisions/ 

Guest: Jennifer Scaife, Des Brown Real Estate

Email Jenn@DesmondBrown.ca

 IG   www.instagram.com/jenninthe6ix/

FB   www.facebook.com/JenniferScaifeRealtor/

Desmond can be reached at:

Web site https://inthe6ixrealestate.com/ 

Email des@desmondbrown.ca 

Twitter & Instagram - @desinthe6ix

Facebook page 

Transcript

Desmond Brown (00:00):

On this week's Sold in the 6ix, it's our latest edition of Naughty Agent. That's where we look at disciplinary actions that were given to agents by RECO. That's the Real Estate Council of Ontario, after they broke our real estate rules of conduct. And in almost every case, they did something very unethical and stupid. And in the end, it's always the consumer who suffers because of this bad behaviour.

(00:40):

I'm Desmond Brown, and today on Naughty Agent, I'm joined by my colleague and team member Jennifer Scaife. Jen, welcome back to Sold in the 6ix.

Jennifer Scaife (00:49):

Thank you very much, Des. I'm looking forward to it.

Desmond Brown (00:52):

Oh, I'm sure you are. We have a lot of fun with these, and I need to laugh at some of these, but because like I had said in the introduction is to consumer who always suffers, but some of the things our colleagues do. Oh my goodness. So anyway, let's get right into it. So a buyer is represented by an agent, and he's been looking for a home for a few months and had lost out on many properties, actually five properties in multiple offer situations. They find a property, they find another property, actually, and the buyer submits an offer on the property at $500,000, but is told by the listing agent that there is now another offer on the property.

(01:37):

So the listing agent actually tells the buyer's agent, there's another proposal, there's another offer on the property. The listing agent then tells the buyer's agent that she better sharpen her pencil and submit an offer as high as possible because they are now in competition. Sharpen that pencil. Right. Okay. So the buyer, I smell a skunk. Yeah, I know, I know. So the buyer who didn't want to lose out on another house, he instructs his agents that he's willing to offer another 35,000, so $535,000, and he wanted to have some money left over to do some renovations. He had a little bit more money, but 5 35 is what he put his cap on. So the offers submitted and his offer is accepted. Oh, that's wonderful. Isn't that great? Oh, so happy. Everybody's happy here.

(02:32):

And after it's accepted, the listing agent approaches the buyer's agent and says, do you think you could kick in a half a percentage point of your commission? Because my clients wanted to net out a little bit more than what they're netting out. She refuses saying the deals. Yeah. Good for her. Exactly. She refuses saying the deals already accepted and that the agreement to cutting commission was not in place before she submitted the offer on behalf of her buyer. So that's just one part of this. Okay. Okay. So a couple of days later, the buyer ends up speaking to the seller of the property that he bought and what's coming next, right? Yep, indeed. And he finds out that he is, well, his offer was the only offer, and that he was not competing against any other offers. So in essence, the listing agent lied.

(03:31):

Yeah. The listing agent lied that there was another offer. And I know we run into this, well, not that we run into Phantom offers a lot, but we run into a lot of concern by our buyers saying, well, how do we know there's another offer? Right? You say there's another two offers, three offers. How do we know? And in most cases, we just have to go with the faith that we have in our colleagues. We really do. I mean, they can lie to us, but in most cases, on almost every case actually, that I've dealt with there, I haven't had to deal with a phantom offer, at least that I know of.

Jennifer Scaife (04:07):

Right, right. Fair enough.

Desmond Brown (04:09):

So anyway, complaint is made to RECO, and during the hearing, the listing agent who lied about the other offer coming in said that he prided himself on his integrity and fairness, and that in the end, no one was hurt in this matter. No one was hurt. 35,000, nobody was hurt. Yeah. $35,000 doesn't hurt at all. Right. Then he blames the buyer's agent saying that she should have confirmed with his office about how many offers were registered. No. So yeah, let's get this straight here. The listing agent tells her that there's another offer, sharpen your pencil and come in with your best offer. And then he turns around and says, I have integrity, and you should have called my office to confirm how many offers were there. You should have called my office to confirm how many offers were registered

Jennifer Scaife (05:15):

To make sure I'm not a liar.

Desmond Brown (05:19):

And during that process, going back to the offer night, he told the agent that there was a lot of activity on the property, which he also said in the hearing. And then he turns around and says He actually didn't know if there were any other offers.

Jennifer Scaife (05:37):

Oh my God. Who is this person? Yeah.

Desmond Brown (05:40):

Oh, I know. I know. So then he goes on to add that the sellers were family friends and that he was charging them on his end just 1%. So a few extra thousand dollars on a purchase price. So an extra $35,000 on a purchase price wouldn't have made a big difference to what he earned in his commission. So why would he lie?

Jennifer Scaife (06:05):

Oh my.

Desmond Brown (06:07):

Then he says that despite the buyer paying well, $535,000, the buyer was getting a good deal because the final purchase price was below market value.

Jennifer Scaife (06:27):

God. So how did he determine, determine that market, value it, and then let his family member sell below?

Desmond Brown (06:37):

Yeah, exactly. Oh my goodness. So anyway, the panel finds him guilty, says that he breached the code of ethics. Of course he did. And by disclosing incorrect in insufficient information and knowingly and willingly giving reckless and inaccurate representation, what was he fined?

Jennifer Scaife (07:06):

He fined? Oh, God.

Desmond Brown (07:12):

Okay. It's got to be big time. Well, you're RECO, it doesn't matter what. Yeah.

Jennifer Scaife (07:15):

Yeah. 10, 10,

Desmond Brown (07:17):

10,000. You're right on. You're right on $10,000,

Jennifer Scaife (07:21):

Which is...

Desmond Brown (07:21):

Is $10,000. So twice what his commission would've been, because he was going to one 1%, so his 1% would've been $5,000.

Jennifer Scaife (07:33):

So at least it cost him out of pocket.

Desmond Brown (07:37):

But of course, the thing that really bothers me and you and anybody else who has integrity in this business is that this guy is a shark. He's a liar, and he's misleading the public, and he's giving all of us a bad name. And that's why people don't trust real estate agents.

Jennifer Scaife (07:57):

I was talking to somebody just this morning, the same thing. She'd had a bad experience and yeah, it's just crazy. It's crazy. And as human beings, we're more inclined to listen to and give airtime to the dramatic stories, the feel good stories. My agent was great. My agent stayed with me. My agent followed up after the sale. You don't hear those stories. You only hear the No. He reached over and stole five bucks of change.

Desmond Brown (08:26):

Yeah, I know. But at the same time, we got to hear about these bad stories, and we do get a lot of great reviews from our clients, and a lot of our colleagues get some great reviews as well. I mean, I have close friends that have other real estate agents that these other real estate agents and just love their agents and good for them. I'm happy for them because they have good professional agents looking after their best interest. But boy, when we are run into people like this guy, my God, it doesn't do anybody any good, obviously.

Jennifer Scaife (08:55):

No, no. Well, it's in, it's interesting too that his own family member unwittingly blew the whistle on him.

Desmond Brown (09:04):

Yeah,

Jennifer Scaife (09:04):

Right. That's woo...

Desmond Brown (09:06):

Well, he obviously wasn't communicating with him and saying, yeah, yeah, don't say anything. I told the other person that there was more than one offer. So if you're asked, tell them, just say, yes, there was more than one offer. Boy. Oh,

Jennifer Scaife (09:17):

No, no, no.

Desmond Brown (09:19):

Oh, okay. So that's that one. 10,000 bucks for being a complete idiot. Okay. The next case, and the next two cases we're going to go over here, it's the guys a repeat offender. And the next two cases, this is a different agent than from the first case we just talked about. But the next two cases, the guy is a repeat offender. So let's go over this and you'll see what this person did. So this agent has a home listed for sale, and he shows it to a potential buyer. So the buyer wants to put in an offer through him. So he offers the buyer customer service, which means that you have to treat them with fairness and integrity and honesty. Honesty in essence, representing both sides kind of right? Oh, yeah. Selling. Oh yeah, absolutely. The buyer. Yeah, but you still are, right? Yeah. So the buyer says, yeah, I like the property and I want to put in a condition of home inspection. But the agent says, look, if you put in a condition, it's going to negatively impact the offer and it probably won't get accepted. And then he says, you know what? And if you put in a condition, got somebody else that'll buy it, sell the property to somebody else.

Jennifer Scaife (10:34):

Oh, nice.

Desmond Brown (10:36):

So the buyers who don't want to lose out on this, they go ahead put in the offer, and it's accepted by the sellers. Now, when they were decided to buy the property, they relied on the information on the MLS listing, which described the property as having a concrete foundation, but it turns out that this was not true. So I guess this is a rural property. Anyway, the buyers take possession of the property, then they bring in their home inspector, just so they know what they're dealing with in the home that they bought. It's not a condition anymore. They bring in the home inspector later. And the home inspector discovers that the house does not have a concrete foundation. And it was in fact, a foundation constructed using pillars and posts. So probably wouldn't the buyers file a complaint with RECO when the agent is questioned by RECO?

(11:30):

He says that, yeah. He sold the sellers that house a few years ago, and he was obviously the agent who represented them when they were buyers, and he relied on the information from the old MLS listing when his clients bought the house. Oh, good. And in that old listing, it said that the foundation was concrete. I don't believe him anyway for saying this. Yeah, right. I don't believe him. But he also admitted that he didn't take the reasonable steps to confirm this information. Look, so, yeah, exactly. So anyway, the new buyers who we told not to put in any conditions, they end up selling the house a few months later at a loss. Oh, no. Okay. The agent is found guilty of violating the code of ethics, failing to protect the buyer's interest by submitting inaccurate information on the MLS listing. So he's guilty of misrepresentation, fairness, honesty, etc, our code of ethics stuff, and he's fine. What is the fine Jen?

Jennifer Scaife (12:36):

Oh my God...

Desmond Brown (12:40):

Yeah.

Jennifer Scaife (12:40):

15,000?

Desmond Brown (12:42):

Yeah. Well, you're close. It's $11,000. He's fined for this. So you have an ethical real estate agent who found you a great house, but the house needs a little bit of work. So you want to find a construction company to help you do a renovation. Well, I recommend getting in touch with outstanding construction. Outstanding construction can help you with every aspect of the renovation process. To get in touch with them, you can email them at info@outstandingconstruction.ca or visit their website outstanding construction.ca. I don't know what the loss was. They didn't say what the loss was for the buyer when they resold the property, but still, again, another example of somebody who's lying through their teeth and misrepresenting the public, just wanted to get the deal done and move on and did not give a damn about the buyer.

Jennifer Scaife (13:51):

Not a bit. Not a bit, yeah.

Desmond Brown (13:55):

Damn. Not at all. And okay, let's move on to the next case with him, where he represents us, where he's representing a buyer now. Now he's not the listing agent, but he's representing a buyer and he shows his clients a property. They like it. He writes up the offer for them, and they sign it electronically now, and the offers are supposed to be presented the next day. Now pay attention of what the numbers I'm going to give you. So his buyers are going to offer $431,000. 4 31. Okay. This is a community down in southwestern Ontario on offer date, about a half an hour before the presentation, the listing agent calls the buyers, oh, sorry, let me go back. Sorry. On offer date, about a h half hour before the presentation, he calls his buyers and goes over the offer process and tells them it looks like they're going to be competing against other offers.

(14:55):

The buyers say, look, we really need this house. We really want this house. And they tell their agent that, go ahead, change the offer or keep it the same. So they're giving him permission to go ahead and change the offer of whatever he wants to do or keep it the same. So the agent says, okay, but we see there's a problem here. The agent should have told his client that he's not allowed to do that. You can't change somebody's offer. Right. Okay. So that's where the first problem comes in. So just be, yeah. So just before sending the offer to the listing agent on behalf of his buyers, the buyer's agent inserts a new first page of the offer. Oh, right. A whole new page after it's been signed and before he sends it. Yes, exactly. So remember, it was 4 31 is what his client signed.

(15:51):

Now he sends a new page with 4 25 5, and the new page has the electronic initials of his buyers. So he obviously got them to initial a blank page beforehand and then wrote in a new purchase price. So that's the next problem. The new offer was not personally executed by the buyers. So he submits to 4 25 5 and tells the listing agent when he submits it, my clients would be prepared to improve their offer if need be. So anyway, they compete and the house sells for 4 26 7 to the competing offer, 4 26 7. Now, keeping in mind that he originally had the 4 31 that he did not submit, but the house sells for 4 26 7, he's not given a second chance to go back. And sometimes agents don't do that. It's like you come in with your best shot and that's it. Okay. It's a seller's call. Yeah. Yep. So he's informed by the listing agent that he has lost and that the is then that the sellers have accepted another offer.

(17:04):

So this agent, he then texts his buyers and tells 'em that their offer was not accepted and that the final selling price was 4 46 7. So he lies to them. Instead of saying that the actual selling price was 4 26 7, which was less than the 4 31 that they wanted to submit, and he submitted 4 25 5 on their behalf, he tells 'em that the actual house or the actual selling price was 4 46 7. And the buyers say, oh yeah. The buyers say, oh yeah, you're right. 4 46 7 was too much for us to pay. And they take the loss of the house honorably. They didn't get it. Okay. So later that evening, the buyers somehow contacted another agent and found out another other agent was not involved in a deal, but they find out that the house Ashley sold for four twenty six five. So they call up their agent. Oh my goodness. They called their agent to ask if it's true. They say, did the property really sell for 4 26? For 4 26? And he denies it. And he says,

Jennifer Scaife (18:16):

Oh my God. That can't be true.

Desmond Brown (18:19):

Yeah, yeah. He says, that can't be true because I submitted 4 31 on your behalf, which he didn't, and they would've taken yours so they couldn't have sold for 4 26. So the next morning, the buyers send the listing agent a copy of the offer that they signed for 4 31 and say, why wasn't this offer accepted last night?

Jennifer Scaife (18:47):

Oh my God.

Desmond Brown (18:50):

Isn't that so?

Jennifer Scaife (18:51):

Right. Oh my God.

Desmond Brown (18:52):

Oh God. And he says, I'm sorry, but the offer that I received on be half of you from your agent was for only 4 25 5. And that's why we accepted the offer for 4 26 5. Okay. This guy is quite the agent, isn't he? Oh, so he's found guilty of breaching the code of ethics. Of course. Inaccurate representation, fraud, unprofessional, unprofessional conduct, etc, etc.

Jennifer Scaife (19:23):

Right? Yeah.

Desmond Brown (19:25):

Penalty. What would it be? Geez,

Jennifer Scaife (19:28):

What is that penalty?

Desmond Brown (19:29):

Boy, I've seen you. You're rolling your eyes here. Oh my God. Everybody knows Jen. You got to know. Jen follows the rules. She is by the book boy, everything that we do.

Jennifer Scaife (19:43):

Yeah. And that's why these finds are never enough. So finding some random dart on the board is kind of hard. Yeah, I know. But what do I think Rico charted for that for multiple infractions on one transaction?

Desmond Brown (19:58):

Oh my goodness. And

Jennifer Scaife (20:01):

Please tell me it was 20.

Desmond Brown (20:03):

Yeah, I wish it was that high. It was only a penalty of $14,000. And of course, this guy is a repeat offender. I mean, I'm going to go through the cases and see if I find his name again, but those are two in a row right there that we just covered with this guy.

Jennifer Scaife (20:17):

That's amazing. That's funny because that's what I was thinking when I was looking through cases too. Yeah. I was thinking, ah, it would be interesting just to see, because I think that I see the same name, but yeah, I don't, yeah. Yeah. It's the same case. Yeah.

Desmond Brown (20:29):

So anyway, again, this is someone who we don't want in the industry. We'd rather have him out and with multiple offenses, I think they should revoke his license. I really do. Revoke

Jennifer Scaife (20:43):

Is ridiculous. Very least crank up the crank up, like having an fee of fine, an escalating fine the first

Desmond Brown (20:50):

Time something really, really hurts.

Jennifer Scaife (20:52):

Or even if you make three infractions, violate three code of ethics, then it's like a per violation.

Desmond Brown (21:04):

Yeah, exactly.

Jennifer Scaife (21:05):

And then it escalates in the other column for repeat offenders.

Desmond Brown (21:09):

Yeah. I have to agree with you. Hey, I know our producer, Doug is listening in here. Doug, what did you think of these of this guy with these last two cases?

Doug Downs (21:16):

See, it just reinforces any negative stereotypes people already have of someone who is their access point to information that realtors are flimsy and shady. And if you have a negative stereotype going in and it just reinforces it and probably passes it down to generations.

Desmond Brown (21:35):

Yeah, definitely true.

Doug Downs (21:35):

Because people will tell their kids when they're buying homes, Hey, watch you don’t trust everything the realtor says, stuff like that.

Jennifer Scaife (21:42):

And why bother paying full price? Go for discount.

Desmond Brown (21:45):

Yep. Yeah, exactly. You see this, you see this in the comments sections. Every time you see an article about an agent doing wrong in the comments section from the general public just saying, yeah, if there's scumbags anyway, why would you think that they would do anything less than what they did?

Doug Downs (22:02):

And there will be people who choose to DIY or at least try to DIY. Yes. Selling or buying a home. Right. And that's not good. That leads to all kinds of problems as well.

Desmond Brown (22:12):

Yeah, exactly. So those are our cases this week of Naughty Agent, and I know we couldn't talk the one that we had in our last episode where the agent moons has Moon, the other agent, because he was really mad that she wouldn't have in the driveway respect her. And I know, but that doesn't happen every day. And believe me, I'm trying to find another case like that, but I can't. But I hope. Good luck. Those of you who listen today to this podcast of Naughty Agent, well just beware. There are some agents out there that operate like this, but find an agent who comes highly recommended and who has integrity and values.

Jennifer Scaife (22:55):

And you're going to best get that by a referral.

Desmond Brown (22:58):

You're absolutely right. Yeah, exactly. Yeah, right there were a lot of us out there.

Jennifer Scaife (23:01):

Somebody who already knows what you're doing.

Desmond Brown (23:04):

Okay, so this Jennifer Scaife, my colleague and team member here at the Desmond Brown team at ReMax Hallmark. Thank you very much for joining us again on Naughty Agent.

Jennifer Scaife (23:13):

Thank you, Des. It's been fun again. Yeah,

Desmond Brown (23:16):

Once again for sure. And we'll do this again next month. Thank you. Bye. Okay,

(23:23):

And that's our latest episode of Sold In The 6ix. And like Jen says, there are a lot of real estate agents out there that are fantastic, and the best way to meet one is through a referral. I'd like to thank my producer, Doug Downs for this latest episode of Sold in the 6ix. And if you like this episode, please feel free to subscribe, leave a rating and a review and send it on to a friend. If you need to get in touch with me, you can email me and my email address is des@desmond brown.ca. And feel free to follow me on all of the social media platforms. My handle is Des in the 6ix, and it's the number 6 ix, and I'm on all of them. Instagram, Facebook, LinkedIn. Until next time, I'm Desmond Brown.