TorontoRealtyBlog

Have you heard about the new Trust In Real Estate Services Act?

“TRESA” came into effect on January 3rd, 2024, and I’m of the opinion that it’s going to take quite some time for the new legislation to be absorbed by the real estate community, if it ever is – at all.

The intent of the legislation is pure: hold real estate agents to a higher standard.

Lovely!

But just as with the previous legislation, or virtually any rules and regulations in any industry, the rules are only as effective as the enforcement.

In this case, TRESA, as with REBBA before it, relies upon real estate agents to abide by the new rules.  But I’m of the mindset that if there were “bad actor” agents before TRESA, there are going to be bad actor agents long after…

I’m not a complete pessimist though.  I do think that the new legislation will help with consumer protection, so long as an overwhelming majority of real estate agents abide by it.

I don’t actually want to get into TRESA today, since there are still thousands of agents on Facebook groups trying to understand the real-world applications (and I don’t mean this by insult – these agents are doing good, trying to understand legislation that has left gaping holes in the “do’s” and “don’ts”), but rather I want to tell a story from last summer about an experience that a client of ours had with her previous agent which underscores the need for greater consumer protection, as well as enforcement, and discipline.

I say “a client of ours,” but this was not a client upon our first interaction.

In fact, I did what I could to avoid being this person’s agent, for fear of being accused of “interfering with a competitor’s Listing.”

To be blunt: I don’t want or need a listing that is currently under contract with another real estate agent.  I have long maintained that there are no shortcuts in this business and that your reputation among the public and the agent community is more valuable than anything else.

And at the risk of sounding cheezy, the reason I ended up taking this listing was because I was so disgusted with what the previous listing agent did to this person, and her mother, that I truly wanted to help.

I received an email one day from a woman who we’ll call “Jill,” through our contact form on the Toronto Realty Group website.

The form she filled out was actually on the Staging Expertise page, which makes sense, given why she had been searching “staging,” but we’ll get to that in a few moments.

I called Jill and she talked about listing her mother’s condominium for sale, and I asked questions and provided answers for a short time before Jill told me, “It’s currently listed with XYZ Brokerage.”

I immediately said, “Jill, if you’re under contract with another agent, I can’t talk to you about this.”

In actual fact, I can speak to an individual who is under contract with another agent, so long as they call me.

But as a best practice, I try not to speak to anybody under contract.  Many agents do, I just choose not to.

Jill said, “But I want to get out of this contract, you don’t understand.”

“I read your blog,” Jill said.  “You tell all these stories, you seem to give people advice.  I need that right now!”

Jill then proceeded to regale me with a long story about just how awful this listing agent was.

It was pretty bad but not all that surprising, given the amount of bad actors out there.

I do tell stories here on TRB about bad actors but I don’t tell all of them.  Other real estate agents and brokers who read TRB often don’t like the stories, since people often paint us all with the same brush, and from time-to-time, I see comments on these posts from people who use it as an opportunity to pile on me as well.

When you hear the phrase that ends with, “…..is a dirty business,” you can apply this to thousands of industries or occupations out there.  In this case, if I ever heard somebody say, “Real estate is a dirty business,” I would use this story as an example of why.

Jill told me that her mother was going to downsize from the condo she’d been in for fifteen years to a retirement community that had been calling her for years now.  It was only a matter of time, and it seemed like last summer was, apparently, the “right” time.

Neither Jill nor her mother knew anything about real estate and they didn’t know any real estate agents, but Jill’s mother got a referral from a friend at church and she and Jill decided to list with this gentleman, who we’ll call “Ed.”

Ed listed the property for sale and it was a classic “do nothing, charge less” business model.

No staging, poor photos, no virtual tour or floor plans, no status certificate, no social media, no marketing, a listing brokerage that forwards calls to a call centre, and your typical MLS write-up that said something like, “Great Opportunity In Toronto!”

I always laugh when agents feel the need to specify the city in which the property is listed, as though that’s a novel marketing idea.

Ed told them to list the property at $599,900 to get $650,000, which was a mistake for several reasons.

First, there hadn’t been a sale over the list price in twelve months, so this made no sense.

Second, if you really wanted to get $650,000 for this unit, then pricing at $499,900 might get you there; but pricing at $599,900 wouldn’t.  Does that make sense?

After the offer night failed, Ed told them to increase the price to $699,900 and “wait and see.”

They waited.

Months, they waited, and there was no action.

After several months, Jill asked for a copy of all the showings that had taken place on the unit and Ed gave her a copy.

But more than half of the showings said, “canceled.”

Jill asked why these showings were canceled, and Ed told her, “I need to be present for every showing and those were showings where I couldn’t make it.”

Jill told Ed, “We never specified that you had to be here for showings.  The unit is vacant.  You don’t need to be here; we would rather have more showings!”

Ed replied, “Listen, you’re not the one with experience selling real estate, so trust me on this.”

Jill figured that she, in fact, didn’t have experience selling real estate, so she should simply listen to Ed.

After months on the market, Jill called Ed and said, “We would really like to stage the property.  We think it would help with marketing and we’d like to get some professional photos done.”

Ed disagreed and said it was pointless, but Jill persisted.

Ed told her, “Okay, I will personally stage the condo, you don’t worry about it,” and one week later, the condo was staged with some second-rate furnishings and some second-rate photos accompanied the new look on MLS.

One month later, they received an offer on the property, which Ed told them to consider.

But here’s the first major red flag:

It wasn’t until they were going to sign the offer back that Jill noticed Ed was also representing the buyer.

Jill asked me during our initial call, “Shouldn’t this have been the very first thing he told us?”  I agreed with Jill, but carefully, as I was still very uneasy about having any conversations with a seller under contract, but we’ll come back to this in a moment.

The offer had three conditions, each for ten days, and Ed was pushing hard for them to work with the offer.

But then a second offer was registered, and Jill said, “Ed almost seemed…..upset.”

“We thought this was a great opportunity for us to leverage the first offer, but Ed said the second offer was garbage and that we should kick them to the curb right away.”

This is when Jill said she started to feel weird.

“He stopped calling me,” Jill told me, “And started to call my mom directly.”

She added, “My mother is the legal owner, but she’s in her 80’s and up until this point, Ed had only been speaking to me.”

It was at this point that Jill started to look around, speak to other agents, research online, and eventually decided that Ed wasn’t the right agent for her.  She just didn’t trust him.  Whether it was his flip-flopping on staging – and demanding to stage it himself, with his own stuff, or whether it was pushing Jill and her mother on the offer that Ed, himself, was representing, Jill no longer felt comfortable with Ed.  Plus, it had been four months now.

Not only that, Jill started to feel that the reason Ed had canceled all those viewings was because he was holding out hope that he could bring his own buyer to the property!

Jill went to Google and started to search for “how to get out of a listing” as well as “multiple representation” and “staging,” and she somehow stumbled upon Toronto Realty Group and our page about Staging, and that’s how she came to call me one day last year.

After telling me the story above (in much greater detail, obviously), Jill asked, “How do I get my mother away from this guy?  I don’t trust him.  I don’t want to deal with him anymore.”

I was in a tough position.

I mean, technically, I could tell Jill exactly what to do.

The rules are simple: if a buyer or seller under contract call you, then there is no “interfering with a competitor’s listing.”  I suppose there’s always an exception to this rule, ie. if you tell the person on the phone that this agent is a serial-killer and you do so in writing, but you know what I mean.

I told Jill, “I don’t solicit buyers or sellers who are already under contract,” but Jill pleaded with me, “You’re not soliciting me, seriously.  I’m going to get out of this listing and hold off for a few months on finding another agent.  I just need some advice.”

Advice?

I suppose I could do that, right?

I told Jill, “Just call Ed and say that you want to end the listing and see what happens from there.”

That’s not breaking any rules and it’s the most basic advice that I could possibly provide.  So that was that!

But a few days later, Jill called me and said:

“Ed told me that I wasn’t allowed out of the listing.  And now he changed the lockbox code so I can’t get into the unit.”

Oh boy.

That’s a new one!

I’ve never heard of an agent changing the lockbox code so that a property owner can’t access his or her own unit!

“I don’t have another key to the unit and neither does my mother,” Jill told me.

“What am I supposed to do?”

She explained that Ed yelled at her for fifteen minutes when she said that her mother wanted to terminate the listing and that Ed had made some unfriendly remarks, which bordered on threats.

At this point, I really, really didn’t want to get involved, but I felt bad for Jill.

“Can I speak to you in hypotheticals?” I asked Jill.

She said that was fine.

I explained, “When a seller under contract wants to end the contract, there are two forms to consider: OREA Form 242 is the Cancellation of Listing, which requires both signatures of the seller and the listing brokerage, and OREA Form 241 which is the Suspension of Listing Agreement, and only requires the seller to sign.”

I explained that any seller can sign a “Suspension of Listing” and have the listing suspended on MLS within 24 hours.  The seller just can’t re-list the property with another brokerage until that listing has expired.  But if the seller wanted to be able to re-list, then the seller would need to have the listing brokerage sign the “Cancellation of Listing.”

Jill asked me where she could get the forms and I said, “I’m just speaking in hypotheticals here, so I don’t want to be involved,” but Jill said that she was resourceful enough and would find them.

Jill called me a few days later and said:

“You won’t believe this.  My mother signed the ‘Suspension of Listing’ and Ed told me that it wasn’t valid because he had to witness the signature, but that he was away for two weeks and wouldn’t be able to meet with us.”

That, of course, was utter nonsense.

But any way you slice it, this was getting really, really messy.

She said that Ed yelled at her again, and then sent a bill for $5,000 for staging, even though he staged the property himself, and there was never a discussion between Jill, her mother, and Ed about the cost of staging and that Jill and her mother would pay for any of it!

Then Ed threatened to sue Jill and her mother for the cost of staging.

Jill told Ed that he did not need to witness her mother’s signature, and that only one person needed to sign the Suspension of Listing to make it valid – the seller!

But then Ed told Jill, “Fine, but the person who processes these documents isn’t in the office for the rest of the month.”

That, of course, is worse than the first excuse!

A short while later, Ed called Jill’s mother to say that he had an offer on the condo, but that he would only present it if they could all sit down and meet in person.

Jill told Ed that it was his job as a listing agent to convey the offer (she had learned a few things by reading up on it!) and that Ed couldn’t dictate how, when, and where that offer would be conveyed.

Then Ed went silent.

Jill continued to email and call Ed about the Suspension Of Listing but Ed ignored all the communication.

All the while, Jill still couldn’t get into the condo, since Ed had changed the lockbox code.

Jill explained all of this to me during a subsequent phone call and begged me, “What can I do?”

I told Jill:

The listing does not belong to Ed.  The listing belongs to Ed’s brokerage.  Every brokerage has a Broker of Record, and although this is a small, discount brokerage who likely doesn’t have a manager of any kind, there is a Broker of Record.

Jill read between the lines.

She called me one week later to say that she found the contact information for the Broker of Record as well as some other “higher-ups,” as the brokerage was a franchise and there were bigger players.  Jill emailed a copy of the Suspension of Listing, signed and dated by her mother, and said that she wanted confirmation of the suspension within 24 hours, as per TRREB rules.

And it worked.

The listing was suspended.

There were still four weeks left on the listing, but it didn’t matter.  Jill and her mother were free of Ed.

Well, they were almost free of Ed.  After all, they needed access to their keys!

Jill responded to the email – with all those “higher ups” CC’d, and Ed’s name present as well, and said that she wanted access to her lockbox.

Oh – by the way, this was her lockbox.  Did I fail to mention that?

Maybe that’s the craziest part!  This wasn’t even Ed’s lockbox!  Yes, he changed the code, but Jill was the one who put it in place!

Ed finally responded to Jill and said, “I will exchange the unit key and FOB but I want my ‘Please Remove Shoes’ sign.”

Huh.

Those signs are $4.50 each through the TRREB store.  The smaller ones are $3.75.

Ed was now holding unit keys hostage for less than the price of a Starbucks coffee.

Eventually, the suspended listing expired.

A few months passed, and Jill called me up.

She asked me if I would consider meeting with her and her mother and hearing about our listing process, and I agreed.

Chris and I went to the condo and met two kind people who had an awful experience in real estate but who desperately wanted to trust somebody and find a real professional.

We took the listing and did what we do best.

We received multiple offers on the condo, and while suddenly I feel like the subject of an awful radio advertisement that makes me scoff and change the channel, what can I say?  We did a better job than Ed, but that’s not exactly stepping over a very high bar.

Talking to people who are under contract is a very delicate balance and I certainly hope that the people reading this give us the benefit of the doubt.

As I said, I didn’t want or need this listing.  I wanted to help somebody who was being bullied by an awful, unprofessional, sleazeball.

But in the end, it was great working with Jill and her mother!

If only we could have been their first call and not their second…

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