Real Estate: The end of the realty double-ender
Getting rid of dual agency a good start, but tug-of-war continues
Real estate agent Jamie Dempster supports move to end dual agency
The provincial government is set to ban dual agency, and the move is being greeted with approval, although some suggest more needs to be done to evolve the industry. The practice currently allows real estate brokers to represent both buyer and seller on some home sales, and critics have called it out of date due to its lack of transparency and the opportunity it presents for unfair practices.
The ban would bring Ontario in line with provinces such as British Columbia, Alberta, Nova Scotia and Manitoba, where similar rules are already in place or soon will be.
“Basically, every other profession has something like this in place. I think we need it. I do feel this is necessary,” said Jamie Dempster, a broker with Re/Max in Toronto, of the dual agency ban. “I support the Real Estate Council of Ontario in this effort. They have to move forward and make sure this happens. I think it’s time.”
The proposed dual agency rule changes surfaced in the 16-point plan Ontario’s Liberal government announced earlier this year, which includes the 15 per cent foreign buyer tax and new rent control measures that are now working to cool an overheated Toronto housing market.
“Where I work, we separate the two [buyer and seller] and give each client personal representation. By passing off the buyer to another agent you’re adding another level of protection,” said Dempster.
James McKellar, a professor and director of the Brookfield Centre in Real Estate and Infrastructure at the Schulich School of Business, said the real estate industry has suffered from a more general lack of transparency, not just with dual agency.
“There are many who have been in the industry for a long time who are honourable,” he said. “But the industry attracted a lot of new people over the past several years, and there may be some who have been looking out for their own interests in some cases.”
For example, McKellar said the tug-of-war between the real estate industry and government over transparency concerning the province’s exclusive listing service, MLS, might also be dealt with in the current round of regulatory review.
“There has been a long simmering battle over [the Ontario] MLS to make it more like the U.S. [MLS] system, which is open. They have held back information,” said McKellar. “But by not bringing the industry into the 21st century and providing transparency, they have left themselves open to digital disruption,” he said, referring to the potential of someone with an app circumventing the MLS process and disrupting how information is protected. “Think about what happened to the taxi industry. They refused to change and then got hit with Uber.”