Over the past two days Re/Max agents from all over Canada assembled themselves for our annual Kickstart event, I enjoy attending these types of events as it allows me to network with colleagues from different parts of the country and sometimes even with agents from oversees.
I am happy to report that I took tons of positive information from the event and met lots of great people as well; the biggest and greatest thing was that a TD Canada Trust economic analyst gave a positive outlook for the Toronto real estate market for the next year and half or so.
Sharing with other agents can be beneficial for all including all of our respective clients, and after all this is why these functions are held. Over lunch today I split bread with a first year Realtor from Ottawa and I know he took something positive from the hour we spent together. This guy is young and ambitious, but inexperienced. He asked if he could pick my brain about a few things and I obliged.
His questions revolved around how to obtain listings at 5% as he is having trouble closing for the market rate. The conversation evolved and he revealed that he doesn't co-operate with other agents while marketing the property as a Mls listing, what he is doing in a nutshell is; signs a listing agreement at a discounted rate and promises the seller that the property will be promoted on Mls but he doesn't explain the rate of commission that he is paying to the buyer agent. He in essence is only promising to pay $500.00 to the buyer agent, now this is well below what the market norm is. He later went on to ask why other agents are not showing the property which in turn is not helping sell the home.
I explained to him that his practices were not ethical for not disclosing to the seller that he is choosing not to co-operate with buyer agents at market rate, and that most agents are not showing the home as they are also acting in an unethical manner by not promoting a home to their buyer if the property fits their clients buying requirements. You can say that he had no clue what I was saying and that he didn't see a conflict of interest with his strategies.
There is a huge conflict of interest with this practice as the Realtor is putting his interests above his principle, in which is a big no-no in our industry. The other conflict happens when a buyer agent notices that he or she will not be paid market rates and they discourage the listing to any potential buyers that may be interested in the home, another big no-no.