Real Talk!

There is always media attention around the business of buying and selling real estate. Lately, there has been a lot of press surrounding what is being called “Phantom Offers”.

A recent article in the Toronto Star, cited some consumers who have complained that they made offers on properties that had been on the market for an extended period of time and then, suddenly, when their offer was registered, they were informed that another offer had just been registered as well.

Is there really another offer? There had better be. If there isn't, and it's just a big fat lie, it's a phantom offer and it is against the law.

Notice of more than one offer puts the Buyer in a position of competing on the purchase- which usually means they must tender offers with fewer conditions and their highest price, among other things. So the accusation is that a fake offer is announced by the unethical as a tactic to trap the unwary consumer into paying more and investigating less. Highly unethical!

In a Toronto Star article, dated September 15, 2007 stated that “while no statistics are kept specifically involving phantom bids, the Real Estate Council of Ontario documents – obtained after a request by the Star – show the council received 60 complaints about bidding processes in the year ending March 31, 2007”.

Hmmm, “the bidding processes”… not exactly phantom offers.

My recent copy of REM (Real Estate Marketing) quotes Maureen O’Neill (Toronto Real Estate Board President) as saying, “… this issue has been sensationalized…” and “… of the 186,000 property sales in Ontario last year, there was only one incident where a seller’s agent was fined by the Real Estate Council of Ontario for misrepresenting the existence of an offer to another agent.”

There are consumer protection laws in the Province and federal legislation like the Competition Act and the Criminal Code that prohibit fake offers and every Realtor ® knows that it would be unethical to pretend to have an offer on a property. Not to mention violations under the Real Estate and Business Brokers’ Act of Ontario.

Certainly, the Offer process that is presently used in the industry is not perfect. One has to abide by the regulations which prevent a Realtor ® from disclosing the particulars of any offer. Yet, a Realtor ® must disclose the presence of competing offers and as a courtesy, most of us will reveal that there is another offer in process and promise to confirm this, once the offer is received.

Personally, I have once had a Buyer doubt the presence of competing offers and I understand his frustration when I had to explain that I could not show him the other offer.

I have also been informed by other Realtors ® of the presence of competing offers and had my clients doubt that the information was true.

Just recently, one of my sales reps was emailed by a Realtor ® from another company who demanded that he black out the Buyer’s name and the amount and send a copy of a “competing” offer as proof of its existence. YIKES. My sales rep was completely incensed! He felt he had been called a liar. Not good, not good at all.

Perhaps this other Realtor ® had been reading the recent press reports that suggest the problem of phantom offers is rampant, particulary in Toronto.

I have to admit, I have heard of phantom offers… and I’ve had occasion to question the existence of competing offers, too…. Some Realtors ® say it’s one of the oldest tricks in the books… but would anyone in my office pretend to have an offer? NO WAY. And I have had to trust that other companies are also adhering to rules, regulations and legislations.

Over the years, the business of Real Estate has seen a lot of reform. Constant tweaking of regulation attempts to secure an ethical marketplace and consumer protection. So where does it end?

I believe that my word is my word. I believe the same of everyone in my office. Not a bad egg among them. Like I said, I have to believe that all other real estate sales people are adhering to all of the rules, regulations and legislations and that the governing body (the Real Estate Council of Ontario)is overseeing this.

As usual, it only takes a few bad apples to make things awkward for the rest of us.

I love what Maureen O’Neill had to say, again quoted from that Toronto Star article of September 15th “"Boot them out, we don't need them in the business," "I don't think these people should be allowed to sell real estate."

Amen.