Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

Holiday Closure

The OREA office will close for the holidays at 12 p.m. Tuesday, December 24th.  Normal business hours will resume on Thursday, January 2nd.  Happy Holidays!

July 5th - 2003

Should you be following up?

Despite your advice to the sellers, your listing is overpriced.

Despite your advice to the sellers, your listing is overpriced. There are several price reductions over the next six months and many showings to other REALTORS and their clients.

Your sellers start getting anxious because they've already bought another home and have moved so you suggest a sharp price reduction and put it on the MLS. One of your buyer clients expresses interest at a price below market value. You have a dual agency agreement signed and the sellers agree to the offer. It is conditional on the buyer getting some satisfactory engineering studies done and you continue to try to market the property to see if you can get a back-up offer just in case.

However, you do not call the other REALTORS who had clients that expressed a possible interest in the property. Your buyer waives the condition and the deal is done. Then, one of those earlier potential buyers contacts the sellers and tells them he would have paid more. Your sellers refuse to pay your commission and sue you.

Should you have called the other REALTORS? Did you act too hastily in having your offer presented?

In this case, the REALTOR won as a result of the particular facts. It’s also important to note that he kept very accurate and detailed records of all of his marketing activities.

Central Realty v Holmes 2003 BCSC 436

Merv’s comments

The judge heard conflicting expert advice from two REALTORS of what is expected in such a situation. Here is some of what he said:

“While a practice of making follow-up calls to other agents who have shown a considerable interest in a property prior to a price reduction may be preferable in certain circumstances, there is no industry standard or accepted practice in that regard.

Imposing such a general duty on REALTORS would create more confusion than clarity. In the absence of written offers, determining when the level of interest of prospective purchasers is such that there is a duty on the listing REALTOR to call them back following price reductions would prove a near impossible task.”

It’s best to ensure you advise your clients fully of the risks they are taking by over listing. Make sure you keep very detailed notes, especially in situations where they buy a replacement property before their home is sold and get desperate.

Share this item

Don't wait until the last minute! Spell out buyer agency to avoid misunderstandings

For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
Facebook LinkedIn YouTube Instagram

The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.

OREA AI Assistant