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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!

May 5th - 2015

RECO decision: Memory fails registrant who conveys wrong price

A registrant’s mistaken price presentation leaves the sellers out of pocket and the buyers out of luck following this transaction, which leads to a RECO complaint.

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A registrant’s mistaken price presentation leaves the sellers out of pocket and the buyers out of luck following this transaction, which leads to a RECO complaint.

RECOThe following decision from RECO Discipline and Appeal Hearings has been condensed. All individual and corporate names have been changed. 

THE FACTS

Danny and Sue listed their home with Prime Realty, with Jeff as their representative. In their listing agreement, the couple asked for $749,000. The sellers instructed Jeff that they wanted no offers until 6:00 p.m. on July 27. 

The potential buyers, Pete and Maya, visited the house three times with their representative, Eva of Sunny Realty. This couple wanted to submit an offer immediately, but Jeff told Eva his clients were not accepting offers until the specified day and time. 

On behalf of her buyers, Eva drafted an offer of $815,000 on the property, well over asking.  However, before the offer presentation, Jeff told Eva there would be multiple offers on the home. As a result, Pete and Maya increased their offer to $856,100, more than $100,000 above the list price.

Eva presented the offer to Jeff and to the sellers. After the offer presentation, Jeff handed all of the copies of Pete and Maya’s offer back to Eva even though he was invited to keep a copy. Jeff told Eva that he would call her after all offers were presented. Jeff could have kept a copy of Pete and Maya’s offer in order to advise his sellers about this offer, but he decided to rely on his memory and notes instead.

Jeff eventually called Eva and told her that Pete and Maya’s offer was well below the other five registered offers. Jeff told Eva that three of those offers were being sent back for improvement but not Pete and Maya’s. Finally, after some discussion with Eva, Jeff agreed that Pete and Maya could resubmit a better offer. However, given that their offer was already $100,000 over asking, they declined to alter it.

Later that evening, Jeff called Eva to inform her that Danny and Sue had sold their home for $801,500.  The price was approximately $54,000 less than the amount offered by Pete and Maya. 

Eva informed him that her clients’ offer had been for $856,100. Jeff admitted he’d made a mistake, as he thought their offer had been $756,100. His recollection of the price was $100,000 off, significantly less than the amount offered by Eva’s buyers.

Although it was acknowledged that Jeff made a mistake and his actions were not intentional, Danny and Sue were out $54,600 on the sale of their home while Pete and Maya did not get the home on which their hearts were set.  

THE FINDINGS

The RECO panel determined that Jeff acted unprofessionally when he failed to present the correct price offered by potential buyers to his sellers. It ruled that Jeff did not provide conscientious and competent service to his clients when he neglected to retain and properly review Pete and Maya’s offer.  The panel ruled that Jeff breached the following sections of the REBBA 2002 Code of ethics:  (4) Best interests; (5) Conscientious and competent service, etc; (38) Error, misrepresentation and fraud; and (39) Unprofessional conduct, etc.

THE PENALTY

Jeff was fined $12,500, payable to RECO. The full case can be viewed at www.reco.on.ca. Look under “Complaints and Enforcement”, select “Regularly Activities and Decisions” and then select “Discipline & Appeals/Decisions.” Scroll down and click on “Search by year.”  Select 2013 then “Search.”  Look under cases dated 2013/06/11.

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Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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