Real estate agents caught on hidden camera breaking the law, steering buyers from low-commission homes

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‘In addition to being illegal, the conduct undermines consumer protection,’ Ontario regulator says

A CBC Marketplace investigation has found that some real estate agents are breaking the law by steering unwitting buyers away from low-commission homes.

Posing as homebuyers and sellers, Marketplace tested if real estate agents are engaging in this anti-competitive behaviour and found some agents deceiving the very buyers they are supposed to represent, in an effort to pad their own bottom line.  

Experts and industry insiders say what Marketplace has uncovered is indicative of an industry working for the benefit of real estate agents, at a cost to home sellers and buyers.

“There’s a huge inertia, and maintaining the status quo, it absolutely benefits existing realtors 100 per cent,” said broker and real estate agent Michael Walsh, one of the few speaking out on this issue. The Canadian Real Estate Association (CREA) and the Real Estate Council of Ontario (RECO) would not talk to Marketplace about the investigation. However, shortly after learning about the findings, RECO issued a notice about steering to the over 93,000 real estate agents, brokers and brokerages under its purview, noting that such behaviour breaches the code of ethics.

“In addition to being illegal, the conduct undermines consumer protection, consumer confidence and the reputation of the real estate profession as a whole,” said the notice.

Across the country, the National Realtor Code of Ethics, as well as provincial real estate laws, dictate that agents must act with honesty and promote the interests of the individual they represent. Some provincial laws, including in Alberta and Ontario, address the issue of steering specifically.

The Real Estate and Business Brokers Act (REBBA) in Ontario states that when a buyer enters a representation agreement with a real estate agent, the agent “shall inform the buyer of properties that meet the buyer’s criteria without having any regard to the amount of remuneration, if any, to which the brokerage might be entitled.”

Not doing so is called steering.

But those calling the practice out say RECO and other regulatory bodies are not doing enough to protect consumers and foster an industry that is fair and free from abuse.  

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