Real Estate Nightmare #8, “When Agents Go Bad”
Here is a very disturbing trend that was shared with me at a client meeting this week. After the client delivered the “You must all do the same training school, you all sound alike.” speech, he disclosed why he felt this way.
He described a Buy/Fix/Flip scheme that he had gotten involved with. He pulled out the Thornhill News and showed a full page ad for this scheme. It appears that agents from 2 Brokerages – a Re/Max and a Royal LePage Brokerage were working together on this promotional public training and sales event.
The premise was one brokerage would go and look for places to flip and help the participant buy them. The agents would then refer the buyer to their contractors to do the work to improve the property and then sell with the other brokerage. Sounds fishy just with this simple explanation.
What he continued to describe was how the details worked with the fixers and the agents. The agents referred the participant to their contractor to get all the work done. The contractor required cash “That’s how everyone gets paid”, for materials and labour. Any excess materials bought and not used were then passed along to the agents (who were also buying, fixing and reselling.
Needless to say the participant, the person sharing this story with me, got screwed when the contractor disappeared due to family issues outside of Canada. There were many more details that I will not go into her, needless to say – not a good experience for the client.
The take away here: If it sounds too good to be true, it is. Buying, fixing and flipping takes money and experience. Those just entering the game need to be careful and know what they are getting into. Zoning, contractors, permits, even neighbourhood councils need to be understood before any deal is struck.
As well, if you come across any agent, doing anything that you suspect is out of the norm, do not be afraid to report them to the Real Estate Council of Ontario. It can be done online – its simple and they do follow up quickly. It also helps level the playing field when it comes to weeding out the bad agents. Here’s the link.
As always, feel free to contact me about your selling, buying or leasing needs in the GTA. If I am not in the area, I have an agent in my office who is.