As the governing board of B.C. Realtors works to reform the industry, new regulations that will nix realtors from representing both a buyer and seller at the same time in a housing deal will soon take effect.
But ahead of those changes, realtors in the north are concerned that consumers in rural communities will have even less choice when it comes to buying or selling a home.
As of March 15, dual agency, or limited dual agency, will be prohibited – an idea first proposed by the Superintendent of Real Estate in September.
The proposed changes stem from recommendations issued in a report to the Real Estate Council of BC in June 2016, which was prompted by allegations that some real estate agents were flipping homes multiple times before a deal closed, also known as “shadow flipping,” that drove up prices and commissions.
While consumers may be protected, some realtors will struggle to find jobs that don’t pose conflict and consumers will be turned away, said John Evans, president of the Northern Real Estate Board.
The new rules could result in a realtor that people have known and trusted for years having to reject their business if they have a buyer client that is possibly interested in your home, he said.
“Imagine taking a transfer to one of these small communities but you cannot find a local agent to represent you as a buyer’s agent because they all have agency relationships with sellers,” said Evans.
“Will you use the services of an out-of-town agent that is not familiar with the area, does not have any local market knowledge, does not know where the latest grow-op home was?”
These are the types of services realtors have provided that may not be available in smaller communities in the next few years, Evans said.
“The loss of dual agency will restrict the services that we can provide to the consumer. ‘I’m sorry sir, I cannot show you homes. I’m sorry Ma’am, I cannot help you with your high assessment. I’m sorry you two, despite the fact that you are good friends and going through a divorce I cannot help you determine the value of your home. I’m sorry, I can put my sign on your lawn but I can’t sell your home to any of my former clients.’”
With such a large purchase, most consumers rely on realtors they know or have been recommended to by friends or family. In smaller communities Evans fears it will be next to impossible to avoid conflict, leading to businesses closing down.
“Will these small offices have to shut down based on the fact that they are simply unable to provide services based on strict guidelines to avoid conflict? They likely will,” he said.
“In the end, small offices will be absorbed by the larger offices. More agents will be providing services in under-serviced areas despite the fact that they have no knowledge of the local area. Services that have been provided by local agents will all but disappear.”
Changes for the protection of the consumer
Although the changes will take time adjusting throughout the province, the goal is to protect the consumer, said Mykle Ludvigsen, a spokesperson for the Office of the Superintendent of Real Estate.
“Our job here is to make sure that people that have representation when they’re buying and selling something worth so much money are fairly and properly represented, and that is always our focus,” he said.
“We’re here to serve the public and not the industry. We talk closely with them to make sure we get it right but at the end of the day our job is to protect consumers.”
There is room for exceptions in very rural areas, where getting another realtor is almost impossible, but it’s up to the Real Estate Council of British Columbia to determine how to apply that rule, said Ludvigsen.
“The real estate agent isn’t the product. The home you’re trying to buy is the product. Our perspective is that you’re trying to buy a home and you’re having someone to help you do that and that person needs to be 100 per cent. Your fiduciary duty as a real estate licensee is to your client and that’s what this is designed to do.”
While it will change the way things are done, the hope is that the market will adjust.
“There are 35,000 realtors in the province of B.C. and I’m certain that they will find a way to manage this,” he said.