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RECO Encourages Multiple Offers ~ Penalizes Agent for Missing Opportunity

Robert Smith acted for William and Martha Jones in the sale of their property. It was a fully rented triplex asking $500,000 subject to a 5% commission.

Mary McPhail, an agent with another brokerage showed the property on 12 January to her clients. They liked it and were serious buyers.

Smith was approached by Susan Black, who was unrepresented. She also saw it on 13 January.

McPhail called Smith indicating that her clients wished to submit an offer. The sellers instructed Smith to hold off with all offers until 17 January. That would be the “Offer Date”. The MLS was updated to announce this date to everyone who viewed the listing.

On 14 January, Susan Black signed a BRA (Buyer Representation Agreement) with Robert Smith for a 3 day period the 14th, 15th and 16th.

An Offer was drafted and submitted on the 15th. It was for $490,000, called for a $25,000 deposit and a quick closing on 16 February. There were some warranties included in the Offer, but essentially no conditions. The Offer was accepted by the sellers. It would be generally considered to be a “bully offer”, that is, requiring consideration prior to the Offer Date, by reason of its premature expiry.

McPhail called Smith wishing to submit an Offer. She was surprised to learn that she had not been called and the property had been sold. The MLS still showed the property as unsold and the OFFER DATE was still 17 January.

McPhail complained to RECO about this set of circumstances.

The Discipline Committee considered the following allegations of misconduct:

1. He failed to protect the best interests of his client, the Sellers, by failing, on Saturday, January 15, 2011, to advise all interested parties that offers were being considered immediately, thereby precluding the possibility of multiple offers which would have provided the Sellers with the highest possible sale price.

2. He failed to provide conscientious service to his clients and customers and failed to demonstrate reasonable knowledge, skill, judgment and competence in providing those services by:

A. Failing to advise Registrant B, and any other interested parties, in a timely fashion that his buyer client was submitting an offer on the property, thereby potentially attracting competing offers and a higher sale price for the Sellers.

B. Failing to educate himself about and engage correct procedures for considering offers in a situation where a date for the consideration of offers has been publicized on the MLS system and had been communicated personally to Registrant B.

3. He knowingly made an inaccurate representation in respect of a trade in real estate by failing to update the MLS listing as soon as he had an offer on the property on Saturday, January 15, 2011, at which time the MLS listing still indicated that offers were to be considered at 6:00 p.m. on Monday, January 17, 2011.

4. He acted unprofessionally by:

A. Failing to contact, as soon as he had a registered offer on the property in hand, every party who had expressed an interest in the property to advise them that offers were being considered immediately and were not being held until Monday, January 17, 2011.

B. Failing to update the MLS listing information on Saturday, January 15, 2011, to indicate that offers were no longer being held until the following Monday, January 17, 2011.


It is agreed that Robert Smith breached the following Rules of the RECO Code of Ethics:

3. A registrant shall treat every person the registrant deals with in the course of a trade in real estate fairly, honestly and with integrity.

5. A registrant shall provide conscientious service to the registrant’s clients and customers and shall demonstrate reasonable knowledge, skill, judgement and competence in providing those services.

37.(1) A registrant shall not knowingly make an inaccurate representation in respect of a trade in real estate.

38. A registrant shall use the registrant’s best efforts to prevent error, misrepresentation, fraud or any unethical practice in respect of a trade in real estate.


A good deal of the decision seems to be based on the failure to update the MLS. That was no big deal. And, it was only one day out of time.

The “big deal” here, was that he double ended this transaction secretly. He didn’t tell the other agent, he kept her in the dark, and it looks like he also kept his own clients in the dark.

He already had an Offer Date for multiple offers. That was the 17th, so doesn’t it seem awfully peculiar that he has buyer Black conveniently enter into a three day contract expiring on the 16th. That would mean that her offer would have to be considered ahead of time.

So, who do you think is counselling her to try to take advantage of the sellers? And, who do you think makes both ends of the commission, being the 2.5% for the sellers’ and another 2.5% for the buyer’s.

This becomes quite complicating in terms of the conflicts presented by acting for both sides.

Most “bully offers” are substantially over list price. Not here, $10,000 under, so why wouldn’t you wait one more day to see the Jones Offer? Any rational seller would wait! Unless, of course, you didn’t have “all the information” or someone was trying to persuade you to accept it, ahead of time.

Here, the Discipline Committee was clearly of the view that multiple offers would have generated a higher price for the sellers as a result of a bidding war.

It should also be noted that the sellers did not file a complaint, nor did they participate in the disciplinary process.

The real qusetion here was "who's the bully?"

As a rule, I use fictitious names or do not mention any names if it is not necessary. The actual case is published on RECO's website and is available to the public. For educational purposes, the names of the parties really don't have any bearing. If you need to quote the case, you will have to obtain the proper legal citation.

Brian Madigan LL.B., Broker