In 2018, British Columbia passed legislation to restrict dual agency – a practice that allows a single agent to represent both the buyer and seller in a real estate transaction, or two agents from one brokerage to represent the buyer and seller. In Ontario, it’s still legal.
When asked if it’s a conflict of interest for an agent to represent both a buyer and seller in the same sale, Arthur Kozlowski, broker of record at Toronto’s Green Hedge Realty, says, “That conflict of interest is eliminated by me having to ask the client if they’re okay with it and also by rules that I have to follow when representing both clients.”
His company says that by using their brokerage to both sell and buy, “Homeowners can break even on commission fees, effectively pay nothing, even if the new house costs less.”
Kozlowski admitted that if he were a client, he “wouldn’t want the same agent to also represent the other side. That’s why they have a choice and can say no.” Agents are obligated to ask a seller for permission to represent the buyer as well.
“And most of the time they say yes,” says Kozlowski.
In a press release, he announced that Green Hedge Realty is a brokerage that helps Ontario homeowners to “trade houses without spending money on commission.” What this means, he clarifies, is that the brokerage charges “0.7 per cent whether we’re working with sellers or buyers. In the case of sellers, this would be a fee for the listing services. For the co-operating commission they can choose their own commission as long as it’s 0.7 per cent or higher.”
For buyers, the company “keeps 0.7 per cent of any co-operating commission offered on MLS and pays the rest back to the buyer” as a cash-back rebate.
Many factors affect the sale of a house – the listing price being, perhaps, the most important. In Kozlowski’s opinion, “If you’re not paying a high commission, you have the freedom to adjust your listing price a lot more than if you’re with a traditional brokerage where you pay a higher commission.”
He says he has worked with this model of commissions his entire career, since he got licensed in 2006. What motivated Kozlowski to follow this method, he says, is “the ease with which it’s possible to get listings. I don’t have to be an expert in a certain area, and I can still beat out local agents to get the listings.”
When listing with Green Hedge Realty, homeowners are assured of standard services such as photography of their property, a lawn sign, open houses and help with negotiations.
What they are not assured of is staging. According to a 2019 report by the National Association of Realtors Research Group, a quarter of buyers’ agents agreed that a staged home increased the dollar value offered between one and five per cent, compared to other similar homes on the market that were not staged.
But Kozlowski does not agree. “My impression of staging is that a lot of agents are just adding it to their own services to justify their high prices, but really in most cases the seller just has to clean their house or their apartment,” he says.
The company’s somewhat controversial model of business has earned the ire of other agents. “We do get some comments from agents that don’t like the commission. But for every agent that has a comment like that, there are nine agents who are totally professional and they know how to talk to their own clients about their commission, and how to make offers on properties where the commission doesn’t meet their expectations.”
Sandra Mifsud
Kozlowski is joined by broker Sandra Mifsud in running their two-person brokerage, which even in slow market conditions like those when the pandemic first hit, has yielded listings for the company.
“If it’s a slow market, it’s going to be slow for everyone, not just for those offering a lower co-op commission,” says Kozlowski.
“It seems like every time I go online, there are always listings that offer more than the traditional commission, like three per cent or 3 1/2 per cent, or even four per cent. And those listings can still be on the market for 120 days, 150 days or longer,” he says, adding that many other factors affect the sale of a property.
“There are a lot of people out there who are having trouble with affordability and our services are a good way to make affordability a little better,” says Kozlowski.
Sohini Bhattacharya is a contributing writer for REM.
