I start this article with a simple analogy.
Most of us possess a driver’s licence to drive an automobile or small truck. Just having that license is not adequate for us to drive a big rig – an 18-wheeler or heavy equipment. One has to train to do so, to be certified by a regulatory authority. Please keep that in mind as I explore my concepts of why dual agency problems are not issues with the agents but rather a result of a lack of regulatory control.
There is no question that many a lawsuit has been tried in Canadian courts by either agents taking advantage of their role (and the clients) or the agents just not understanding what their role is.
Having a real estate license or registration should have more regulatory control. To come out of a real estate school and be let loose on the public is just ripe for recklessness.
A new agent could be involved in a complex commercial or land deal with no training. But they may also find themselves in a dual agency (multiple representation in Ontario) situation and in need of additional skills to complete the task professionally.
In Ontario, I have made proposals to both the regulator and provincial association and received no response.
Here is my outline about what I feel is the right process for dual agency and its future in residential real estate:
- No agent with less than two years of experience should be allowed to undertake dual agency.
- No agent who has done less than 10 deals (that is arbitrary) despite their years in the industry should be allowed to undertake dual agency.
- Any agent wishing to undertake dual agency must take (at least) a one-day, in-person course with an examination at the end.
- The course would be written by arbitrators and mediators who work in the real estate field; there are many lawyers and retired judges who would be excellent course writers.
- Unless an agent has the certification, they simply cannot be a dual agent.
- Mandatory re-certification could be an option every, say, three to five years or as regulations, laws, etc., evolve.
- An agent could advertise they are “certified in dual agency” once the proposed certifications are complete.
It is my contention that with reference to my opening comment about having a license to drive a car but no training to drive a big rig, the problems that exist with dual agency come down to one thing – there has been little to no adequate education across Canada in the process.
Even the study of our fiduciary role is glossed over.
I remember the early training we got when I started in this industry. Sellers would ask us if we had buyers for their house. Agents who worked in a particular area did. Why hire an agent who lacked potential buyers?
By creating a system where we either list for the seller or work with a buyer, we will find another problem: an erosion of our fees as if we are listers. Then, from a seller’s viewpoint, why not go with the lowest-priced agent?
If we are not seeking buyers, we are just offering a service. Why bother having an open house to sell a home when we cannot deal with the buyers?
Open houses will make little sense (yes, I know, it is for agents to pick up buyers and neighbours that want to sell, I have heard that before).
It is not dual agency that is the problem, it is the lack of education and training that is at fault, and it appears that regulators would rather just sweep it away instead of dealing with the reality of their own failings.
To regulators, I state, “Educate, not eradicate.”
Barry Lebow, FRI, Master-ASA, ABR, SRES, is one of Canada’s most recognized real estate authorities. Now in his 54th year of professional real estate, Barry has been honoured by many real estate associations for his work in the profession. He has testified in more than 500 trials across North America. He is the founder of the Accredited Senior Agent designation program. A teacher, trainer and educator, he is an active broker at Re/Max Ultimate Realty in Toronto. Visit barrylebow.com to contact Barry.