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Whistler realtors react to Vancouver market revelations

Exploitation of assignment clauses 'very concerning,' says Company president


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Whistler real estate agents are concerned about revelations that some Vancouver realtors are involved in a "shadow flipping" scheme where agents pull in multiple commissions by trading properties one or more times before a deal closes.

The news is "very concerning," said Pat Kelly, president of the Whistler Real Estate Company, though he has no reason to believe the practice is happening in Whistler.

"It makes a lot of very good realtors look bad, because we all get brushed with the same brush," Kelly said.

"Hopefully they will get to the bottom of this and if somebody deserves to be punished, or if there's going to be accountability, that it be dealt with quickly."

The unethical behaviour was uncovered in a Globe and Mail investigation. The Real Estate Council of BC (REC) has pledged to investigate.

The alleged ethical wrongdoings include a perfectly legal real estate contract clause known as an assignment clause.

As the Globe reported on Feb. 6, several Vancouver real estate agents have allegedly been pulling in multiple commissions by trading properties multiple times. In effect, the realtors are making massive profits by artificially inflating market prices.

"The (REC) is appointing an independent advisory group to investigate whether assignment clauses are being used appropriately, and to develop recommendations to increase the Council's enforcement and oversight of non-disclosure by licensees investing in properties," read a media statement from the REC published on Feb. 8.

Whistler being the relatively small community that it is has more transparency in the local market, said Kelly.

"I think if something like that was going on everybody would know about it very quickly, whereas in the city it's a little bit more anonymous," he said.

"There's only 180 agents (in Whistler)... and everybody sort of knows what's going on. Information is very forthcoming here, it's very transparent, and I think in my 35 years I've never really seen anybody up here that I would even think would think of doing something like that."

Kelly's advice for potential sellers is to do their due diligence before accepting any offers or signing contracts, and when in doubt, seek third-party advice.

"Go out and do some diligence before you just enter into a contract, because the guy that's offering the money isn't worried about what's going to happen to you," he said.

"If somebody comes and offers you a deal to buy something that you own, the first thing you should be doing is going and getting some third-party verification for the value."

Ann Chiasson, owner of RE/MAX Sea to Sky Real Estate, said that in her experience, Whistler's realtors are very ethical.

"We have very ethical people in our offices, and when we don't, we get rid of them. That's the deal," Chiasson said.

"I'm hoping that the council will snap down on a few of these people and take their licenses away. That's what needs to happen. They need to be told in no uncertain terms that this is not reasonable work."

It's hard to say where the practice of shadow flipping came from, but it's a relatively recent development, Chiasson said.

"It seems to me it's over the past year this has happened, and I don't know if it's because of scarcity of product or it's just the changing culture," she said.

Prices in Whistler's market are going up, "but they're going up more organically because of lack of product, not because we have flips, flips and more flips," she added.

"Most people in Whistler are buying because they're long-term investments or they're using them... it's just not something we see a lot of."

Anyone — buyer or seller — who is unhappy with the conduct of a real estate agent should report them to the REC, Chiasson said.

"That's why they're there," she said. "They're there to protect the public."