Whether on the radio, in your mailbox, or online, real estate brokers guarantee in their advertising that they will buy your home if they fail to sell it. Others offer a guarantee to sell within 120 days or a $10,000 sum if the price and time to sell don’t meet the seller’s expectations.
However, offering sales guarantees and discounts presents an appearance of conflict of interest and it is prohibited, insists the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ). The Real Estate Brokerage Act is clear on this subject, says the Organization.
“We have informed them for a number of months that we were to crack down on this,” said Caroline Champagne, vice-president of management at the OACIQ, in an interview with La Presse. This is why we will intervene in cases where it continues. »
By offering the sale guarantee, the broker can find himself in a situation where he will accelerate the sale and favor himself, explains Caroline Champagne.
For example, has the broker really marketed allowing access to the greatest number of buyers? Did the broker advise his client to ask for a lower price to speed up the sale? Did he advise him to accept an offer to meet the sales time guarantee?
Caroline Champagne adds that the broker knows the personal, strategic and financial information of his client and that he could take advantage of it.
To comply, François Mackay, whose advertisements regularly aired on 98.5 FM, changed his offer. He changed his “Your house sold Guaranteed or I’ll buy it”, which is always advertised on Google, to a new formula: “Sell your house at the agreed price and time or I’ll pay you $10,000”. Its advertising cards were distributed in mailboxes in the Montreal region last June.
The “Mackay Group-Your House Sold Guaranteed or I Buy It” Facebook page is still active and updated daily with new posts.
“I took the words ‘guaranteed’ out of my case, because I understood you couldn’t guarantee stuff anymore,” he explains over the phone.
“I had written my disagreement with that [at the OACIQ] and no one came back to me with that. Since May 8, I haven’t had a comeback on this, he continues. I was thinking that eventually, if I have a comeback. On the contrary, my customers who take advantage of this offer see that it is a very, very good offer. If I can’t get $500,000 for my client, I’ll give you $10,000 as either a commission cut or a check at the end at the notary. »
He specifies that two of his clients have benefited from this new offer.
On the website of the real estate agency ADRESZ, the page of the real estate broker Bogdan-Alexandru Tomescu clearly indicated on Wednesday morning the offer “Your house sold guaranteed or we buy it!” ‘, and ‘cash’, to boot.
“Yeah, I got the message [that it’s illegal]. It’s not my site, it’s not me who put this here. I’ve never offered that to my clients,” he defends himself on the phone. A few hours later, the ad was taken down.
For his part, Sébastien Abran, real estate broker, Royal LePage, in Repentigny, offered “Your house sold in 120 days guaranteed”. By text message, he confirmed on Tuesday that he still offered this guarantee. ” Good morning. Yes definitely, if the property is listed at the right price, the market is good! “, he replied in writing.
Reached by phone, Sébastien Abran said he was surprised to learn that it was illegal and that he was unaware. “If it’s illegal, I’ll take it down,” claimed the broker who removed the mention of the offer a few minutes later.
Marc Lacasse, chairman of the board of directors of the Association professionnelle des courtiers immobiliers du Québec (APCIQ), argues in an interview that brokers have a duty to know the law.
“The broker couldn’t buy 10 properties in a year,” he adds.
Caroline Champagne of the OACIQ also specifies that if a broker buys his own listing, he is in a clear conflict of interest.
The OACIQ informed agency managers in August 2022 that it was necessary to stop including sales guarantees in brokerage contracts and to stop advertising them. The brokers received the information in September 2022 and had to comply with the law from November 9, 2022.
As some brokers had advertising contracts with radio stations and bus shelter display companies, the OACIQ gave a six-month deadline, until May 9, 2023.
Brokers now face fines of $2,000 to $50,000 per violation and periods of temporary suspension.