As the governing board of B.C. Realtors works to reform the industry, new regulations that will nix realtors from representing both a buyer and seller at the same time in a housing deal will soon take effect.
But ahead of those changes, realtors in the north are concerned that consumers in rural communities will have even less choice when it comes to buying or selling a home.
As of March 15, dual agency, or limited dual agency, will be prohibited 鈥� an idea first proposed by the .
The proposed changes stem from recommendations issued in a report to the Real Estate Council of BC in June 2016, which was prompted by allegations that some real estate agents were flipping homes multiple times before a deal closed, also known as 鈥渟hadow flipping,鈥� that drove up prices and commissions.
While consumers may be protected, some realtors will struggle to find jobs that don鈥檛 pose conflict and consumers will be turned away, said John Evans, president of the Northern Real Estate Board.
The new rules could result in a realtor that people have known and trusted for years having to reject their business if they have a buyer client that is possibly interested in your home, he said.
鈥淚magine taking a transfer to one of these small communities but you cannot find a local agent to represent you as a buyer鈥檚 agent because they all have agency relationships with sellers,鈥� said Evans.
鈥淲ill you use the services of an out-of-town agent that is not familiar with the area, does not have any local market knowledge, does not know where the latest grow-op home was?鈥�
These are the types of services realtors have provided that may not be available in smaller communities in the next few years, Evans said.
鈥淭he loss of dual agency will restrict the services that we can provide to the consumer. 鈥業鈥檓 sorry sir, I cannot show you homes. I鈥檓 sorry Ma鈥檃m, I cannot help you with your high assessment. I鈥檓 sorry you two, despite the fact that you are good friends and going through a divorce I cannot help you determine the value of your home. I鈥檓 sorry, I can put my sign on your lawn but I can鈥檛 sell your home to any of my former clients.鈥欌��
With such a large purchase, most consumers rely on realtors they know or have been recommended to by friends or family. In smaller communities Evans fears it will be next to impossible to avoid conflict, leading to businesses closing down.
鈥淲ill these small offices have to shut down based on the fact that they are simply unable to provide services based on strict guidelines to avoid conflict? They likely will,鈥� he said.
鈥淚n the end, small offices will be absorbed by the larger offices. More agents will be providing services in under-serviced areas despite the fact that they have no knowledge of the local area. Services that have been provided by local agents will all but disappear.鈥�
Changes for the protection of the consumer
Although the changes will take time adjusting throughout the province, the goal is to protect the consumer, said Mykle Ludvigsen, a spokesperson for the Office of the Superintendent of Real Estate.
鈥淥ur job here is to make sure that people that have representation when they鈥檙e buying and selling something worth so much money are fairly and properly represented, and that is always our focus,鈥� he said.
鈥淲e鈥檙e here to serve the public and not the industry. We talk closely with them to make sure we get it right but at the end of the day our job is to protect consumers.鈥�
There is room for exceptions in very rural areas, where getting another realtor is almost impossible, but it鈥檚 up to the Real Estate Council of British Columbia to determine how to apply that rule, said Ludvigsen.
鈥淭he real estate agent isn鈥檛 the product. The home you鈥檙e trying to buy is the product. Our perspective is that you鈥檙e trying to buy a home and you鈥檙e having someone to help you do that and that person needs to be 100 per cent. Your fiduciary duty as a real estate licensee is to your client and that鈥檚 what this is designed to do.鈥�
While it will change the way things are done, the hope is that the market will adjust.
鈥淭here are 35,000 realtors in the province of B.C. and I鈥檓 certain that they will find a way to manage this,鈥� he said.
