It is said that fear and greed are the primary motivators. The real estate market suffered a hit from COVID-19 in 2020, but it didn’t last. Until March of this year, greed and FOMO prevailed in the real estate market in the GTA and elsewhere. Buyers were lining up to pay huge sums in multiple offer situations for fear of missing out on the real estate bonanza. The expectation was that the property would go up in value between making the deal and closing. Then came large interest rate hikes, and the market cooled. Buyers started suffering from FOO– fear of overpaying.
During the wild times, I noticed that many deals were being done by agents in locations far outside their trading areas. How often have I heard an agent say, “my registration allows me to trade anywhere in Ontario”? That statement is simply false. Our registration permits us to trade in areas and types of real estate for which we have the requisite skill to deliver excellent service. Section 8 of our Code of Ethics says that we have a duty to refer any business that falls outside of our expertise to someone who can deliver excellent service.
Now that prices have dropped significantly in most market areas, many unhappy buyers are finding that their property is worth less on closing than they agreed to pay. Some of them will be looking for someone to sue, and who better than the bonehead agent from Toronto who sold them that lovely home in Burlington? The law, the Code and prudent professional practice demand that we stay within the confines of our expertise. There is a lawsuit waiting for those agents who ignore these demands.
Bill Johnston is available to assist with any of your RECO defense, arbitration, broker, and real-estate educational webinar services. To learn more about Bill’s services, please fill out our contact form on the website to receive a free consultation.
