Prospective homebuyers given too much information about competing offer, a violation of Manitoba real estate rules
WINNIPEG -- A Winnipeg couple attempting to buy a new home is sharing their experience after they say a listing agent revealed too much information about a competing buyer’s bids, a violation of guidance set out by the Manitoba Securities Commission.
Last month, Taylor McMahon and his fiancé Chrisie decided to put in a bid on a $400,000 home in Stony Mountain, Man. just north of Winnipeg.
McMahon said they were told there were five other bids but decided to keep their offer the same.
“That’s when things started to get a little weird,” said McMahon. “The listing agent contacted us and said that we were in second place, which we knew wasn’t allowed.”
“She said, ‘You’re in second place, do you want to change your bid?’ Essentially saying, ‘do you want to raise your bid?’ So we did raise it once. Then she contacted us again and basically said you’re closer, but not quite. And so we raised it a second time and said that’s it.”
After raising their bid the second time, McMahon said the listing agent told their realtor they were tied with another offer.
“Basically giving us the exact dollar amount of the other offer, which again isn’t allowed,” said McMahon.
McMahon said because he and his fiancé weren’t willing to bid any higher, they didn’t end up getting the house.
“We were willing to go above and beyond to get it and still wasn’t enough,” he said.
A practice directive issued by the Manitoba Securities Commission (MSC) states realtors cannot reveal information about another buyer’s bid.
“The listing agent’s only able to disclose the number of offers received; they can’t provide any information concerning the contents of those offers,” said MSC director Chris Besko. “Actually saying that your bid is second is specifically one of the comments that we say you cannot make as a realtor to potential buyers that are in the multiple offer situation.”
“Either it’ll give one particular buyer an advantage over others making offers, or, alternatively it could have the result of sort of lathering the price, creating a price war based upon innuendo as opposed to actual facts.”
The MSC said the directive, developed with the Manitoba Real Estate Association (MREA), notes failure to comply could result in disciplinary proceedings by both the MSC and MREA.
“We continue to educate realtors on this on an ongoing basis, and the guidelines are very clear — it is not permissible,” reads a portion of a statement that was also provided the MSC.
McMahon said they brought the issue to the attention of the listing agent as well as the real estate company the agent works for and came to a resolution.
Besko said homebuyers also have the option of filing a formal complaint with the Manitoba Securities Commission and Manitoba Real Estate Association.
“We can’t undo a contract that’s been entered into,” said Besko, regarding the sale of a home. “What we can do is take action against the realtor who’s involved...which could result in a suspension of the realtor for a period of time.”
The MSC said Manitoba is currently in a very high activity market, which means more multiple offer situations could arise. The MSC said it is not surprising these situations are arising but added it is something it takes very seriously.
“This is an issue that reoccurs from time-to-time based upon how the market is doing and in fact ,we try to deal with this in a bit of proactive manner,” said Besko.
He said the issue is covered off when realtors go through their initial training and through further education.
McMahon and his fiancé just want other prospective buyers to be aware these situations can occur.
“I think it’s important for people to know that there is a way to keep these agents accountable,” he said. “We knew going in how the process should work and just seeing actually how it did work was really disappointing.”
The listing agent declined to comment. A broker for the real estate company the agent works for said in a statement to CTV News Winnipeg that it provides robust training to agents and takes any offence of the protocols seriously.
“Violations result in strict disciplinary action,” reads a portion of an emailed statement from the broker. “We are committed to providing the highest level of service and fairness to all home buyers and sellers.”
The Manitoba Real Estate Association deferred comment to the Manitoba Securities Commission.
Prospective homebuyers can find more information on the rules around multiple bid situations at moneysmartmanitoba.ca