When Carla Vanderdeen-Fenech started shopping for a home in Hamilton in late 2020, she knew it would be competitive.
What she didn’t expect was to live in a friend’s basement for five months despite having made a healthy down payment on a $1.1 million house. Vanderdeen-Fenech contends her family wouldn’t be in a basement if agents weren’t breaking the rules to milk as much money out of buyers as possible.
The 40-year-old says she’s coming forward with her experience to warn others as the pandemic-era housing market continues to intensify.
“If we weren’t robbed of a home, somebody else was … this is why I said to my husband, ‘We have to speak up, we have to file a complaint, because this is wrong,'” Vanderdeen-Fenech said.
Vanderdeen-Fenech filed a complaint to the Real Estate Council of Ontario (RECO) earlier this year when she says a local listing agent broke the rules by sharing the price of a competing bid.
After her family sold their house in Mississauga in November, they stayed in their friend’s basement looking for a home. They had their eye on a $1.1-million home on Hamilton Mountain — a brick-and-stone house with a fireplace, a two-car garage and lots of space for her three kids, two of whom have special needs.
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Vanderdeen-Fenech and her husband offered $1,100,017 on the home in early February for a 9 a.m. deadline, she said in her RECO complaint. She said there were 23 other offers on the home, which was listed at roughly $900,000, and the listing agent needed 48 hours to choose one.
She says the listing agent called her realtor at 2 p.m., two hours after her offer expired, saying hers was “one of the top five, and we had the largest deposit.” But there was a bid for $80,000 more, the listing agent said, so Vanderdeen-Fenech needed to do better.
Vanderdeen-Fenech shared her story on the condition that CBC News didn’t name the agent, because she said she didn’t want to ruin his career.
She says the listing agent encouraged her to make a higher bid because he’d hoped the competing bidders would use his son as their buying agent. But the competing bidders used someone else instead.
“When they’re disclosing information they shouldn’t be, someone is getting robbed of a home,” Vanderdeen-Fenech said.
“If he had an offer $80,000 more than ours at 9 a.m., when all offers were presented, why didn’t he take it? Why is he calling us five hours later?”
Sold for less than higher bid
The listing agent also assumed Vanderdeen-Fenech was from Toronto, she said, and told her “you Toronto people have all the money.”
Vanderdeen-Fenech didn’t raise her bid. In the end, the home did not sell for $80,000 more than her offer.
Rob Golfi, an agent with ReMax Escarpment Golfi Realty Inc., says what happened to Vanderdeen-Fenech is not an isolated incident.
“I see that happening … [agents] say, ‘OK, do better.’ Well, do we have to do better?” he said in a phone interview.
“There’s a lot of bad things happening out there, but it’s hard to prove.”
The Real Estate Council of Ontario says given the hot housing market, complaints of all kinds are at a historic high. (Mark Blinch/Reuters)
The listing agent in the Vanderdeen-Fenech case isn’t on the Golfi team.
The agent declined an interview, but his office said it hopes a review shows he is “100 per cent innocent.” Vanderdeen-Fenech’s buying agent also declined to comment.
Complaints like Vanderdeen-Fenech’s are becoming more common. Brian Buchan, a spokesperson for the Real Estate Council of Ontario, says given the hot housing market, complaints of all kinds are at a historic high.
From this time last year to the first quarter of 2021, complaints from homebuyers have jumped 38 per cent, he says, which is “one of the largest jumps we’ve seen.”
The number of disciplinary actions hasn’t increased. Of those complaints, 38 per cent led to administrative action (like having an agent pay a fine and take educational courses), while five per cent led to prosecution (like losing their licence).
“In a hot market, there’s more people involved, more room for complaints, whether that’s disappointed people in a bidding war or some undesirable behaviours,” Buchan said. “We want to be at a place where only five per cent of the complaints actually have serious consequences.”
If true, agent could lose licence
Buchan said the council is reviewing Vanderdeen-Fenech’s allegations and is in a “fact-finding and discovery phase.” After that, RECO will decide if it needs to investigate.
But if the allegations are true, Buchan said, it is “clearly” a violation of the rules.
The code of ethics states an agent can disclose the number of offers but cannot reveal the substance of an offer or who is making it.
If the listing agent did break the rules, the possible outcomes range from coming to a resolution with the complainant to the agent losing their licence.
Donna Bacher, president of the Realtors Association of Hamilton-Burlington (RAHB), said in a written statement the board hasn’t heard or received any complaints about similar conduct among its members.
Home buyers don’t know all the rules
Vanderdeen-Fenech’s family did eventually find a home in Hamilton. They expect to move in at the end of April.
Even so, she hopes her experience will help others.
“Some buyers truly don’t realize what’s allowed and not allowed,” she said.
“This is unacceptable and … maybe listing agents who have been conducting [business] this way will say, ‘I better shut it down before I get complaints against me.'”
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TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
