A Federal Court judge on Sept. 25 allowed a class-action lawsuit alleging home sellers in the Toronto area have been forced to pay artificially inflated commissions for years. The lawsuit alleges major brokers and real estate organizations in Toronto implemented rules that essentially stifled competition for buyer brokerage services, leading to higher prices. But what exactly is buyer brokerage and what is its role in the potentially landmark lawsuit? The Financial Post’s Shantaé Campbell explains.
Real eState
Missing Christchurch real estate agent: Yanfei Bao had recently shown someone through house raided by police – New Zealand Herald
Missing Christchurch real estate agent Yanfei Bao had recently shown someone through a property that is now being searched by police in relation to her disappearance.
Bao was last seen in the Wigram area about 10.30am on Wednesday. She has not been found but her cellphone was located on the Southern Motorway on Friday.
On Sunday, Detective Inspector Nicola Reeves said a man had been charged with kidnapping in relation to the ongoing investigation into Bao’s disappearance.
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The 52-year-old man was remanded in custody and is expected to appear in the Christchurch District Court this morning.
On Monday morning, Reeves said police were searching a third property on Trevor St, in Hornby. The house is currently listed for sale by Harcourts.
A listing for the home says the owners are “already calling Aussie home so that brings this home to the market”.
“Be the one to enjoy all the hard work that my vendors have completed. Stripped back to the frames post-quake, this home is waiting for you to make memories of your own.”
The owner of the home told the Herald he had been in Australia for six weeks.
He has been told Bao “showed someone the house”.
As of Sunday evening, Bao was still missing.
The Herald understands the man who is due in court today was arrested at an airport and was planning to leave the country.
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Reeves said the investigation was ongoing, and several people were assisting police with inquiries.
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“As part of those inquiries, police are seeking sightings of a vehicle a silver Mitsubishi sedan, registration DPH101.
“We’re interested in sightings of the vehicle from mid-week up until last night, but with a particular focus on the vehicle’s location on Wednesday, July 19 in Wigram, Hornby, Tai Tapu, Halswell, Redcliffs and New Brighton.”
On Saturday evening, Detective Inspector Nicola Reeves said the investigation resulted in a vehicle of interest being seized and search warrants being executed at two addresses, one in Bryndwr and one in Wigram.
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“As a result, several people are assisting police with inquiries.”
The Wigram property is on Iroquois Pl, where Bao’s car was found on Wednesday.
Police left the Iroquois Pl property on Sunday afternoon.
A man who was at the home police were searching declined to comment when approached by the Herald on Sunday.
“I know nothing and I don’t think I can say anything.”
“I totally don’t know what happened.”
Asked if he knew Bao, the man said “no”.
“No comment, sorry, I don’t know.”
A neighbour told the Herald the Mitsubishi police are seeking information on was usually parked on Iroquois Pl.
“I’d see it every day nearly.”
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Police investigating ‘more than 40 pieces of information’
Earlier on Saturday, Reeves said police had received “more than 40 pieces of information from the public which we are in the process of assessing”.
“We want to thank the public for coming forward, and encourage anyone who has not done so to let us know if they have information that may assist.”
One of Bao’s friends, Jin Tian, posted on her Facebook page she had last spoken to Bao, whom she called Emily, at 11.16am on Wednesday on WeChat.
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“She mentioned [something] about a potential client who wants to transfer money to NZ and checked about the rate and channel.
“Then she said she was going to call the person to see [what] he/she wanted and would call me back. And she did not,” Tian wrote.
In another post, Tian said she was not sure where Bao was when she called her.
On Friday, Reeves said police were “growingly concerned” for Bao.
”Ms Bao’s disappearance is unexplained, and a missing person investigation remains ongoing.
”She was last seen conducting her business as a real estate agent on Vickerys Rd in the Wigram Area about 10.30am.
”Since then, she failed to pick up her daughter from after-school care, and her car, a silver Nissan Dualis, has been located nearby the area she was last seen on Iroquois Place.
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”Today, police searched a number of areas and located Ms Bao’s cellphone on the Southern Motorway. But Ms Bao remains missing.”
Reeves said the longer Bao was missing, the more police concerns would grow.
She said the fact she didn’t have her cellphone, which was found in bushes at the side of the motorway, was particularly concerning.
She said police had been fortunate with the information coming from members of the public.
“It’s through that good investigative work and help from the public we’ve been able to find her phone,” Reeves said.
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Reeves said police would “look into” Bao and her history.
The last person who saw Bao was a homeowner, whom Bao visited.
”We are now interested to hear from any members of the public who might have been travelling on the motorway on Wednesday and noticed anything out of the ordinary.
”Anyone with any piece of information, no matter how small, is encouraged to contact police immediately.
”Police have also been conducting door-to-door inquiries in the area she was last seen.
”If you live in this area and have not spoken with police but have access to CCTV footage of the street area, police would like to hear from you.
”I would like to reiterate that police and Ms Bao’s family are deeply concerned for her safety. This is very out of character, and her loved ones are desperate to hear from her and know she is safe.”
Bao’s husband, Paul Gooch, had also prepared a statement which was provided to media.
”My family and I are deeply concerned for the safety and wellbeing of my beloved wife, Yanfei Bao.
”Our 9-year-old daughter and I are desperate for any information that could help police locate her.”
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Bao was a “dedicated real estate consultant” who was “engaging with the local community through door-knocking when she went missing and we have not heard from her since”.
”We are incredibly worried and ask for any assistance from anyone that knows something.
”We pray for Yanfei’s safe return and would like to thank everyone for their vigilance and support at this time.”
On Friday morning, some of her colleagues were out delivering leaflets to people’s letterboxes in the Wigram area. The leaflet says: “Help us find Yanfei Bao!”.
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Bao’s profile on the Harcourts site said she has “extensive experience” in sales, and was previously a top-selling salesperson for a major electronics brand.
“She reached the status of Apple Master, which is a rare achievement. She is highly educated and capable, with a Master’s degree in English linguistics and a post-graduate diploma in business management, and is ready to utilise the knowledge she gained from her academic achievements to enhance the result she delivers for clients and customers.”
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Family was her “priority”, and she loved spending time with her partner and young daughter.
“In her spare time she loves to read, and her other interests include travel and learning something new every day. If you are looking for a highly educated, passionate and hard-working salesperson to assist you in buying or selling your most important asset, give Yanfei a call, as she would love to hear from you,” the Harcourts site states.
- Anyone who has seen her, or has any information about where she could be, is urged to call 111 immediately and quote reference file number 230720/5911.
Sam Sherwood is a Christchurch-based reporter who covers crime. He is a senior journalist who joined the Herald in 2022, and has worked as a journalist for 10 years.
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Hong Kong’s Hang Seng Index dropped more than 3% Tuesday, dragged by its real estate and energy sectors.
The benchmark index’s loss of over 500 points is a significant decline, Everbright Securities’ Kenny Ng told CNBC via e-mail.
“On one hand, this was driven by profit-taking following a 400-point rise last Friday,” the securities strategist explained. “Additionally, the US dollar index has remained relatively strong, exerting downward pressure on the Hong Kong stock market.”
The index was last trading down 3.16% after coming back from a holiday on Monday.
Ng highlighted how property stocks were among the largest decliners Tuesday, given the high-interest environment.
Hang Seng Index
*Data is delayed | Exchange | HKD
17,305.40
-504.26 (-2.83%)
-504.26 (-2.83%)Hong Kong listed property stocks were firmly in the red. Country Garden Holdings plunged 7.67%, leading losses in the sector, while Longfor Group Holdings lost 4.82%. New World Development shed 6.69%, and Henderson Land Development traded 6.15% lower.
“Coupled with the relatively sluggish mainland Chinese real estate market, it is expected that this sector will continue to face downward pressure in the short term,” Ng added.
China’s property market has struggled with faltering consumer confidence, as property giants Evergrande and Country Garden were mired in debt problems.
Separately, beleaguered Chinese property giant Evergrande resumed trading in Hong Kong. Shares have been volatile since resuming trade in late August following a 17-month suspension. The stock rose 22% in early trade. The firm’s EV unit also halted trading Tuesday.
Energy stocks also posted losses, with PetroChina losing 5.93% and China Petroleum & Chemical Corp dipping 5.14%.
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What does ‘buyer brokerage’ mean?
This transformation prompted the creation of specific legislations and regulations by provincial governments and real estate regulatory bodies in Canada, such as the Real Estate Council of Ontario (RECO), the Canadian Real Estate Association (CREA) and the Toronto Regional Real Estate Board (TRREB).
These rules and protocols serve to formalize and oversee buyer brokerage relationships by instituting a framework governing duties, responsibilities, disclosure, consent and confidentiality.
Where do commissions come in?
Nationwide, commission structures for real estate agents and brokerages typically involve a percentage-based commission derived from a home’s sale price, but the rates vary.
For example, if a home sells for $1 million with a commission of five per cent, the total commission amounts to $50,000. This sum, paid by the seller, is generally shared equally between the seller’s and buyer’s agents, each receiving $25,000. However, the precise division can fluctuate, being contingent on the agreement established between the seller and their agent.
Why are commissions split this way?
According to CREA, the organization does not mandate a specific commission split or dictate how commission should be allocated between the listing and buyers’ realtors.
Rule 11.2.1.3 in CREA’s by-laws and rules states: “The listing realtor member agrees to pay to the co-operating (i.e. buyer’s) realtor member compensation for the cooperative selling of the property. An offer of compensation of zero is not acceptable.”
In an email, RECO said commission rates are not fixed. “Commission rates are not set or approved by the Real Estate Council of Ontario, government authorities, real estate associations or real estate boards,” it said.
The splitting of commission between the buyer’s and seller’s agents is nonetheless a well-established practice in real estate designed to promote cooperation, balance and fairness within the industry. The idea is that a shared commission incentivizes buyer agents to introduce more potential buyers to the home, leading to a faster and possibly more profitable sale.
Furthermore, the commission model serves to reduce potential conflicts of interest by eliminating the buyer’s direct financial obligation to their agent, preventing undue pressure on buyers and ensuring accessibility to agent services.
Why is this a problem?
The lawsuit lodged by plaintiff Mark Sunderland against defendants TRREB, CREA and various real estate brokerages contends that an arrangement known as the ‘buyer brokerage commission rule’ has been in effect since at least March 2010.
Sunderland’s lawsuit posits that this arrangement has impeded market competition, compelling sellers to incur costs they would not otherwise bear in the absence of such an agreement. Furthermore, it contends that this setup precludes the negotiation of price and quality of the service.
Barwick says that even without formal policies mandating uniform rates, brokers, reliant on peer co-operation to draw buyers to properties, can help uphold a standard commission rate locally, especially for buyers’ brokers.
Michael G. Osborne, an attorney who specializes in antitrust and competition law at Cozen O’Connor in Toronto, says that from a competition point of view, there is a potential issue pertaining to the mechanism wherein brokerages must become members of CREA and TRREB to operate. Essentially, though Broker A and Broker B have no direct written agreement between them, by aligning with an association’s rules they can be seen by the Competition Bureau to be operating under an indirect “hub and spoke” agreement.
How much is at stake in the lawsuit?
Kalloghlian Myers LLP is seeking compensation for anyone who has sold a home since 2010, though they have not yet put an overall dollar value on what they are seeking.
If every transaction covered by TRREB is affected, the sums involved could be substantial.
According to annual sales and average price figures on TRREB’s website, more than $880 billion in residential real estate changed hands between 2010 and 2022. Five per cent commission on those sales would amount to $44 billion, with as much as half going to buyer brokerages.
Can home sellers participate in the lawsuit?
In a class-action lawsuit, individuals who are similarly affected are generally automatically included, meaning there’s usually no need to actively “get in on” the lawsuit. If the ruling is in favour of the class, affected individuals will be notified about their entitlements. The duration of such lawsuits can vary widely, depending on the complexities involved and the legal pathways taken.
Should compensation be awarded, the distribution could take several years.
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While Katy Perry prepares to take the stand in court, a bill with her name might be going to DC.
The “Fireworks” songstress and her partner Orlando Bloom are currently tied up in a legal battle with 84-year-old Carl Westcott, the founder of 1-800-Flowers, who claims he was on painkillers when he agreed to sell the couple his Santa Barbara mansion. Perry and Bloom are not named in Westcott’s filing, which is against the couple’s business manager, Bernie Gudvi.
As the trial rages on, members of the Wescott family are throwing their support behind a newly launched campaign for the Protecting Elder Realty for Retirement Years (PERRY) Act. “The Katy PERRY Act addresses the risks of elder financial abuse, especially as it relates to property and real estate sales and transfers,” a website for the act explains.
Representatives for Perry did not immediately respond to EW’s request for comment.
Jason Kempin/Getty Images Katy Perry
In an op-ed for The Federalist, Carl Wescott’s son, Chart Wescott, called upon California and other state legislators to pass the act, which establishes a 72-hour grace period during real estate sales and transfers of personal residences that allows either party to rescind the agreement without penalty, if one party is over the age of 75.
The website also lists the 38 state and local politicians who are backing the act.
Per PEOPLE, Perry and Bloom originally purchased the 9,285-square-foot home from Wescott in July 2020 for $15 million. Days after the deal was finalized, Wescott claimed that he had been recovering from spinal surgery at the time of the agreement.
During opening statements last Wednesday, Westcott’s attorney Andrew Thomas said that his client, who was diagnosed with the genetic brain disorder Huntington’s Disease in 2015, had been showing signs of “delusion” and “intrusive thoughts” after taking the painkillers and was still recovering from “post-operative delirium.”
In a countersuit, Perry is seeking more than $5 million in damages due to loss of potential rental income and for the cost of maintaining other properties that she and Bloom rent. She is expected to remotely testify this week in the non-jury trial which began last Wednesday.
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