'Bad things happening' in Ontario real estate market as homebuyer complaints surge

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 despitehaving made a healthy down paymenton a $1.1 million house. Vanderdeen-Fenech contendsher family wouldn't be in a basementif agents weren't breaking the rules to milk as much money out of buyers as possible.

"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 saysa 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 stayedin 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 garageand 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 thehome in early Februaryfora9 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 saysthe 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, soVanderdeen-Fenechneeded 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 tomake a higher bidbecause he'd hoped the competing bidders would use his son as theirbuying 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, anagent with ReMax Escarpment Golfi Realty Inc., sayswhat 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 listing agent in the Vanderdeen-Fenech case isn't on the Golfi team.

The agent declined an interview,but his office said it hopes areview shows he is "100 per cent innocent." Vanderdeen-Fenech'sbuyingagent 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 jumped38 per cent, he says, which is "one of the largest jumps we've seen."

The number of disciplinary actions hasn't increased. Ofthose 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

Buchansaid 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.

Thecode of ethics states an agent can disclose the number of offersbut cannot reveal the substance of anoffer or who is making it.

If the listing agent did break the rules, the possible outcomes range from coming to a resolution with the complainantto the agent losing theirlicence.

Donna Bacher, president of the Realtors Association of Hamilton-Burlington (RAHB), said in a written statement the boardhasn'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 inat 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 willsay, 'I better shut it down before I get complaints against me.'"

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