Careful

PAW modified

Karan called me late Saturday night during my religious dog-walking time. “I need help,” he said. I growled. Email me.

He did. “First, I want to apologize for calling you at that time,” he said. “But, truly speaking, I am so confused and do not have any expert to get advice from. I came across your blog and hope you can help me.” After reading the rest of his story and corresponding with him, I agreed. It’s a cautionary tale destined to make you think a little less of organized real estate.

K’s a moist first-time homebuyer who spent time shopping in Kitchener, where nice houses still cost less than three bills. On September 9th he teamed up with an agent from Brampton, Karambir Sira, to make an offer on a K-W property. After a couple of sign-backs, the deal fell apart, Karan says, because of multiple offers.

“The thing is, he got my signature on a BRA (buyer representation agreement) when we put in the offer, by telling me that it is just a legal paperwork for that particular property.” In fact Karan claims the agent said it was “all routine” and he signed the form before it was filled out. (The agent has since disputed this allegation.)

Well, like I said, the deal went south. K went his separate way and started looking at other places. He says he found a FSBO he liked and on September 14th made an offer of $280,000, which was accepted. The deal closed Monday.

“I saw the property myself on Comfree,” he says, “meanwhile the agent also sent me an email regarding that same place, but I told him I already knew about it and would deal directly with the owner. He agreed to that. When I bought I told him, and he even congratulated me.”

Well, guess what? Agent Sira sent Karan an invoice for $9,492, representing $8,400 in commission (3% of the sale price) plus $1,092 in HST. “He is now harassing me,“ Karan says. And no wonder.

The BRA K signed is not for the property our guy originally made an offer on (which failed), but for any property meeting the description of “Single Family Residence” in the location of “Kitchener.” It is not specific to the day of the offer, but for a period of 10 days, plus an additional ‘holdover’ period of thirty days.

In other words, if Karan were to make an offer on any house in the entire region of Kitchener at any time during this 40-day period, then Karambir Sira will be paid, whether he is involved in the deal or not. This BRA also stipulates that the compensation Sira can expect is 3%, plus tax, of the price paid. If K found a house and used another agent, who was paid by the seller, then Sira would also receive payment – but this time from the buyer. Ditto for a FSBO deal.

Without a doubt, Karan signed. He admits it.

Did the agent explain this to you, I asked? K claims no. “He just said that that was routine and he is representing me to buy that day only,” says the distraught first-timer.

Well, I emailed Mr. Sira, of Save Max Real Estate Inc., to get his side of the story. No reply. So I called. “I will not be responding to your email,” he said, “because I spoke with my broker of record and this is a private matter, between me and the buyer. I cannot disclose anything to you.”

Did you explain the implications of the BRA to the buyer? “Yes, I always do.”

Do you believe the buyer understood he would have to pay you commission if he bought another home without your assistance? “Yes, absolutely.”

If K refuses to pay this, he’ll probably be sued. He’ll probably lose. Of course he can lodge a complaint with the toothless real estate regulator, but it won’t get his nine thousand bucks back. So instead of buying a house at a supposed discount from a FSBO passing along the savings from no commission, he ends up whacked himself.

BRAs are toxic agreements doing an excellent job of ensnaring unsuspecting buyers, which is why you should never, ever sign one. I have no idea if agent Sira explained this evil document to the buyer, or not, just as I cannot prove Karan’s statements. But the agent did cast a wide net, saying he would be compensated not just in one deal, but in any deal for any house in an entire city for over a month.

Karan was a fool. Most virgins are. He’ll pay handsomely for it. His folly was believing it’s ridiculous to pay a real estate agent a big commission in a deal the guy had nothing to do with, for work undone.

But that would just be fair. How naïve.

167 comments ↓

#1 The Firstest With The Murstest on 10.27.14 at 6:30 pm

FIRST!

Too fast for ya, huh? I said too fast for ya, huh?

#2 Alero01 on 10.27.14 at 6:31 pm

Thank you for sharing Karan’s story, Garth. Given the very large audience that your blog attracts each day, you have done more to educate the masses about buyer representation agreements than any of the realtor associations in the country have ever done. Please continue to do your good works – they are greatly appreciated.

#3 view on 10.27.14 at 6:33 pm

Everyone is out to get you eh!!

#4 A fool separated from his $ on 10.27.14 at 6:37 pm

That’s a real shame but a signed doc is a signed doc and with that the trust is forever lost. But I guess the agent doesn’t care for word of mouth future business. It’s all about being paid now.

If I was the buyer i would send this to media outlets. They always like a good heart bleed story. Pay them the comm but state the facts to the media and see if they get any future business.

Real shame.

#5 Weldon Smenth on 10.27.14 at 6:38 pm

If Karan gets sued, but does not pay, would he have to go to jail? How is the enforcement of payment of $9k done by the realator’s lawyer in a situation like this?

#6 Derek R on 10.27.14 at 6:40 pm

House-buying… More dangerous than you think.

#7 Arfmooocat on 10.27.14 at 6:41 pm

$75 dollar oil isn’t good for Alberta’s boom

#8 blue steel on 10.27.14 at 6:41 pm

Hopefully the discussion of Mr. Sira and Save Max Real Estate Ltd in tonight’s blog will make him reconsider his stance.

This is another example of Real Estate agents being scum.

#9 Young Boomer on 10.27.14 at 6:43 pm

The realtor we used to sell our last home a few years ago before turning to renting has been in the business over 25 years. When we interviewed him he said something I remember well, “It’s never worth screwing someone over 10 grand, I have many long term clients who have bought and sold several times.”

#10 Randy Macho Man Savage on 10.27.14 at 6:44 pm

How about the all Canadian big bank portfolio strategy? On average, it has pumped out 11% per year for the last ten years.

http://www.theglobeandmail.com/globe-investor/investor-education/should-i-bank-on-an-all-bank-portfolio/article21295299/

#11 too much debt on 10.27.14 at 6:48 pm

Karan…contact the local news paper and TV station about a story on the pitfalls of buying real estate and explain your story. I am sure their consumer advocacy reporter would love to hear this story. You can then see how Karambir Sira feels about pursuing this further when he is plastered all over the news.

#12 Herb on 10.27.14 at 6:49 pm

Garth there is a “faint hope”. Have Karan ask the agent to provide Form 301 ‘Release From Buyer’s Agreement”. Karan will have to state his reasons for asking for cancellation, and blank form without explanation but assurances of insignificance may cause the agent to desist, since it has to go to the Broker for approval, and the broker may not appreciate this way of doing business.

#13 TO Renter on 10.27.14 at 6:51 pm

We’re all pressed for time, or think we are.

Who reads the fine print on websites before hitting “agree”?
Who references a store’s policies before buying?
Who reads an agreement, every word, before signing?

Always so reassuring to get the T&Cs for something, later, with the disclaimer that the vendor can change anything in it, anytime, without notice.

Pressure tactics on one side, and naive busy people on the other, make for a fool a minute. Real estate. Mutual funds. Insurance. Utilities. Employment.

Read everything, make sure its filled in completely and as you expect, pause and get advice on anything you don’t fully understand, ensure you have a copy of what you signed, and file it safely.

Anticipate that whatever you just signed or agreed to was written by a lawyer to forever advantage the side you aren’t on, and beware.

#14 Corban on 10.27.14 at 6:52 pm

is Bandit taking liberties?

#15 Retired Boomer - WI on 10.27.14 at 6:53 pm

Karan is a dim wit fool. He FAILED too read the BRA, now he has his tit in a wringer a $9,492 wringer to be exact.

People who sign contracts WITHOUT READING THEM deserve the hosing the legal entanglement ascribes.

Tough noogies Karan, next time you should READ before you sign, and understand that what is written is exactly what it means.

Don’t understand it, refuse to sign it. The Realtor, or car seller, or vacuum salesman will have to deal with your decision.

CASE DISMISSED!!

#16 ILoveCharts on 10.27.14 at 6:54 pm

Could have bought a Kia for $10k. What a mess.

#17 ILoveCharts on 10.27.14 at 6:55 pm

I think some of you (our kind host excluded,) may find this interesting as well.

http://www.bostonmagazine.com/news/article/2014/09/30/chinese-real-estate-boston/

#18 Paul on 10.27.14 at 6:55 pm

It only covers listing during the 10 days then the hold over for 3o days on any property the agent introduced the buyer to in the 10 days.I believe

#19 Cicid on 10.27.14 at 7:00 pm

That picture is the cat’s meow!

#20 Forzudo on 10.27.14 at 7:02 pm

Probably not a good idea to choose a buyer’s agent from a city 75 Km away from the city where you intend to buy.

#21 TEMPORARY® Foreign Prime Minister on 10.27.14 at 7:02 pm

Karan may not be a fool; just a little naïve and a little too trusting, the paradoxical hallmark of many voting Canadians. The first warning flag should have been to deal with someone who flaunts their pathetic career in capital letters.

Sounds like Karan need help from a few friends in low places.

I have a couple in mind that are very talented at persuading people to change their misguided minds.

#22 Alberta Ed on 10.27.14 at 7:12 pm

Another example why the real estate industry should be regulated just as financial institutions are. Too bad no one in Parliament is listening.

#23 3s on 10.27.14 at 7:17 pm

Karan could print off this post and go and camp out at the agents office distributing it to all prospective victims….

#24 Cicid on 10.27.14 at 7:20 pm

I say “Burn the RE Bra!” – It has no place in modern society.

And, K…don’t pay that bastard.

#25 ozy - Karan is golden on 10.27.14 at 7:22 pm

the holdover should be only for properties he was introduced to, so 10 days only BRA is not bad,
not 40 – but don’t quote me, read the clause

plus, I bet a judge will corroborate the story and will RULE toward the HONEST party…. so, if K is truly honest and Canadian law hasn’t become a FARSE, he should win…

if K can show the judge his ORIGINAL COPY of the BRA, signed in BLANK – guess what…. is proves more or less he signed without being aware what he signs…

but Karan, should have been honest and used the agent (hey, the guy even told him about the property)… I bet the agent would have been able to get the FSBO at better price….

lessoned learned I guess, all sides

#26 Mike in Bby on 10.27.14 at 7:24 pm

More real estate pumping by the Vancouver Sun. Apparently, prices are not so unaffordable in the lower mainland of BC after all:

http://www.vancouversun.com/business/Shelley+Fralic+Housing+affordability+Metro+Vancouver+real+issue+expectations/10326688/story.html

However, the author ignores all other ownership costs and just uses monthly mortgage payment; and even that is an arbitrary figure.

#27 ozy - did FORD WIN yet? on 10.27.14 at 7:24 pm

did FORD WIN yet? Olivia newton john is the most well intended, but hey we all know, good intention can lead to disasters

as for the other story candidate, too smart (read tricky) for the job :) not sure he will not raise taxes, I don’t trust him

#28 frank le skank on 10.27.14 at 7:25 pm

What’s the big deal? I’m sure he’ll recover the loss in a few months since housing will increase 7% each year to infinity. I mean, come on, considering that ZIRP will be here forever we can all afford to be careless when making a purchase of this magnitude. /end sarcasm

#29 TEMPORARY® Foreign Prime Minister on 10.27.14 at 7:26 pm

#22 Alberta Ed on 10.27.14 at 7:12 pm
Another example why the real estate industry should be regulated just as financial institutions are. Too bad no one in Parliament is listening
=========================

Agreed. Laws are enacted to legislate a conscience into those who were born without one.

Unfortunately, too many of our current politicians were born without one as well.

#30 vatodeth on 10.27.14 at 7:27 pm

The BRA is completely one-sided and doesn’t protect the Realtor. It has zero benefit to the buyer. No one in their right mind would sign one, knowing exactly what the details are. It’s simply a scam for Realtors and should not be legal.

#31 Eric on 10.27.14 at 7:34 pm

Sorry Karan but today you are the greater fool. Go out and sell your house to a greater fool. There should be plenty of them in Canada.

#32 vatodeth on 10.27.14 at 7:34 pm

By not protect the Realtor, I mean the form does more to trap the buyer than protect the Realtor.

The form should require the buyer’s initials beside each specific condition of the agreement. Then people would know exactly what they’re signing.

Bottom Feeders…

#33 waiting on 10.27.14 at 7:34 pm

More less than up-lifiting BRA stories

http://www.thestar.com/business/real_estate/2011/04/03/roseman_a_buyer_agreement_with_a_realtor_can_be_risky.html

#34 Figmund Sreaud on 10.27.14 at 7:35 pm

Well, … there is another – far more insidious way to get firmly hooked by realtor! All you have to do is agree, verbally, casually, to the “convenience” of a PCS web service (Private Client Service).

The realtor, promptly, sets one up for you, sends you an access password, et al. You sign in, don’t read carefully the fine print, you view properties, PCS updates itself few times per day – everyday, … and you’re stay hooped!

As good as BRA, I’m told!

F.S. – Calgary, Alberta.

#35 Paul on 10.27.14 at 7:37 pm

#22 Alberta Ed on 10.27.14 at 7:12 pm

Another example why the real estate industry should be regulated just as financial institutions are. Too bad no one in Parliament is listening.
————————————————————-
They are regulated who do you think came up with these contracts. They were brought in by the powers that be so there would be no confusion in which agent is representing each side of an agreement. Especially when agents are being accused working both sides of the fence as when they are multiple offers and the listing agent has his own offer. You can’t win

#36 james on 10.27.14 at 7:43 pm

“Karan was a fool.”

Well, putting aside the BRA, he was buying in Kitchener during a housing bubble. Double fool.

#37 Ole Doberman on 10.27.14 at 7:46 pm

I told you guys what is supporting real estate is international capital flows getting money off the grid:

http://armstrongeconomics.com/2014/10/27/the-new-real-estate-bubble-or-something-else-is-going-on/

That’s why this bubble is illogical and still has a long way to go. The market can stay irrational longer than most can stay solvent.

#38 Bob Copeland on 10.27.14 at 7:49 pm

What a recovery. Everybody is desperate. Everything is a scam. Everybody has to be a lawyer to protect themselves. Say what you will. Man I miss the old days.

#39 waiting on 10.27.14 at 7:51 pm

Here’s a link to the Toronto Real Estate Board BRA form. It has a disclaimer in huge honking red font on the front page – enough to make someone at least take a second look and wonder what they’re getting into. Do all boards use this disclaimer?
http://www.torontorealestateboard.com/buying/plain_language_forms/pdf/300_PL.pdf
I agree with #15 – just DON’T sign it, or anything you don’t have too.
I spent a futile 10 minutes the other day trying to get an MBNA rep to acknowledge that they were charging me a fee for “insurance” that I had never requested or agreed to. Instead, she kept saying “you must have forgotten – it’s been there for many years” and extolling the virtues of having it. When I said I rarely used that card and had only used it for more than $100 recently, she said “oh that’s why, the insurance is only charged if the monthly amount is over $100” to which I replied – “then you understand – I’ve never seen this charge before”. I was able to cancel the fee, but could not get her to acknowledge that it was charged without my consent. I always check my statements, no matter how small for just this type of thing.

#40 Mark on 10.27.14 at 7:54 pm

“How about the all Canadian big bank portfolio strategy? On average, it has pumped out 11% per year for the last ten years. “

Bank outperformance relative to the rest of the stock market can’t last forever. Banks are already 40% of the TSX. There is a realistic upper bound to what they can be as a percentage of the major stock market index in Canada, and 40% is definitely in the upper extremities.

Personally I’d rather a basket of dirt-cheap producing/mining gold shares, and some beaten up oil and gas shares, over the banks right now. That’s not to say that the banks can’t continue to do well, but other sectors of the economy have to eventually start taking the lead.

#41 Mark on 10.27.14 at 7:56 pm

“I told you guys what is supporting real estate is international capital flows getting money off the grid:”

Where is this ‘money’ then? Why is Canada’s RE bubble characterized by extreme leverage rather than actual cash purchases then? Maybe there’s cash demand for international RE, but in Canada, its nearly entirely bought on credit, usually subprime credit.

#42 Frumious Bandersnatch on 10.27.14 at 7:56 pm

Speaking of naivté, I signed a BRA with my real estate agent when I was shopping for my first condo in 1998. While she did explain that it meant that if I bought any place within a certain time period, she would get commission from the sale, it never occurred to me that I might have found a place on my own and bought it during that time.

Fortunately, that situation did not arise, and she busted her buns to find me a high-rise apartment that was exactly what I was looking for. (I had a relatively unusual list of must-haves and deal-breakers.) However, the listing agent wasn’t interested in splitting the commission, so kept us from viewing it until he had already sold it to someone else. My agent assured me that this was against the rules, but it probably wasn’t worth complaining about, especially since she had only recently acquired her licence and he was an established, high-volume “condo specialist.”

She then contacted every other owner in the building of a unit with the same floor plan and panoramic view to see if they wanted to sell, and one did. I bought that unit, even though it was five floors below the first one and thus had its view partially obstructed by a lower high-rise, cost a couple of thousand more, and needed new paint, carpets, and window coverings. After I fixed it up, though, it was even nicer than the first place (except for the view).

In retrospect, if I hadn’t signed that BRA, I could have purchased that first place from Mr. Condo Specialist and shut her out of the deal, but it was her hard work that found it for me in the first place, and unlike him, I actually have ethics.

So ultimately it worked out well for me, but only because I lucked out by signing that BRA with an ethical, hard-working real estate agent. Of course, if Garth’s blog had been around back then, I wouldn’t have signed the BRA in the first place.

#43 Snowboid on 10.27.14 at 7:59 pm

Good advice on BRA agreements, but you may feel the wrath of the Golden God of Okanagan Real Estate – or has he been banned again?

Update from the Valley of the Sun:

As we arrived last week to 36C temperatures, we were amazed at all the new construction within about five miles of our home.

After driving around a bit more, shopping and the like, it’s obvious there is a mini-boom in construction going on here, at least in the NW valley.

It’s usually a slow time here as the snowboids slowly trickle down from the north, but last few days restaurants are packed, stores are busy and traffic is crazy.

Maybe it’s all the rain in the last couple of months, the first time we’ve seen the desert areas so lush and green!

Prices are up on a few items, but still about 30% less than Canada exchange included – except for booze (only up marginally) and gas which remain substantially lower in price.

$20 CAD for 30 cans of beer isn’t bad. Filled up the beast today, premium at .87 a litre CAD. Kelowna is showing 1.429 a litre today at the station we frequent.

Neighbours have already rented their home for $ 12,000 for Super Bowl week – crap, wanted to avoid any US income for tax purposes – but that is sure tempting!

Have to go, the BBQ is hot and the beer is cold – gonna gain some weight for sure this winter.

In the meantime, never sign a BRA (or whatever the agent tells you are signing).

#44 not 1st on 10.27.14 at 8:01 pm

Geez, I have been posting my snarky comments here when all the time I could have just called Garth up and told him in person.

#45 mark on 10.27.14 at 8:01 pm

What a scumbag.

First, who would ever sign that if they knew what it was? But second, who could even accept money for a deal they had nothing to do with.

I’d be embarrassed to accept that money, let alone heavy someone to try and get it.

#46 Paul on 10.27.14 at 8:08 pm

#40 waiting on 10.27.14 at 7:51 pm

Here’s a link to the Toronto Real Estate Board BRA form. It has a disclaimer in huge honking red font on the front page – enough to make someone at least take a second look and wonder what they’re getting into. Do all boards use this disclaimer?
http://www.torontorealestateboard.com/buying/plain_language_forms/pdf/300_PL.pdf
I agree with #15 – just DON’T sign it, or anything you don’t have too.
———————————————————-
IT IS NOT RED ENOUGH!IT COULD BE TATTOOED ON PEOPLES FOREHEAD AND THEY STILL WOULD NOT GET IT.
AND BITCH LATER DON’T UNDERSTAND DON’T SIGN.

#47 Millenial on 10.27.14 at 8:09 pm

“When I bought I told him, and he even congratulated me.”

I never understand stuff like this. You’re making a major financial transaction and you’re just casually broadcasting it to a stranger? Why tell him if he had nothing to do with it? Karan is clearly a trusting and naïve soul, who has never been hustled.

#48 Colin on 10.27.14 at 8:12 pm

Garth, you’re too kind. Why not include Karambir Sira’s good name in the title of this blog post to assist future clients of his doing their due diligence?

#49 crossbordershopper on 10.27.14 at 8:13 pm

there is nothing like this in the usa. its simple, one lawyer agreement, no land transfer tax and the keys are yours, you do your own inspection on the property.
this whole canadian experience of buying real estate with crazy leveraged borrowing for crazy priced drywall and chinese papermache wood is crazy.
and people laugh at my income producing real estate for 20 grand.
i dont have or need real estate agents, no bra’s, no nothing. like the tax lawyer on the radio saids, you win by changing the rules of the game, to your advantage.
Canadians are funny.

#50 Sk Driver on 10.27.14 at 8:18 pm

Mr. Sira and Save Max Real Estate Ltd

No such thing as bad press?? I beg to differ…

;)

#51 on a Go bus to home on 10.27.14 at 8:21 pm

Can he not speak to the seller, cancel the deal and resign after 40 day period? Could even give the seller 3k more and is still 6k better off. Seller would be willing to go through hassle for 3k.

#52 Kenchie on 10.27.14 at 8:21 pm

#17 Booming Burnaby on 10.26.14 at 1:11 pm
“Dear Garth & his renter followers,

I’d like to express my sincere gratitude for all of you real estate bears. Because of you guys, I havent had much problems renting out my investment properties and generate wealth through my rental incomes. Once again, thank you all!”

What year did you buy?

#53 -=jwk=- on 10.27.14 at 8:45 pm

The red text on the form is disgusting, I mean really, really disgusting. Go read it. Seriously, go actually read it what it says.

The best part: “Everyone is encouraged and it is recommended that everyone seek and obtain professional advice to ensure a complete
and accurate understanding of any Form and not rely on the explanations contained herein.”

And, where oh where mighty gods of realtor-dom would I get that ‘professional advice” from? My trusted professional realtor ™ – the very same person who gave me the form. How convenient….for them.

I thought Garth’s stance on BRA was a little harsh. Now that I have read thing, I could not agree more.

No one should ever sign this form, for any reason, ever.

Oh, and when you are looking for a realtor, don’t use one called “Save Max Real Estate”. Seriously, that should have been your first clue.

#54 devore on 10.27.14 at 8:48 pm

#5 Weldon Smenth

If Karan gets sued, but does not pay, would he have to go to jail?

No one goes to jail, this is not criminal, just contract law, a civil matter. They have ways of making you either pay, go bankrupt, or drag out the case in courts for years, those are your options.

#55 Ben on 10.27.14 at 8:52 pm

Regulate these scumbags. Better yet legislate to make transactions foolproof then buyers and sellers can deal direct without having someone who adds no value taking a whacking 3%. Let’s have a simple legal template and then let the govt stipulate a *flat* fee for processing it which estate agents can process if they so wish.

What else do these guys do besides navigate unnecessarily complex legal waters? They turn up and confirm that yes this is the house for sale and open the door. That is not worth 3%.

#56 robert james on 10.27.14 at 8:57 pm

Feel free to email Karambir.. I am sure he would love to hear from you all…. http://www.myvisualhomes.com/Teamsira

#57 devore on 10.27.14 at 9:03 pm

#10 Randy Macho Man Savage

How about the all Canadian big bank portfolio strategy? On average, it has pumped out 11% per year for the last ten years.

Sounds risky, concentrating everything in such a small number of companies in the same sector. The last 10 years has seen steadily dropping rates alongside increasing debt and debt service costs. This is great for banks.

How does this portfolio compare to similar portfolio of US banks? How does it model in an environment of deleveraging?

#58 Rosholt on 10.27.14 at 9:05 pm

Sucks to be him but he signed the papers.

#59 Ask Your Realtor to Take Off Her B.R.A. on 10.27.14 at 9:07 pm

Anti-competitive cartel crap. So much of the RE industry is all about creating artificial and valueless exclusivity.

Why don’t you 39,000 losers in the GTA try to provide value for money and actual work instead?

And no, your lazy “list and wait” strategy does not count as work.

I would not hire most realtors to stoop and scoop after my dogs.

The next few years will weed out the losers and incompetents among those 39,000.

I figure there should be about 5000 left by 2020.

#60 Rosholt on 10.27.14 at 9:11 pm

You can email your thoughts here:

http://www.realtor.ca/RealtorDetails.aspx?IndividualId=1874439

#61 Son of Ponzi on 10.27.14 at 9:13 pm

#39 Bob Copeland on 10.27.14 at 7:49 pm
What a recovery. Everybody is desperate. Everything is a scam. Everybody has to be a lawyer to protect themselves. Say what you will. Man I miss the old days.
——————
Hear you man.
A firm handshake sealed the deal.
Now you’ve got to count your fingers.
They put the devil in the details.

#62 X on 10.27.14 at 9:14 pm

The lack of regulation in an industry where most Canadians have most of their net worth is entirely gutless on the part of the gov’t.

#63 Joe2.0 on 10.27.14 at 9:15 pm

I would also approach the media.
The downside is some people will mock you for not reading the contract thoroughly.

BUT
There are people who will understand that you expected a friendly used house salesman to give you this info(verbally) up front and not hit you with a bill after you’ve closed.
People can get excited when looking for RE.

It’s premeditated and it’s BS.
People who are”working for your interests” don’t pull s..t like that, i would make a big deal.

How about setting a petition up on this blog?

#64 Rosholt on 10.27.14 at 9:18 pm

DELETED

#65 Kenchie on 10.27.14 at 9:22 pm

Garth,

Thanks for reminding us of the evils of unscrupulous realtors. I was worried for the first few paragraphs of your post today because I have a buddy with K’s name and he recently signed up for a pre-construction condo in DT Toronto.

Hopefully justice will prevail with a judge throwing out any future lawsuit.

#66 Beaver Buzz on 10.27.14 at 9:22 pm

Thanks to #62, I emailed the agent with the following message:

Hi Mr. Sira,

Congratulations on the free publicity courtesy of http://www.greaterfool.ca/2014/10/27/careful-5/#comments

That article shows up third on the google search: sira real estate toronto

We’ll see if we can bump it up to #1.

#67 Glinter McRaynold on 10.27.14 at 9:27 pm

@ #55 Devore

” or drag out the case in courts for years, those are your options.”

What if Karan just doesn’t show up to court?

#68 ted on 10.27.14 at 9:28 pm

Save max real estate?
Lol

I bet remax etc are less douchey

#69 Paul on 10.27.14 at 9:31 pm

The only thing worse the a 30 day B.R.A is a 300 day election campaign

#70 devore on 10.27.14 at 9:31 pm

#18 Paul

It only covers listing during the 10 days then the hold over for 3o days on any property the agent introduced the buyer to in the 10 days.I believe

Read it again, more carefully. Any property matching the description “shown or introduced to the Buyer from any source whatsoever“, not just by the agent. So if the agent can reasonably show the buyer knew of the property during the 10 days, regardless of how he found out about it, he is owed his commission.

Since it will come down to “he said she said”, most convincing will be the only facts available: was the listing live during the 10 days, was the house already for sale? If it was, good luck trying to prove otherwise. Especially as “should have known” seems to be the standard in real estate law.

#71 AK on 10.27.14 at 9:36 pm

Lower Oil in the forecast. Including, Gartman … LOL..

#72 Peter Tarshis - Toronto Realtor on 10.27.14 at 9:44 pm

Hi Garth,

As mentioned I do enjoy your Blog which brings out the worst in Real Estate agents, the Government & the state of the Real Estate market esp in the over- inflated, low interest Toronto market.

Yes there are agents who do not explain the Buyer Rep agreement fully / properly. I make it for just the one property shown or in a listing for Sale I include a termination clause until the new client relationship is established. Of course when the deal is done the Buyer Rep becomes a needed purchase doc.

I live on Referrals, Testimonials with satisfied clients.

Have you been treated fairly by me & do you recommend any Toronto Real Estate agents? :)

Cheers, peter

#73 Kenchie on 10.27.14 at 9:48 pm

“Canadian 30 year-olds are screwed”. It’s a newsletter from 2011, but still relevant today. It’s quite sobering for millennials…

http://www.kurtismycfo.com/eNewsletter/Canadian%2030%20Year%20Olds%20Are%20Screwed.pdf

#74 Kenchie on 10.27.14 at 9:49 pm

“What kills you and your investments”

http://www.bloombergview.com/articles/2014-05-21/what-kills-you-and-your-investments

“Stop fearing the wrong things”

http://www.bloombergview.com/articles/2014-10-22/stop-fearing-the-wrong-things

Happy reading!

#75 Jackofall on 10.27.14 at 10:02 pm

What a fantastic display of humanity. Anybody with any piece of a conscience would have refused to accept commission for a deal they weren’t involved with, even if the buyer was aware of it. What a poor excuse for a human. I hope this article gets propagated throughout Kitchener and that the agent has a real hard time finding his next sucker. Shame on him and all agents like him. And shame on his brokerage for condoning that sort of behavior. Just disgusting.

#76 BC Nurse Prof on 10.27.14 at 10:12 pm

So Glenn Greenwald speaks in Canada and tells the audience that Harper is using the recent attacks to further erode civil liberties:

http://www.commondreams.org/news/2014/10/27/greenwald-harper-government-exploiting-recent-attacks-expand-powers

#77 Nemesis on 10.27.14 at 10:14 pm

“Karan called me late Saturday night during my religious dog-walking time.” – Hon.GT

Who’d a thunk it… but, as it happens, there are actually bona fide religious dog walkers…

http://youtu.be/WZd2nT2Afds

[NoteToGT: Just between the two of us… it’s rather ironic, don’t ya think, how closely the Monks lives resemble those of married men… You know, that whole chastity/poverty/obedience thang.]

#78 devore on 10.27.14 at 10:14 pm

#69 Glinter McRaynold

What if Karan just doesn’t show up to court?

Then there will be a judgement against him almost certainly, and if he refuses to pay, it will be sent to a collections agency and his life made generally unpleasant. It might also go to wage garnishment.

#79 Freedom First on 10.27.14 at 10:20 pm

Poor Karan. Getting screwed out of about $10,000 sounds painful, but is actually a pretty cheap lesson in learning that ignorance is not bliss, but expensive and painful.

Reading Garth’s free Blog from the beginning until today is a very good deal. Had Karan being doing this he would not have made this costly blunder. As a matter of fact, if everyone read and followed Garth’s entire Blog advice on every financial area of their lives, many many many unscrupulous unethical and financial deviant business people would be out major$$$$$$$$$$ from their incomes. Garth has even named many of these monkeybusiness people for us, but he won’t show many of their replies to him on his doing this, as they are too sexually deviant as to what they would like to do to Garth’s body orifices. Garth is honest and helps people, so, of course, many people hate his guts, as he tells the truth. His lifetime record proves this, and they know it, so they haven’t been able to stop his #1 Canadian Personal Finance Blog. Garth wouldn’t even stop this Blog for his former boss. Our gain. Thank you Garth. Keep
giving it to them all, they’ve earned it

#80 Bobby on 10.27.14 at 10:24 pm

In the recent edition of Moneysense magazine, the editor writes an opening article about buying real estate. The premise of his article is don’t trust anyone.
Looking at Garth’s article here, it is certainly true.

#81 KWDan on 10.27.14 at 10:44 pm

Great article Garth

Would like your opinion some time on real esate in the tri-cities ( kitchener, waterloo, cambridge)

Take care

Dan

#82 Herb on 10.27.14 at 11:01 pm

#74 Peter Tarshis,

“… when the deal is done the Buyer Rep becomes a needed purchase doc.”

Why? By what law?

#83 lurker on 10.27.14 at 11:20 pm

While I agree, those agreements are crap.

The agent worked for the guy on the first house, he even helped put together an offer, present it, do multiple sign backs etc.

For this he made 0$

The intent with these agreements is that if you work with an agent, they’re willing to defer their payment, as long as they get paid when you are finally successful in getting a house.

This agent definitely misrepresented the contract, but I don’t think agents should work for free.

#84 Happy Renting on 10.27.14 at 11:20 pm

#81 Freedom First on 10.27.14 at 10:20 pm
Poor Karan. Getting screwed out of about $10,000 sounds painful, but is actually a pretty cheap lesson in learning that ignorance is not bliss, but expensive and painful.

My thoughts exactly. Fight it if you can, Karan (suggestion from Herb #12). If you lose, at least get $10,000 worth of public education out there (besides Garth’s blog) about this used house salesman and the BRA you signed. Lots of virgins who need better awareness.

#85 kommykim on 10.27.14 at 11:33 pm

RE: #25 ozy – Karan is golden on 10.27.14 at 7:22 pm
but Karan, should have been honest and used the agent (hey, the guy even told him about the property)… I bet the agent would have been able to get the FSBO at better price….

Nah, that realtor would have told him there will be other offers and that he should raise his own offer just to be sure of “winning”.

#86 kommykim on 10.27.14 at 11:38 pm

The BRA: It lifts and separates you from your money.

#87 The Real Deal on 10.28.14 at 12:02 am

Technically, hasn’t Karan signed some document with no details filled in and the agent has altered the contract.

For expediency, I understand why people sign unfilled paperwork, but if the agent misled the buyer, can’t the buyer argue he signed an incomplete document (stating nothing) and that the agent revised the contract after the fact.

All the buyer has to do is prove he signed before the salient information was added by the realtor, and he should not be bound to the additional items.

#88 Small Business on 10.28.14 at 12:12 am

Well, i think phoning your former realtor to tell him you just bought a house on com free was a bit of a dick move.

“Hey, i just saved 1000’s by buying it on my own! That’s awesome, right?”

“Yeah, glad to drive you around to those houses and make those offers for free, it was an awesome experience”

#89 RealistvsExtremist on 10.28.14 at 12:35 am

#73 AK on 10.27.14 at 9:36 pm
Lower Oil in the forecast. Including, Gartman … LOL..

++++++++++++++++++++

Interesting how the price of gas barely moves down. The last time oil was this low here gas was 0.93 cents. Now its $1.23. Where is this low inflation we keep hearing about?

#90 RealistvsExtremist on 10.28.14 at 12:39 am

#78 BC Nurse Prof on 10.27.14 at 10:12 pm
So Glenn Greenwald speaks in Canada and tells the audience that Harper is using the recent attacks to further erode civil liberties:

http://www.commondreams.org/news/2014/10/27/greenwald-harper-government-exploiting-recent-attacks-expand-powers

+++++++++++++++++++

And just like in every other Stasi in the world, the people always let it happen, the people get hurt then the people take it away. History does not repeat but it sure rhymes nicely.

#91 Tony on 10.28.14 at 12:42 am

Re: #76 Kenchie on 10.27.14 at 9:49 pm

Bloomberg are hucksters guaranteed to lose you a lot of money if you follow their advice.

#92 Happy Renting on 10.28.14 at 12:47 am

#75 Kenchie on 10.27.14 at 9:48 pm
& #76

I enjoyed the reads, thanks for the links. The “30 year olds are screwed” piece does a good job honestly depicting the causes and hinting at the enforced austerity many may experience in the years ahead.

#93 DonDWest on 10.28.14 at 12:54 am

Karan is being given bad advice. Telling him to pay up the 10K as a “learning experience” is for losers.

Karan, if there’s one thing I’ve learned about beating capitalist SCUMBAGS the past three years, is that you must chuck your morals aside. Nobody gives a crap about your morals. You must ENJOY manipulating these slime buckets without a second of remorse.

Karan, this is what you must do, you must speak the language that Karambir Sira understands:

Karan: Mr. Sira, we apparently have a problem. This isn’t my signature on the BRA agreement.

Sira: What do you mean?

Karan: I mean, this isn’t my signature. The cursive writing is clearly not my own.

Sira: Bullshit, I saw you sign it!

Karan: Do you have a video recording of it?

Sira: No.

Karan: Geez, that’s too bad. I guess this isn’t my signature then. . .

Sira: Of course it’s your signature!

Karan: No, it’s not, you see. . . It seems I’ve picked up a “new” cursive writing style, how did that happen? Let’s see how this holds up in court.

Sira: But you did sign!

Karan: If the court believes I’m actually stupid enough to sign away 10K to you – then I signed, if not, you should know as much as anyone were this is heading Mr. Sira.

Sira: So, you’re going to commit fraud in order to set me up for fraud?!

Karan: Beautiful poetry, isn’t it?

Sira: You’re insane!

Karan: Yes, I’m a madman! Perhaps now you’re willing to negotiate?!

#94 Tony on 10.28.14 at 12:58 am

Karan should have taken business courses on how to invest when he came to this country. Kitchener real estate will probably only drop between 10 and 20 percent whereas the Toronto core will drop upwards of 80 percent in a condo meltdown.

#95 Mark on 10.28.14 at 1:19 am

When I moved back to Toronto from overseas, I wanted to rent a condo and had to deal with real estate agents and BRAs. Was surprised as I thought this would be only used when buying a place.

#96 Mousy on 10.28.14 at 1:52 am

Agree with #81. My lesson cost considerably more, but at night, still happy to be me instead of the other guy. Don’t know if others have said it, but perhaps best course of action is to let fellow bring claim against Karan and let chips fall where they may. Not sure of small claims court limit in his jurisdiction, but in BC it is $25K and there is a mandatory settlement conference before trial. Equity still has a place in the “everyman’s” court – small claims court. Let the agent defend his position in open court, ie. how he explained that the commission would be payable even if he had nothing to do with the sale and how Karan happily agreed to that. This evidence will need to be weighed against the evidence of Karan who will testify that no way he would ever agree to that…seriously who would. A credibility assessment will be made, and my money is on the real estate virgin, because why would he agree to that. Also, the subsequent conduct of the agent, ie. the congrats on the purchase suggests he didn’t think he had an enforceable commission agreement either…until somebody maybe pointed that out to him afterward.

#97 A Yank in BC on 10.28.14 at 2:31 am

I don’t see how the contract could be legally binding, if indeed Karan was coerced into signing it before it was even filled-in.

#98 Kevin on 10.28.14 at 7:27 am

I got hoodwinked by one of these agreements myself, back in the day. In 2000, my new wife and I went shopping for a home. We enlisted a realtor, signed what we were told to sign, and she started showing us houses. One weekend, my wife and I stopped into a builder’s Sales Center to look at a new development going up. They offered us $35,000 in upgrade credits, and we liked their model homes, so we made a deposit to buy a new construction home from them.

Days later, our realtor called us with some more homes to show us. “Good news,” I said, “we decided to buy a new home instead. Thanks for all your help.” After she congratulated us, she reminded us to tell the builder that we had a realtor. So the next time we met with the builder, I mentioned it.

Turns out that changed the deal. They could no longer offer us the $35,000 in upgrade credit (because, of course, they now had a realtor to pay). We’d already made the deposit and signed the Agreement to Purchase, so we were boxed in.

That agreement cost us $35,000. The realtor got her $11,000 in commission for showing us a handful of houses. I was pissed, but what could I do? It was my own fault for being too trusting. Needless to say, I have a much more cynical outlook of people nowadays.

#99 jerry on 10.28.14 at 7:47 am

There is of course a thousands stories of the Realtor Agent having shown the buyers 20 houses and then the buyer runs home and calls up their sister Margie who just got her real estate license, and the buyer “gives” Margie the “sale”.

The “BRA” agreement should only cover those houses/properties that were proven as being introduced and shown with the buyer. The “every single house” in the area nonsense is simply too broad in my opinion.

However, another excellent education piece to share with my kids!

#100 lee on 10.28.14 at 8:12 am

I think we can’t downplay the agent’s role in making the purchase easier. It was certainly easier to set an offer price after being educated by the agent on comparables, the neighbourhood, and what to look for in a house and when completing the offer. This is why agents believe they are entitled to commissions on any sale within 30 days, at least in the same area, (and 30 days is not bad, as some tie you in longer). I wonder if the purchase would have went so well if the buyer hadn’t benefitted from the agent’s helpful advice in the first case, which probably included advice that the sale price had gotten out of hand. This being said, the agent of course should make it clear to you what you are signing if he is acting for you, even though a court will likely say Karan should have read what he signed and objected at the time. I am just giving you the justification agents sometimes use in court to morally justify their commission on a sale like this. Had Karan read the paper work he could have done the second sale without wasting his own time, and maybe even gotten a better price or terms.

#101 Mr. Frugal on 10.28.14 at 8:35 am

We looked at a house and the realtor tried to convince us that we had to sign a BRA because we had viewed the house. We didn’t like the house and were NOT putting in an offer. But, she was adamant that we had to sign the papers. I knew what a BRA involved so I played stupid and asked her what the document involved. Of course she lied and told us that it was required because we had viewed the house – like an attendance sheet if you can believe it. I told her we weren’t interested and we were leaving. Then she starts spouting off that we need to sign or else. So basically, she was threatening legal action for not signing the BRA.

#102 Holy Crap Wheres The Tylenol on 10.28.14 at 8:44 am

#95 DonDWest on 10.28.14 at 12:54 am

____________________________________________

I LIKE YOUR THINKING!!!! BRILLIANT!!!!

#103 Holy Crap Wheres The Tylenol on 10.28.14 at 8:48 am

What happened to the good old days. When I purchased all of my homes, many years ago granted, I never signed any agreement. It was all done with a handshake. Progress?
This guy should go public and same the hell out of the realtor and the company. Karambir Sira, I’ll remember that name. Brampton what a cesspool.

#104 Polozified on 10.28.14 at 8:48 am

Choosing a Brampton based used house salesman to purchase in Kitchener was mistake #1.

Choosing something called “Sales Max Realty” was mistake #2 (or #1a, if you prefer).

#105 Paul on 10.28.14 at 9:06 am

00 Kevin on 10.28.14 at 7:27 am

I got hoodwinked by one of these agreements myself, back in the day. In 2000,
————————————————————-Hoodwinked by who? How did a $11,000 commission turn into a $35,000 price increase. Yoy should brush up on you math.

#106 Arby on 10.28.14 at 9:07 am

I got whacked by a BRA similarly when I was clueless a few years ago. The ‘holdover’ period was 90 days too.

We went to the agent’s boss and asked to be assigned to another agent in the same brokerage, because this guy was clearly looking out for his own interest, not his client’s.

But the boss said that’s up to the agent. The agent, of course, refused to let us go. We waited it out, which turned out good in retrospect.. the market & prices.

A couple of years later when we were interviewing agents again, my first condition was “no BRA” and a couple of agents walked out on us. Fine, we said. Then they call back 2 days later hemming & hawing, “We’ve thought about it and decided to work with you on that basis blahblah” :) (Of course, you have)

We said, “Well, we’ve thought about it as well, and decided NOT to work with you under any circumstances”

Never sign a BRA. You’ll always find agents who’ll work with you for the listings they show you. They won’t force you to use them for an area, or with crafty ‘holdover’ periods.

#107 Andrew Morgan on 10.28.14 at 9:27 am

First time poster, after reading Garth’s blog for at least 5 years.

Kudos to Garth for doing the decent thing by contacting Mr. Sira before publishing this story, who missed a golden opportunity to put himself in a reasonable (but still professional) light. Sira could have agreed with Garth’s request to let Karan out of the BRA, on the condition that Garth run this important story about the pitfalls of BRAs, but pointing out that such buyers will not usually have the good fortune of working with an agent (like Sira) who would kindly let them off. Instead, whatever unearned commission Sira now demands from Karan will be more-than-lost in the future, thanks to Garth’s story alerting the public as to what Sira *actually* did.

#108 Dupcheck on 10.28.14 at 9:35 am

He should leave a bad review online (google maps) or else about the RE agent explaining the details of this sketchy situation. You don’t need to lie, fact talk for themselves. This would cost the agent a lot more in the future. If he would want the review taken down, he should pay $9000.

#109 };-) aka Devil's Advocate on 10.28.14 at 9:37 am

Well, of course you just had to know that I would weigh in on this one.

I always have my clients sign a “BRA” in B.C. an “EBA” Exclusive Buyers Agency.

An agent working with a buyer works hard to help that buyer find and secure a property. Such an agent is constantly working in the background keeping an eye open for suitable properties for their buyer client. Buyers agents invest a lot of time and resources searching for that perfect property for their buyer. If you don’t commit to them how possibly can you expect them to commit to you.

Of course you don’t have to sign a BRA or an EBA. You can go out and shop it alone or you can reiterate to every REALTOR® you meet hoping that maybe they might have access to that perfect property you seek.

Fortunately the bulk of my business is listings. BTW You don’t have to sign a listing either, but if you don’t you can’t expect the same level of service.

Anyway, I know that many if not most on this blog won’t agree with me but really they don’t represent the typical real estate buyer. I have never had anyone refuse to sign a BRA or EBA. If I did I would understand and we would politely disengage.

My time is worth money. Don’t expect to hop in my car with me to have me if you are not prepared to commit. If you aren’t prepared to commit… no worries there are plenty who are.

Actually a BRA or EBA is a very valuable tool in the qualification process of a prospect client. It becomes very apparent very early on who you want to work with and who you don’t.

Those who will not sign a BRA or EBA need not be concerned for they can easily find an agent desperate for the business who will work for a client without a BRA or EBA. BUT you gotta ask yourself “why are they so desperate that they will work for me without a commitment from me?”

#110 Jacky O on 10.28.14 at 9:53 am

I’m not in agreement that K would lose out of hand. The Five C’s that define a contract are in question. This person’s problem is not that he would lose in court, but what it would cost him to win.

#111 };-) aka Devil's Advocate on 10.28.14 at 9:55 am

Oh and one more thing; you don’t need to use a REALTOR® to buy a property listed by a REALTOR®. You can enter into what is called a “Customer” Relationship in which case you have no REALTOR® and the Listing REALTOR® owes you no fiduciary duty. They still have to disclose material facts etc to you but they owe you little more duty of care than a car or tv salesman would.

Maybe investigate the law of agency to better understand what an agent or REALTOR® does.

Again, your call, use a REALTOR® or not. You get what you pay for… or not.

Some REALTORS® discount their commissions… and so they should. };-)

On a final note: Ever thought that just maybe the reason real estate fees are so high is to recoup compensation for all those fruitless hours some agent invest with an unqualified non committal prospect? Hey I’m not complaining… it’s workin’ for me, but then I qualify my clients and politely disengage from those it’s clear would be a waste of my valuable time.

#112 Cato the Elder on 10.28.14 at 9:56 am

I will never understand why people believe any salesperson with a conflict of interest is going to tell them the truth.

Realtors fit that definition to a tee. They get paid MORE when you SPEND MORE on your house. Why would they want to help you buy at the lowest price?

A fool and their money are soon parted.

#113 Cato the Elder on 10.28.14 at 9:59 am

I’m vicious when it comes to negotiations. I often won’t even buy/sell anything from friends because I don’t want to be overly hostile.

Why are Canadians polite to the extent that they’re willing to get ripped off? I don’t know. That’s not how I operate.

I go to war when I’m in a negotiation. It’s not easy earning money – why the hell would you want to give it up easily?

Silly Canadians.

#114 Bottoms_Up on 10.28.14 at 10:05 am

I can understand the ‘right’ purpose of a BRA, that is to ensure the agent gets paid, especially if they are putting a lot of time in to help buyers, that then turn around and buy on their own (in effect, screwing the agent of a paycheque). In these types of cases, the BRA is useful in protecting the agent.

However, in cases such as the one Garth describes, the BRA is being abused by the agent, and the buyer is being screwed over. I don’t know how these people can sleep at night.

#115 Renter's Revenge! on 10.28.14 at 10:06 am

#41 Mark:

I agree with what you said, generally. But I think the TSX is not very representative of the overall Canadian economy and its businesses. Large parts of it are privately owned, or run by the government. An alternative scenario, while not very likely, would be the commodity industry collapsing completely and everything in the TSX except the banks going private. Theoretically, the TSX could become 100% banks!

#116 cramar on 10.28.14 at 10:10 am

If you think that an Agent grabbing an easy $9k+ underhandedly is bad, consider this story.

When we were looking to move to Leamington in 2010 we developed a long-term relationship with a agent in the area. For 2 1/2 years, he showed as countless properties before we found the right one. He sure deserved his commission. Recently, two years later we took him on a tour of our completely renovated house. He left and returned 5 min. later, asking to borrow $20 for gas saying he left his wallet in the office. He promised to drop off the twenty in the morning as well as information on what properties are selling for in our area since we discussed the potential of selling next year. I have not seen him since.

Talk about the ultimate fool! For a lousy $20, he destroyed a long-term relationship, and forfeited a 5% commission when we sell. It is not the $20, but the fact his word means nothing. If I cannot trust the man to do what he says, I will not use him in future. How stupid can anyone be to destroy a relationship and lose out on a commission over $20! No wonder RE agents have a bad name!

#117 joblo on 10.28.14 at 10:33 am

#73 AK on 10.27.14 at 9:36 pm
Lower Oil in the forecast. Including, Gartman … LOL..

And end of US Petro$ status?
Total to build in Russia LNG plant w/o $US.
Something change?
CEO mishap.
Russia or West flex?

#118 45north on 10.28.14 at 10:43 am

lurker : The agent worked for the guy on the first house, he helped put together an offer, present it, do multiple sign backs etc.

For this he made 0$

lee : I think we can’t downplay the agent’s role in making the purchase easier.

my feelings too.

on the recent shootings at Parliament Hill and St Jean sur Richelieu: after 911, the FBI added resources in its fight against terrorism at the expense of investigations into mortgage fraud. I do think that its worth talking about the shootings in Canada but I think the police need to keep doing what they’re doing.

#119 Londoner on 10.28.14 at 10:57 am

Here’s the real problem:

“…I am so confused and do not have any expert to get advice from. I came across your blog and hope you can help me.”

As if it wasn’t bad enough that he got taken advantage of by one person he comes here begging for (free!) advice from another. Don’t have any experts? How about hiring a lawyer? Or better yet, why not do some basic research and learn for yourself? No, no, it’s much easier to ask someone else to tell you what to do, isn’t it?

Sadly, instead of learning anything from this experience, he’s more likely to repeat it in the future.

#120 lawboy on 10.28.14 at 11:03 am

#99 A Yank in BC

I don’t see how the contract could be legally binding, if indeed Karan was coerced into signing it before it was even filled-in.
…..
Well the contract wouldn’t be enforceable if Kiran was indeed “coerced” into signing it “before it was even filled in”. But it will cost Kiran at least double his existing 9k bill to the realtor in legal fees to even begin to attempt to establish those facts. Guess what. The realtor’s evidence will be that there was no coercion and that K’s claim the form was “not filled in” was poppycock. And he’ll also demonstrate that he did work for K, so equities won’t fall to K’s side.

So fighting this bill isn’t likely to make sense financially, even if K had the money to pay a lawyer, and I’m guessing he doesn’t.

#121 Daisy Mae on 10.28.14 at 11:18 am

#48 Millenial: “When I bought I told him, and he even congratulated me.”

I never understand stuff like this. You’re making a major financial transaction and you’re just casually broadcasting it to a stranger? Why tell him if he had nothing to do with it?

******************

All MLS sales posted and available for all RE agents to see. You think this agent wasn’t scrutinizing those lists?

#122 Cici on 10.28.14 at 11:35 am

Majority of Canadians Can’t Afford to Retire (according to Conference Board of Canada)

http://www.cbc.ca/news/business/retirement-saving-a-big-worry-among-survey-respondents-1.2814538

#123 Andy on 10.28.14 at 11:46 am

Sweden cuts interest rates to zero

http://www.ft.com/cms/s/0/3033b236-5e7e-11e4-a807-00144feabdc0.html#axzz3HSEBZ0WY

The second last paragraph reads
“High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email [email protected] to buy additional rights. http://www.ft.com/cms/s/0/3033b236-5e7e-11e4-a807-00144feabdc0.html#ixzz3HSEu3yZv

The Riksbank continued to fret about the impact of low interest rates on a strong housing market although it has conceded that other regulators should fight against household indebtedness using so-called macroprudential measures such as stricter borrowing limits. The ratio of household debt to income stands at 174 per cent ”

sometimes these kind of news make me afraid a bit…seems like it is becoming a worldwide trend that everything and anything should be done to save housing market. Pump and keep the house prices higher and make people take mortgage for equal to 1/3 of their life span if not half and keep paying to these banks.

Sometimes back I was reading about India. Indians are considered as savers and they save a lot. Their finance minister is advocating an interest rate cut.. He says by doing this people will be able to afford houses more easily. He says that he wants to make it such a way that the EMI ( they call it that way there for monthly mortgage payment) is less than the rent they are paying.

When the majority of the world starts trusting something , they make it happen. Seems like houses will be kept the most desired commodity in the world and people will pay for it their whole lives….

#124 Rational Optimist on 10.28.14 at 11:47 am

This fellow should have at least written in ‘123 Kasestrasse’ or whatever it was himself. But it’s no more difficult not to sign.

Others have suggested extracting $9,000 of satisfaction from Karambir Sira in the form of some very bad publicity. Call the CBC, the local paper, a few reporters at the Star. Probably best not to read the comments on any stories…but the buyer can rest assured that Karambir Sira will be having a few bad days.

The other possibility is that Karambir Sira is so small-time and $9,000 is such a big commission for him, that he wouldn’t value his entire reputation as high as that.

By the way, if the buyer lets Karambir Sira take him to small claims court, I don’t think it’s a given that Karambir Sira will win.

#125 NEVER GIVE UP on 10.28.14 at 11:53 am

#15 Retired Boomer – WI on 10.27.14 at 6:53 pm

I disagree with your take.

This is a something for nothing contract.
There will always be non intellectual people who dislike reading fine print and will sign things just to get the paperwork out of the way and get to the candy.

There are provisions in the law that state there must be a benefit to both parties in contracts or they are null and void.

In this case there was no benefit to the buyer so it could be argued in court that the contract was a one sided scam.

We need protections for consumers who will always be duped by the vultures in the shadows who stay awake all night thinking up ways to get something for nothing.

#126 Oceanside on 10.28.14 at 11:56 am

The concept of a BRA is OK but seems to be abused by some realtors. People I know in the business here on Vancouver Island said they would never use or ask anyone to sign one. Other sides of the equation are the buyers who have a realtor looking for and driving them around for sometimes over a year investing 100’s of hours and expense only to have them call out of the blue and say “Thanks for all your work, we saw a home we liked and called the listing realtor and bought from him”

We had a neighbour who has been driven around looking for places for nearly a year…Always on weekends and evenings who thought realtors were paid by the hour by their companies…….

#127 LP on 10.28.14 at 11:59 am

#111 };-) aka Devil’s Advocate on 10.28.14 at 9:37 am

I guess I can agree with much of what you say, given the number of hours some agents put in on behalf of buyer clients. However, let me recount for you our experience 18 months ago.

There was an agent living in the same condo townhouse complex as we did and she was the person we called for advice about selling “about 6 months” in the future. She spent an hour with us, gave us the usual info about current prices and toured our home. We assured her that, if we decided to list, we would call her.

Fast forward about 6 weeks when the agent called all excited to say that a co-worker was interested in seeing our home with a view to buying it. She suggested a selling price over the phone and we agreed that it was reasonable. Two days later the couple went through our house (with another agent from the same office) and offered to purchase the next day at the stated price. We accepted conditionally since we hadn’t yet found another place.

The agent knew our criteria for another home. However, I found the potential house on the internet and phoned her to set-up an appointment. We subsequently made an offer which was accepted.

So, in summary: our sale was signed unconditionally as was the purchase (except for inspection – all good there). Then “our” agent turns up at the house and demands that we sign a BRA after the fact. We declined at first, citing all the reasons Garth had outlined in a previous post, but she practically begged in tears saying she was being pressured by her broker. We caved and signed the darn thing!

The kicker? We found out that the agent didn’t present our offer to purchase the house we bought. Instead, she had faxed the offer to the listing agent who presented it to his vendor supposedly on our behalf.

We were stupid, of course! Never again will we use that agent nor would we recommend her to friends or family. And in future, we’ll take Garth’s advice and skip the BRA entirely.

#128 NEVER GIVE UP on 10.28.14 at 12:07 pm

Contracts like this are only for the benefit of the Agent. There is no upside to the buyer.

If I went to get a quote from a carpet store and they made me sign a BRA that protected that store from loss of profit from any competitor in the city for the next 30 days. How is that any different from a RE BRA?

#129 NEVER GIVE UP on 10.28.14 at 12:11 pm

#120 45north on 10.28.14 at 10:43 am lee : I think we can’t downplay the agent’s role in making the purchase easier.
————————————————–
Good point, but that is why RE commissions are so high. They don’t get every deal.
Same as in any business. Customers shop around and should be free to do so.
Retailers cannot charge for the time spent with tire kickers.

#130 xdisciple on 10.28.14 at 12:11 pm

DELETED

#131 Holy Crap Wheres The Tylenol on 10.28.14 at 12:25 pm

#106 Polozified on 10.28.14 at 8:48 am
Choosing a Brampton based used house salesman to purchase in Kitchener was mistake #1.
Choosing something called “Sales Max Realty” was mistake #2 (or #1a, if you prefer).
_____________________________________________

Mistake number 1 was using an Agent!

#132 xdisciple on 10.28.14 at 12:27 pm

DELETED

#133 xdisciple on 10.28.14 at 12:29 pm

“Those who are able to see beyond the shadows and lies of their culture will never be understood, let alone believed by the masses” – Plato, Republic

#134 Holy Crap Wheres The Tylenol on 10.28.14 at 12:29 pm

#119 joblo on 10.28.14 at 10:33 am

#73 AK on 10.27.14 at 9:36 pm
Lower Oil in the forecast. Including, Gartman … LOL..

And end of US Petro$ status?
Total to build in Russia LNG plant w/o $US.
Something change?
CEO mishap.
Russia or West flex?
__________________________________________

Forcasting $70 with a return to $100+ by 2015 fourth quarter. Who the hell knows what to expect! Did anyone focast the US becoming more self sufficient and exporting oil a few years ago? The only truth I know for sure is that oil is finite! Time my freinds, just takes time. We will all be back at the same place in a few years. Oh fusion, fusion wherefore art thou!

#135 Kevin on 10.28.14 at 12:36 pm

@Paul (#107):

How did a $11,000 commission turn into a $35,000 price increase

Because the $35,000 in upgrades the builder was offering me wouldn’t have actually cost them $35,000. Like all businesses, they add a margin of profit to their actual costs.

#136 David McKenna on 10.28.14 at 12:41 pm

Hi Garth, it’s still reasonable to sign one, if the agent requires you to, provided you:

Fill in the Property Type (use) as “single family home at 123 Main Street Kitchener Ontario”

And set the expiration date as a reasonable time period.

This protects you, but still ensures the agent gets paid on the offer you put in on a place.

Thoughts?

Agreed – the more specificity the better, if you have to sign. — Garth

#137 bdy sktrn on 10.28.14 at 1:18 pm

when we bought an old beater house i had no idea of what a RE agent even did. none. was way too busy living it up in my mid20’s

it was before internet, 95, but the papers had up to date weekly info . we saw whatever we wanted at open houses on the weekends . drove ourselves around. had no idea someone else was supposed to drive. renting beachfront in van and in no hurry to leave.

after a couple months of just looking we get a call from a friend of a relative, he an agent , and he “wants to show us some places”

i thought it a bit odd as i knew nothing of the system, but we went out on one occasion for an hour to see 2 false creek condos with him , we never spoke beforehand, the relative informed him what we may be interested in, i guess .

i did not particularly want to go with this person, but did go, mainly to humor the relative. i drove there. we met, introduced, he then unlocked a couple doors, then mainly got in the way as we checked out what all were unsuitable units.

no papers or discussion of any type. we went home and completely forgot about him , and continued to casually window shop on our own. a few months later we see a sign on an old house in a nearby , but very different, hood and buy it same day from the guy (agent)selling it. seemed straightforward to me at the time.

turns out the ”our” agent finds out and is quite pissed off about it. he chews out the relative (who was a good customer of his). he never called me. for many years i never quite understood what that was all about. now i know it’s about womens underthings.

even more naive of me at the time was that a good friend had a valid re licence and that i could have split his commish 80/20 in my favor for putting his name on the paper . oh well , the guy selling the place made out, we fell for the ‘there is a second offer’scam, i think. paid almost full ask.

if i overpaid by 5k it was worth it not having some creepy person tag along every time i wanted to see a place.

#138 Francis on 10.28.14 at 1:26 pm

Thank you for mentioning the scummy agent’s name. We now have a new addition to put on our blacklist.

#139 miketheengineer on 10.28.14 at 1:38 pm

Garth et al:

Another nail in the old Stelco (now US Steel) coffin.

http://www.cbc.ca/news/canada/hamilton/news/u-s-steel-idles-hamilton-coke-making-1.2815707

If you want to read what has happened to the company….check out the latest news letter from Local 1005…freaking unbelievable, read it if you want to learn what is / has really gone on there.

Here is the link:

http://www.uswa1005.ca/Information_Update_32_October_23_2014.pdf

P.S. My dad (RIP) is standing next to the tall bald guy holding the 1005 sign . I know that he is flipping over in his grave right now.

#140 Andy on 10.28.14 at 1:44 pm

More to chew
Renewed deflation worries
http://www.bbc.com/news/business-29625739

#141 protea on 10.28.14 at 1:51 pm

No wonder I detest most realtors with the exception of a few. I have purchased several properties over a 45 yr period and would honestly say that around 70% of the dealings left a bad taste in my mouth.

There has too be a better way to buy and sell a property in having to deal with the mafia/cartel MLS group that we presently are saddeled with. Even the Federal Competition Bereau could not get anywhere with the Cartel a few years ago. They are a very powerful group who always seem to get their own way.

#142 devore on 10.28.14 at 2:03 pm

#85 lurker

This agent definitely misrepresented the contract, but I don’t think agents should work for free.

The deal didn’t work out, no work was completed. That’s how sales works. Sometimes you bust your ass, and end up getting nothing.

#143 Retired Boomer - WI on 10.28.14 at 2:22 pm

#127 NEVER GIVE UP

You have every right to disagree.

I am NOT a Lawyer, therefore I do NOT dispense legal advice.

I expressed MY personal opinion, and MY personal opinion of the likely outcome.

Yes, he could litigate, negotiate, abdicate, or fabricate.

None of the options shane my opinion.

Opinions, are much like rear-ends. We all got one!

#144 devore on 10.28.14 at 2:30 pm

#113 };-) aka Devil’s Advocate

Oh and one more thing; you don’t need to use a REALTOR® to buy a property listed by a REALTOR®. You can enter into what is called a “Customer” Relationship in which case you have no REALTOR® and the Listing REALTOR® owes you no fiduciary duty. They still have to disclose material facts etc to you but they owe you little more duty of care than a car or tv salesman would.

The selling agent has no more or fewer responsibilities towards a buyer regardless of whether the buyer is represented by an agent or not.

Oh, I see now you are probably referring to the seller’s agent representing both the buyer and seller, which is a definition conflict of interest. The agent cannot tell the buyer anything he learned from, or might have learned from, or that might compromise the seller, because that would go against his fiduciary duty to the seller, which is first and foremost. One cannot serve two masters.

No buyer should ever enter into such an agreement; even if the agent offers to do it for just the seller’s half of the commission (hahahaha), the buyer will be lulled into a false sense of security, as in that case he is actually represented by NO ONE.

#145 Mark on 10.28.14 at 2:53 pm

“All MLS sales posted and available for all RE agents to see. You think this agent wasn’t scrutinizing those lists?”

A good lawyer would have advised that a numbered company buy the house, and then, as soon as the BRA expired, sell the house to the ultimate owner for ownership as a principle residence. Confidentiality clauses as to price could have also been inserted. The big failure here is that of receiving proper legal advice.

#146 Daisy Mae on 10.28.14 at 2:58 pm

89 The Real Deal: “Technically, hasn’t Karan signed some document with no details filled in and the agent has altered the contract.”

***************

And that, of course, was Karans’ first mistake…

#147 Daisy Mae on 10.28.14 at 3:01 pm

#89 The Real Deal: “…if the agent misled the buyer, can’t the buyer argue he signed an incomplete document (stating nothing) and that the agent revised the contract after the fact.”

****************

Nope.

#148 Daisy Mae on 10.28.14 at 3:03 pm

“Ignorance is no excuse”

#149 bruce lee on 10.28.14 at 3:33 pm

“educated” seems too much of a word, why not use “informed” ?

#150 The American on 10.28.14 at 3:36 pm

Sounds like Karen should just shake it off, ’cause a player’s gonna play, play, play, play and a hater’s gonna hate, hate, hate hate. There’s $9,000 of perfectly good Canadian money going right down the drain.

https://www.youtube.com/watch?v=nfWlot6h_JM

#151 chapter 9 on 10.28.14 at 3:38 pm

One just has to look south of the border to see the potential for future oil development. Utah is sitting on fifty per cent of Americas oil sands throw in parts of Wyoming and Colorado “presto” about 3 trillion barrels of recoverable oil. Keep your eyes open “Alberta”

#152 Helen on 10.28.14 at 4:33 pm

Don’t pay and tell the agent to go to hell. This is a stunt and the agency made it clear he doesn’t want it made public therefore they’ll drop it. He’s a bully, don’t cave.

#153 Westcdn on 10.28.14 at 4:50 pm

I have my own realtor story about the house I am currently living. Many years ago, I initially saw this house with our realtor. I liked the house from the outside so our realtor contacted the listing realtor and we did a walk through. I was interested. I made a couple of offers which were turned downed. A few days later, I saw the house was being offered by For Sale by Owner at a lower price than the listing agent wanted.
So I said to my realtor – thanks for the help but I think I will just buy directly from the owner. Well the SHTF. The listing agent insisted he would sue the owner for a commission. I guess from the gist of his rants, the listing realtor had told the FSBO that he could sell the property more than the FSBO would realize own his own. He claimed “door entry” ownership for a right to commission. Of course, my own realtor was upset. Being naive, I got angry and told the realtors to do unspeakable things.
My wife, being the diplomat, worked out a deal with the realtors to reduce the commission expense. As my wife was happy with the deal and I liked the house, we purchased for more than could have. The lesson I learned – never expect to stand between a commission and the dinner table without getting bruises. The more I can do own my own, all the better.

#154 I'm stupid on 10.28.14 at 4:52 pm

When I was younger, I got screwed by a traffic ticket agent. I knew the guy for years. I got a speeding ticket and he was going to represent me and in exchange I was going to give him a weekend at my cottage. It was a fair deal. He told me to sign a contract stating he was going to represent me and the fee he charges. He told me that he needed the contract signed or he couldn’t represent me.

He used my cottage and had a great time. That bastard then charged me for his services and sent collections after me when I refused to pay him.

The moral of the story is; don’t trust anyone because even your mother can screw you over!

You hired your mom? — Garth

#155 TheLaughingCon on 10.28.14 at 5:00 pm

Meanwhile a few people are paying attention to this chart:

http://goo.gl/uCFcR2

Kenchie “know it all” pay attention!

#156 TheLaughingCon on 10.28.14 at 5:08 pm

Garth, what is you opinion on Torstar (TS-B)
Was down 5% but closed only 4% down for a generally “green day” for everything else while waiting for QE4 hints tomorrow.

Not much value nowadays since RF/DF are gone.

Short away…

#157 Harbour on 10.28.14 at 5:10 pm

Sweden cuts interest rates to zero

#158 Paul on 10.28.14 at 5:25 pm

#154 Helen on 10.28.14 at 4:33 pm

Don’t pay and tell the agent to go to hell. This is a stunt and the agency made it clear he doesn’t want it made public therefore they’ll drop it. He’s a bully, don’t cave
————————————————————-
Make a offer of say 2k it will most likely go away,It’s cheaper and less grief. Even thou he should not have been blind sided if the is the case

#159 Paul on 10.28.14 at 5:34 pm

155 Westcdn on 10.28.14 at 4:50 pm
————————————————————-I googled why do agents need a BRA and your photo came up

#160 CalgaryRocks on 10.28.14 at 6:06 pm

#153 chapter 9 on 10.28.14 at 3:38 pm
One just has to look south of the border to see the potential for future oil development. Utah is sitting on fifty per cent of Americas oil sands throw in parts of Wyoming and Colorado “presto” about 3 trillion barrels of recoverable oil. Keep your eyes open “Alberta”

Americans stand together. Canadians can’t wait for the others to fall down.

Alberta is a province in Canada. If it stumbles, the whole country stumbles.

That’s why I now live in the US. Better climate, definitely better money. (And getting better by the day)

Funny how the US can get all of their development done while Canadians sit there fighting among themselves.

#161 Entrepreneur on 10.28.14 at 6:46 pm

Sounds like some real estate agents are abusing the BRA. It should be outlawed or at least take the money-side of it away. BRA should be only for the structure of the building only.

To make papers legal should there be a witness with signature. In other words, a signature without a witness is not as strong & more he/she said. Get rid of BRA or improve it to get of these ruthless real estate agents.

Won’t sign another one after hearing these stories and will pass this on to others.

#162 crowdedelevatorfartz on 10.28.14 at 7:00 pm

Godth

You read #153 right? Potential oil supply.
“the potential for future oil development. Utah is sitting on fifty per cent of Americas oil sands throw in parts of Wyoming and Colorado “presto” about 3 trillion barrels of recoverable oil….”

While 3 trillion barrels might be a tad high. The potential for self sufficientcy is there.
Adios Muslim theocratic dictatorships….hello Levant.

#163 westcdn on 10.28.14 at 7:16 pm

#161 Paul
Life lessons can be painful, learn and move ahead. I am not shy about posting about my mistakes if it helps someone.

#164 Mark on 10.28.14 at 7:36 pm

“Alberta is a province in Canada. If it stumbles, the whole country stumbles.”

Not really.

Funny how the US can get all of their development done while Canadians sit there fighting among themselves.

What do you call Keystone XL these days? A bunch of American in-fighting which is actually damaging their ability to use their own oil resources. And still no universal adoption of the metric system, even though industry has been kicking and screaming for decades.

#165 Ronaldo on 10.28.14 at 10:08 pm

#74 Peter Tarshis – Toronto Realtor on 10.27.14 at 9:44 pm

Business a bit slow is it Peter?

#166 Happy Renting on 10.29.14 at 1:02 am

#165 westcdn on 10.28.14 at 7:16 pm

#161 Paul
Life lessons can be painful, learn and move ahead. I am not shy about posting about my mistakes if it helps someone.

Bravo. We all make mistakes, it’s a service if you let others learn from yours.

#167 Friday Link Roundup: No Deodorant Edition - Financial Uproar on 10.31.14 at 8:00 am

[…] costing you thousands. And you’ll need that money to put a sex swing in the basement. Anyhoo, Garth Turner has the deets. About the BBA. Not the sex […]