Double Dipping is what you get when real estate brokers are representing both the seller and buyer and collecting 10% of the transaction instead of the usual 5%.

In many parts of Canada it is illegal, because it places the broker in a situation where they are going to favour the seller and hide anything that is wrong with the property to the buyer.

So for example…

A property on a flood plain.

A house with a leaky roof.

A house with a history of mold problems.

A property that has legal issues regarding the sidewalk, back yard or lane way.

They aren’t going to tell you these things because it will hurt the sale value of the house, and they want that 10% commission and a higher price.

It is a bit like going to an used car dealership and you don’t take a friend or relative with you who is experienced at buying used cars. Thus you wouldn’t know that there is something is wrong with the car because the used car salesman certainly isn’t going to tell you what is wrong with the car.

So if the car, or house, is a lemon then the double dipping real estate broker isn’t going to tell you if there’s something wrong with the house at all. Their preference is that you don’t even ask questions. Just look at the property, and if you don’t notice that the house has a leaky roof and mold problems, well, then it isn’t their fault. Buyer beware and all that.

But a normal ethical broker would ask those questions. They have a fiduciary duty to do so.

In Vancouver and other parts of Canada is it illegal for real estate brokers to be double dipping on the commission rate.

But in Toronto and Ontario it is currently legal to double dip.

Very unethical, but when you’re selling a $1.6 million home and you get 10% ($160,000) then there is a financial incentive for the real estate broker to hide any faults with the property, to lie if necessary, and to do whatever they can to get the sale – even if it means encouraging a bidding war between rival buyers.

“I gotta tell you. There’s other people interested in the property. You might have to bid more.”

And so forth.

A word here, a lie there. They can inflate the price by encouraging higher bids by the buyers. This is great for the seller, because the price can become inflated, but for the buyer they’re getting ripped off.

Some real estate brokers will openly deny that it is unethical. They’ll argue “Well, it isn’t illegal.”

Or “I am just representing the interests of my clients (just the seller, but not the buyer).”

Or some other excuse or false logic. Whatever it takes to assuage their guilty conscience and the fact that they’re getting paid more to lie.

Imagine for example if you that same situation for a divorce lawyer and they are representing both spouses in the divorce. Is that going to be fair? Nope. They’re going to be biased towards whomever is paying them more.

There’s other issues too, legally and also economically, for why the practice is normally illegal. But suffice to say double dipping on the commission really should be illegal in Toronto and the rest of Ontario.

So how do we make it illegal?

Call your local MPP and explain to them why this practice should be illegal. That’s how we make it illegal. But enough people need to complain that Ontario’s MPPs take the matter seriously.

And you should always insist upon having your own real estate broker and never use one who is double dipping. We need to boycott the practice of double dipping to send a message that this kind of unethical behaviour really should be illegal.

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