New Coast Realty, a Richmond-based real estate firm, has had a number of conditions placed on it by the Real Estate Council of BC, after a Globe and Mail investigation indicated its clients’ best interests were not being served.
“Licence conditions have been issued by the Real Estate Council of BC (RECBC)for New Coast Realty to ensure the brokerage complies with the Real Estate Act and to establish appropriate oversight of the brokerage,” said RECBC in a statement, last Friday.
A three-month investigation by Globe reporter Kathy Tomlinson revealed some real estate agents have been engaging in a practice known as “shadow flipping,” whereby an agent resells a property for a higher price before the initial deal is closed.
The process gives agents extra commissions and effectively bilks money from the original homeowner.
It’s a legal loophole the provincial government promises will be soon closed.
After Friday’s announcement, the Globe released training session audio tapes of New Coast owner Ze Yu Wu, instructing New Coast sales agents to encourage homeowners to sell their properties for as low as possible.
“You must print out the lowest prices in the neighbourhood to show to the homeowner,” Wu is quoted in the Globe, via a translation service, as Wu is a Chinese national and doesn’t speak English.
The Globe’s investigation revealed New Coast takes larger cuts from agent commissions. It also revealed that New Coast had above average dealings, where the agent represented both the seller and the buyer.
On Tuesday, the Richmond News called New Coast’s general manager — listed on its website as an Amalia Liapis. She claimed she didn’t work for New Coast, despite having a company email address.
Ten minutes later, her contact details were wiped from the company’s contact page.
In a statement released to the media, New Coast said its “... agents and management work hard to serve the best interests of our clients and to respect our professional obligations while doing so. New Coast denies the allegations made by the Globe and Mail, which are based on excerpts of a recorded conversation taken out of context. New Coast is cooperating with the Real Estate Council in reviewing these matters and looks forward to answering the unfair accusations which have been made.”
Agents are supposed to act as fiduciaries for the seller. As such, RECBC has placed a number of conditions on New Coast to ensure best practices are followed. New Coast is said to be cooperating with the council.
New Coast must now appoint a new managing broker approved in advance by the council.
Only this manager can proceed with training sessions and supervise licensed agents. According to the Globe, the Real Easte Board of Greater Vancouver (REBGV) fined New Coast in 2016 for having unlicensed employees access MLS data.
New Coast will need to submit monthly reports to the council on any in-house transactions and quarterly audits will be conducted. The council will also track all offers received for a property listed by New Coast.
The council noted that there are a “significant” number of buyers and sellers with transactions in progress with New Coast who will have to remain with the firm as they have contractual obligations to fulfill.
The council has asked any sellers with concerns about transactions at New Coast to contact RECBC by email at [email protected] or by phone at 604-683-9664.
Despite a record-shattering 2015 for residential property values, there appears to be no slowing down of the real estate market in Metro Vancouver.
“March was the highest selling month the REBGV has ever recorded,” said Dan Morrison, president of REBGV.
Richmond’s benchmark price for a detached home is now $1.4 million, up 31 per cent since last year. The median selling price is now $1.66 million.
Homes on larger lots and along arterial roads sell for much more. The average townhouse now costs $632,000, while apartments are in the $404,000 range.
Only Vancouver and North Vancouver have higher property values than Richmond.
