The recent announcement by B.C.’s Office of the Superintendent of Real Estate that it intends to ban the practice of dual agency in real estate transactions has sparked debate among realtors, including here in Kelowna.
Many in the industry, including the president of the Okanagan Mainline Real Estate Board, have come out against the proposed change.
But Mark Walker, a Kelowna real estate broker, says he supports the change.
And that position, he says, has put him at odds with the president of his own real estate board.
“I’ve been in dual agency situations before, and I think the proposed new rules that are set to be implemented are a benefit to consumers and realtors alike,” said Walker.
Dual agency refers to when the same realtor represents both the buyer and the seller in a single transaction.
“Dual agency has the potential to jeopardize the ability of the agent to do the best job for their client,” he said. “Think about it—how can you truly represent both the buyer and the seller in a transaction? How can you negotiate for them? You can’t. It’s a total conflict of interest and a recipe for trouble.”
Walker, who runs his own real estate brokerage—Walker Real Estate—compares the existing rule that allows dual agency to a lawyer representing both the defence and the prosecution.
“I’m sure the individual lawyer would have the skill to make very good arguments on both sides, but could you say that this type of setup would be in the best interest of the client?”
He said his firm has been taking steps to limit its exposure to dual agency for the last year.
According to Walker, the big reason so many realtors are opposed is money.
“Whether it’s admitted to or not, I feel most of the opposition comes from the potential loss of income,” said Walker.
“Some agents will argue it is up to the client to choose how they want to be represented, and if they allow for dual agency, then so be it. However, that’s a misleading point. If clients truly understood how dual agency works, they wouldn’t go for it. I have no doubt about that.”
While stressing there are many very good real estate agents and brokerages in the city, Walker said a realtor has a fiduciary duty to his or her clients, and dual agency undermines that duty.
“At the end of the day, to represent both sides of a single transaction to their best interests is completely impossible,” said Walker.
“The best you can do is become a facilitator rather than a negotiator, but you should be paid accordingly—in other words, less. It’s like hiring a mediator rather than a litigator. These proposed new changes are good for the industry and consumers. I have no doubt about that.”
The Office of the Superintendent of Real Estate and the Real Estate Council of B.C. governs the real estate industry in B.C. The new rule on dual agency is set to come into effect on Jan. 15.