Multiple Offers: Guess Who Won?

RECO Discipline

Yes, the Listing agent! You are absolutely right. How did you ever guess that?

The Listing agent ended up having a Buyer who was interested in the property. There were 4 Buyers who submitted offers.

Here’s her version:

“At the time of taking the listing I discussed verbally with the seller very slightly about commission deduction and never thought I may have a buyer. At the time of entertaining the offer we all forget about commission reduction until after the facts.” [SIC]

So, what happened? She reduced her commission from 3.5% to 1% payable by the Seller. Nobody else knew this!

That meant that her Buyer’s client’s offer, even though it was not the highest, was more money financially to the Seller on a “net net” basis. How great is that! So, she won.


Date: 10 June 2022

Findings: violation of Sections 2(1), 3, 25(1), 27(1) and 38 Code of Ethics

Penalty: $11,500.00

Time to pay: 10 January 2023

The agent:

  • did not inform all buyers and/or their representatives that the total commission payable by the seller was being reduced from 3.5% to 1% if her brokerage represented both the buyer and seller of the Property, contrary to sections 2(1) with respect to section 25(1) and sections 3 and 38 of the Code of Ethics.
  • failed to reduce the commission reduction agreement to writing, submit to the Seller for signature, contrary to section 2 (1) in respect of section 27(1) of the Code.

Relevant Code Provisions


2. (1) A broker or salesperson shall not do or omit to do anything that causes the brokerage that employs the broker or salesperson to contravene this Regulation.

Fairness, honesty, etc.

3. A registrant shall treat every person the registrant deals with in the course of a trade in real estate fairly, honestly and with integrity.

Agreements relating to commission

 25. (1) If a brokerage has a seller as a client and an agreement between the brokerage and the seller contains terms that relate to a commission or other remuneration and that may affect whether an offer to buy is accepted, the brokerage shall disclose the existence of and the details of those terms to any person who makes a written offer to buy, at the earliest practicable opportunity and before any offer is accepted.

Written and legible agreements

27. (1) A registrant who represents a client in respect of a trade in real estate shall use the registrant’s best efforts to ensure that, (a) any agreement that deals with the conveyance of an interest in real estate is in writing; and

(b) any written agreement that deals with the conveyance of an interest in real estate is legible.

Error, misrepresentation, fraud, etc.

38. A registrant shall use the registrant’s best efforts to prevent error, misrepresentation, fraud or any unethical practice in respect of a trade in real estate.


Of course I can win at this bidding war against the other three. I have the inside track. I will just get my Buyer to raise their Offer just enough to win. Oh, you mean that’s not going to work? OK, I will reduce my own commission just enough to take this Offer over the top.

Why tell anyone! They might just increase their own Offers. Enough about my Seller, they are already getting enough money. Who cares! Actually, I care about how much money I am making on this deal, and after all, I threw some money into the pot.

If I didn’t do this “in secret” it might not have worked.

And, what’s the point of imposing two 90 minute Courses on this agent? They already knew the rules, because they were very crafty avoiding them.

Should the Seller sue the agent for a return of the commission. This was a clear breach of fiduciary duties.

Brian Madigan LL.B., Broker

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