Quebec realtors buying homes, selling at higher prices to make a quick profit

The number of disciplinary cases against Quebec realtors accused of “financially abusing” their clients is going up.

This comes amid claims that some real estate brokers are taking advantage of elderly or vulnerable Quebecers by buying their homes at a “cheaper” rate and then reselling them at a much higher price to make a quick profit.

“Since many reported cases involve vulnerable individual or elders, it constitutes outright financial exploitation,” said Jacinthe Roy, executive director of Réseau FADOQ, one of Canada’s largest senior organizations. “For many retirees, a property represents their primary savings aside from public retirement plans.”

According to the Organisme d’autoréglementation du courtage immobilier du Québec (OACIQ), the organization that oversees real estate brokers in Quebec, its disciplinary committee found that over the last few years, several realtors have taken advantage of their clients by buying their properties themselves.

“If a real estate broker is interested in buying a property that’s been offered to him by a potential client, he should refrain from signing a brokerage contract,” explains OACIQ spokesperson Joanne Beauvais. “When he signs a contract, he has to represent his client’s interests first and foremost.”

Overall, the OACIQ says the number of conflict of interest offences is up from 31.6 per cent in 2021 to 43.4 per cent in 2022.

Beauvais points out that double representation — a broker acting as the selling agent for a client and representing themselves as the homebuyer — has not been allowed in Quebec since 2022.

“Last November, a real estate broker bought the property from her two clients,” recounts Beauvais. “[She made] $500,000.”

Following a complaint, an investigation ensued, and the realtor was fined $150,000 for conflict of interest.

“This sanction was called upon being proportional to the profit shown on the property purchased from her customers,” said Beauvais. “If you make half a million profit, we went in, got our lawyers, and got the maximum fine.”

The Association québécoise des retraité(e)s des secteurs public et parapublic (AQRP) laments that financial abuse and “egregious exploitation” of the elderly can take many forms.

“It is unacceptable that some real estate agents exploit the vulnerability of elderly individuals for purely financial gain,” said AQRP President Paul-René Roy. “We consider these practices to be profoundly inhumane and contrary to professional ethics.”

The AQPR and Réseau FADOQ recommend that people always verify their broker’s licence on the OACIQ website, including checking their identity and looking out for any potential disciplinary actions.

“If you think that he wants to act fast, doesn’t put a sign in front of the property or doesn’t put your house on Centris, that can be a sign that maybe there’s something wrong,” said Roy.

The OACIQ notes that brokers have a moral obligation to prioritize their clients’ needs over their own.

“It is still the most important transaction of your life,” Beauvais points out. “Especially for an elderly couple, let’s say, who have seen their children grow in that home, it’s all emotional, and maybe they don’t have family around to help them. So, getting the one real match with a real estate broker is the best guarantee they can get.”