想挣快钱没那么容易！卑诗将禁止摩货炒楼

I can't help adding my bit on this subject. Unfortunately as my Chinese is only so-so, I'm obliged to pen this in English instead. Otherwise its going to take me too long to finish.

I'm a realtor myself, but I'm not one of those "super star realtors" doing a 100 or 200 deals a year. If lucky, I do only about 2 or 3 deals. I have been thinking about how this so-called "shadow flipping" done by some realtors is being effected. I came to the conclusion that the process must be something like the scenario I paiant below:

Seller A has a property for sale. He calls up a realtor to give him an assessment/evaluation on the value of his property. As most Sellers/Buyers, in particular the Chinese, who know little or no English at all, would invariably accept whatever the realtor tells them. I would guess of a situation that Seller A has bought the property a few years ago. Compared to what the present market value is, it would have appreciated quite a lot in value. Now, the question is, what sold listings the realtor prints out for use as a basis of his evaluation. Unless the sold listings in the area around Seller A's property are very very few, in which case he has no choice but to use these few to perform his evaluation, I will assume here that he has a bunch to select from for comparison(which is not unrealistic over the last couple of years). Properties can be near/close to the target property for evaluation comparison , but for various reasons( water courses/creeks/power lines running through the property; mature trees which are not allowed to be cut; age/maintenance of the property; being sited adjacent to educational institutions requiring deep frontage set back; fronting on to or backing on to high traffic roads or highway; property lot sitting on a steep gradient, etc, etc. all these have serious impact on the value. 

Therefore if the property has been compared to properties with "really comparable features - comparing apple with apple" , then the price would be reflective of it's proper market value - much higher. And if the Seller then is happy with those comparisons and agree to a value to be listed at, then it will be a classic case of a market value. If then subsequently sold at whatever negotiated price, but on the basis of this initial listed price, then it is a price of "A willing buyer and willing seller - 你情我愿“。No argument! 

However, as in my example here, I am guessing that the realtor who has the intention to do a "shadow flipping of the property",  knowing how fast the market has moved, and is still very "hot", he may only select those listings, although recently sold, but of a lower sold price(due to some or all of the negative features mentioned above), and uses these listings for his presentation to the Seller and such an evaluation is accepted by the prospective "ignorant Seller"(as in the English saying "having the wool pulled over his eyes"), and is then agreed to to be listed at that "fudged lower market price", this is where the agent sees the big differential to the actual market value and would dare to take the risk to buy direct from the Seller by giving him a price at or a bit above the evaluation price(which he knows the Seller is very happy with), with an assignment clause. He then quickly "unloads" it at the actual market value, or probably much higher, to another buyer.

If the above scenario I painted is correct, then we have to ask how such "sleight of hand, or dishonest trick, or taking advantage of ignorant clients" can be avoided/stopped.

1. I feel there is no need for this over reaction on the part of the politicians. In an open market, it s up to the buyers and sellers to decide finally how they wish to structure the conditions in their agreement. For an assignment clause to be included in an agreement is no big deal. I as a buyer, amy prior to closing, may have thoughts of transferring to smeone in the family/friend, or maybe due to various reasons(financial), I may be obliged to sell it, etc etc.

Or, as in the case of condo presales,  in a fast rising/falling market, I may not wish to wait 2 or 3 years until completion, and would be quite happy to make some gain/loss and move on to something else.

While we are seeing/hearing such a lot of hooha about "shadow flipping", and some "dishonest agents" are making money at the expense of their ignorant clients, bear in mind that it only happens now in a fast rising market environment. Should the market suddenly drops precipitously, then that agent will suffer a loss, although I think this will not likely happen as the fluctuation in real estate is very different from the stock market. The suggestion that the agent performing a "shadow flipping" paying to the seller the gain made by him is unrealistic. What if he made a loss? Is the Seller going to compensate him?

An open market creates all kinds of ways and means to make money, honest and not so dishonest, fair and not so fair ways. On this issue of "Shadow flipping" I have the following suggestion:

1. The Real Estate Board should henceforth enforce all licenced realtors in the evaluation of the property for their prospective client:

A. A mandatory requirement for a CMA to be included in the Contract of Purchase and Sale WITH at least 10 of the MOST RECENT SOLDS,  and at least 10 of the MOST RECENT ACTIVE LISTINGS (like a PDS )

B. A Personal Statement by the realtor confirming that he has personally fully explained to the Seller of the methodology  and rationale of how he has arrived at the suggested price to be listed. To ensure with 100% certainty that the seller understood the agent's presentation/ explanations, Such a statement should also be translated into the Seller's language.  From my experience,  because of the the sellers' and buyers'

1. ignorance of the Englsih language

2. The whole lot of "mumbo jumbo" in the Contract of Purchase and Sale(CPS)

the Sellers and Buyers are literally just instructed to 'initial' / 'sign' in the areas marked with an "X", trusting the agent 1000%!(Yes I do mean 1000%)

It is good for the agent to be exonerated from any faults by the mere fact that the CPS has a statement cautioning that  1. the agent is not a lawyer, etc etc 2. that the seller/buyer has the responsibility to seek the advice of a lawyer /accountant /expert, but we all know in reality, this virtually cannot happen, for all kinds of practical reasons.

For the kind of multi million dollar products we agents are dealing with especially in the Vancouver real estate market, the requirements as suggested above is really minimal to service them in selling or helping them to buy a very high price product.

Just for a bit of info to the readers here : I have managed several operations in China selling very high volume but very low price products. My clients screen every clause with a "magnifying glass". To see that real estate of multi million dollar values and many a time seeing that they are being done by semi-literate agents, and also many a time seeing that such high priced products are being sold like cookies by some "super stars", enforcing the above suggested requirement is not too much to ask of every agent.

And let's assume that compared to what the Seller bought at, he will still achieve an appreciable gain. 

It is only if the realtor NOT presenting to the Seller the really comparable sold properties for comparison, and only selected those with "negative features" and thus sold at lower prices,