But as an Edmonton couple discovered when they sold their cottage and saw it flipped twice in four months, it’s not as simple as that.
Marlin and Connie Trynchy bought a lakefront cottage in Lac St. Anne county west of Edmonton in 2001 for $59,000. Five years later they decided to sell and approached real estate agent Tammy Gabriel. Connie Trynchy later testified in a lawsuit that Gabriel told them the home was worth just under $100,000.
On May 17, 2006, the Trynchys listed the cottage for $112,000 and that day, Gabriel called to say she had received an offer for $108,000. The offer was from Kerrie Meunier, a real estate agent who worked in the same office as Gabriel. The Trynchys signed the offer back at $110,000, which was accepted.
The sale agreement noted that Meunier was also a real estate agent in the same office and had the following additional clause:
“It is understood by the seller that the buyer has a right to sell at a profit or loss at a later date.”
Trynchy later told a court she saw the clause and did not care what the buyer did with the cottage. They never met the buyer before the deal closed in June but did know that she was an agent in the same office.
In mid-July Trynchy saw an ad for their old cottage with a listing price of $170,000. The cottage was sold soon afterwards for $165,000. The new owner did some renovations and sold it that October for $225,000.
Meunier’s profit on the sale of the cottage and acting as agent came to $67,400, a court later heard.
The Trynchys sued their agent Tammy Gabriel, the other realtor Kerrie Meunier and their brokerage for this profit. They claimed they were misled about the real value of their cottage.
Gabriel later told a court she always inspects the property and provides information on comparable listings when she is hired. She did that for the Trynchys. She said Meunier contacted her when she saw the listing posted in their office.
Meunier testified the cottage was not well looked after. The roof needed repair and the deck was rotting. She intended it to be an investment, cleaned it up after closing and then put it back on the market. She was surprised it later sold for such a large profit.
As part of the evidence for the trial, an independent appraisal was done to determine the value of the cottage at the time it was sold. It showed that based on comparable sales, the cottage was worth between $120,000 and $125,000 in May, 2006 and as much as $147,000 by the end of that July.
In Nov. 2012, Alberta Judge J.J. Gill decided the original $112,000 listing price was close enough to the appraisal prepared for the trial to be reasonable. He also noted the sellers were not pressured to accept the offer and speculators were active that year leading to a hot market.
So, the real estate agents won and the sellers lost.
In Ontario, when a real estate agent buys or sells a property, they have an obligation to disclose that they are an agent to anyone buying from or selling to them. They must also disclose anything material that they know about the property, including any negotiations that they are having to re-sell it.
When your agent is buying your property, consider having a separate appraisal done to make sure you are getting a fair price, and make any contract conditional upon review and approval by your lawyer, so you can talk it over before making any final commitment.
Original Article
Source: thestar.com
Author: Mark Weisleder
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