Real estate red flags: how to spot shady realtor behaviour in a wicked-hot housing market

Picture this: you’re looking to buy a new home, you’ve fallen in love with what feels like your dream house after spending months looking for the right place for your family and setting a budget with your partner. So you put in an offer. The listing agent tells you that yours is the best one but then out of the blue they later say that another offer is the winning bid.

This is the exact troubling scenario that a client of Nikki Hessami, a Toronto-based realtor, recently experienced before coming to her. The client, a family, had begun to wonder if the listing agent presented their offer to the seller to begin with, or if they chose to set it aside in favour of an offer from a friend, family member or other client.

Complaints from homebuyers like these about shady realtors have become much more common as of late, having risen by 38% in just the last year, according to the Real Estate Council of Ontario (RECO).

Hot housing market ripe for dubious realtor behaviour

Toronto real estate has been on fire lately. April 2021 market figures from the Toronto Regional Real Estate Board show a significant increase in the number of properties sold over the past year during COVID-19 compared to previous years in Toronto alone.

“Because some realtors can stand to make a lot, if they just want to close the deal, get quick results and make quick money, there are many cases when there might be no honesty and no transparency,” says Hessami. “These are greedy people who are only thinking about their personal interest.”

Common victims of these types of agents are immigrants new to the country and local real estate market, who have a cultural and/or language barrier that can unfortunately make them “easier” targets.

A good agent will take the time to explain the details

Having come to Canada from Iran nearly a decade ago herself, Hessami says she knows first-hand what that experience can be like.

“Immigrants are especially taken advantage of,” she says. “Because sometimes they’re new to the rules and regulations, and agents might be neglectful of this or just don’t have the experience working with other cultures. Whether you’re an immigrant or not, a buyer or seller, you should always do your own research and not rely entirely on agents. You have to do your due diligence so you can actually understand every step of the process and then be able to sense red flags when they come.”

Red flags to watch out for when working with a realtor

What exactly are those red flags, though? Some might include:

  • Your real estate agent doesn’t answer your questions
  • Your real estate agent evades any issues you might have
  • Your real estate agent doesn’t give you an overall picture of the properties you’re considering — risks and all
  • Your real estate agent is quick to make a transaction and appears impatient
  • Your real estate agent isn’t being transparent with you

“A good agent will take the time to explain the details,” says Hessami. “They value the relationship between themselves and the buyer and seller. I see my role as making buyers aware of the risks that they might face like if they cannot have their financing in place, they might lose their deposit, or that if they don’t do an inspection, they might have some problems down the line. Some don’t bother with that, they just present the papers, have you sign and they vanish.”

Things you can do to protect yourself include:

  • Read every document, especially before you sign anything
  • Ask questions every step of the way
  • Ask for your agent’s references, and confirm the identity of those they might boast on their online profiles and websites
  • Send an email to the listing brokerage (or ask your agent to do it on your behalf) to make sure that your offer is registered. You can request official documentation through the Ontario Real Estate Association (OREA) that the sellers can sign to confirm they’ve received the offer
  • If working with an agent of the same cultural background is important to you, make it a priority in your search
  • Check out the OREA and RECO’s code of ethics

Get in touch with the manager of the brokerage you’re working with (by calling directly) or a real estate lawyer.

Industry changes needed to ensure ethical realtor behaviour
Toronto-based Century 21 Leading Edge broker Karen Law says there are many ways that the real estate industry could improve in order to ensure less unethical behaviour, largely through changes in regulatory boards.

“The standard of only having a high-school certificate to apply for a real estate licence is far too low as an entry point,” says Law. “It would serve the public better if the minimum education requirement was changed to a college degree before obtaining a real estate licence.”

She believes that licensed agents should have to meet certain regulations for minimum sales.

The biggest mistake that an agent can make is viewing this process as a transaction and short-term relationship

As of now, based on licensing board regulations, “an agent can sell zero properties and still keep their license for as long as they wish [if they continue] paying for insurance. The issue with that is there are many more mistakes likely to happen if someone only sells one property every two years.”

Law, who was mentored by two successful agents in the early years of her career, says there should be a minimum standard for license renewal, too, which might encourage license holders to either get experience or work alongside a senior agent who can provide mentorship and other opportunities. “Many agents, unfortunately, try to wing it rather than getting a mentor or working with a team, because they want to try to make money quickly rather than truly learning the business.”

It doesn’t help that there is a surplus of part-time agents in the market, who are often not as experienced or educated about the actual home-buying, home-selling and negotiation processes, Law says. In these instances, there is a high chance of something being mishandled and breaching ethics.

All in all, the key is working with an agent whose experience and relationship you trust and doing your own homework.

“The biggest mistake that an agent can make is viewing this process as a transaction and short-term relationship,” says Hessami. “I look at each deal as the beginning of a potential long-term relationship, and that means putting in real work to get to know the client and what they want and need. Honesty and truthfulness are the foundation to this service. You never get bad results from being authentic and honest with people. And that’s universal, no matter the industry.”

As for the family who came to Hessami after having a bad experience with their agent? After closely working with them and keeping an open line of communication, she was able to find them a “much better” property. Today, they’re proud owners of their very own home.



What Does the Toronto Market Have in Store for 2021

This article was written by Aaron Broverman from

Nikki Hessami is all about the numbers.

The sales representative for Home Leader Realty Inc. isn’t hanging her trust on opinion or a point-of-view, only what the market data is telling her. She chooses not to operate in grey areas or places of ambiguity; if the data doesn’t support it, she doesn’t present it as fact.

These values are a refreshing change in a world where fake news runs rampant and the usual prognosticators and so-called experts can often be found talking out of both sides of their mouth. This is why Hessami — a new, fresh-faced presence in the Toronto real estate scene who lets the evidence speak for itself – is the perfect person to answer this week’s question.

What do you think is in store for the Toronto real estate market in 2021?

Nobody is a fortune teller. Nobody has a crystal ball. However, I am a person who has looked at the market data and the numbers because people can say whatever they want, but these numbers never lie.

I always monitor the Toronto market analysis that comes out every month and recently it has shown that even during the pandemic and even during the lockdowns, the market in Toronto has proven to be very resilient. For example, in October 2020 compared to October 2019 the Toronto market appreciated by 25% in terms of total residential transactions. That’s a big number, and it’s very surprising.

Obviously, the lifestyle of Torontonians has changed during the pandemic. Lots of people want to move to the suburban areas of the GTA because they’re working from home, they’re locked down and they need more space (and bigger spaces). As so many people want to change locations right now, we’re seeing the housing market appreciate a lot in recent months. This is especially true in suburban areas. I have a client right now who’s looking to buy a detached house in Barrie for the simple reason that he can’t afford to buy in Toronto. Typically, for detached homes in Barrie right now, it’s not uncommon to receive 20 to 30 offers on one property with bids ranging from $70,000 to $120,000 over asking.

In comparison with houses, the Toronto condo market isn’t as hot, but total condo apartment sales have gone up 10.5 percent year-over-year and the average price for condos in the third quarter of 2020 was up 8.3% over the third quarter of 2019.

Meanwhile, the Federal Government of Canada has set an immigration target of 400,000 people for each of the next three years. This could mean up to 1.2 million new immigrants in just the next 36 months, and 34% of them will be coming to Toronto. This level of immigration shows us that over the next three years demand for housing will still be very high. In just the last year alone, from October 2019 to October 2020, the average selling price of a GTA home as risen to $968,000 (+13.7%).

All the above data clearly shows that home prices, selling prices, and demand will continue to go up in the Toronto market in 2021.

Overall, Toronto real estate prices will be going up for years. The market may experience temporary fluctuations in that trajectory, but real estate is a long-term investment and, in the long-run, home prices in Toronto will go higher and higher and never stop in this city.

In 2008, the average home price was only $379,000, in 2019, the average home price was $851,000 and in 2020 it’s $958,000. Every ten years, real estate in Toronto booms and it has been going up over these past 10 years because of immigration, attractive jobs, and the fact that Toronto is a world class city akin to London, Tokyo, New York, or Paris. Big companies like Google are in Toronto and lots of people want to be close to these places for employment. Bottom line, the Toronto real estate market will stay strong and become even stronger in 2021.

I also believe a lack of housing supply hitting the market will continue to challenge home buyers and put upward pressure on prices in 2021. Concurrently, interest rates will remain low for the next few years and property taxes will stay the same for 2021. Support for the real estate market from the Canadian government will continue to play a role as well. Developers are getting great incentives from the feds to keep building and that keeps the market very high as well.

Obviously, I’m pretty positive about the Toronto real estate market and my advice would be to take advantage of where prices are now because once the pandemic ends, lots of people with money will come back to the market and prices will go through the roof. Now, is the best time to use the pandemic as an opportunity because Toronto real estate is never going to be cheaper.

This interview has been shortened for both clarity and length.

Please note: The opinions in this article are those of the interviewee and not those of Toronto Storeys. When considering real estate advice speak with your own agent and lawyer.