Shadow flipping raising home prices—observers

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In the wake of the B.C. Real Estate Council’s recent formation of an advisory group that would investigate the increased incidence of shadow flipping in Vancouver’s robust housing market, observers noted that prices might see an upward trend if the practice remains unabated.
 
Shadow flipping—which involves reassigning a real estate contract multiple times before the sale is concluded—is currently not illegal in Canada, but the agents involved are required to reveal their intentions to prospective clients beforehand.
 
Industry players said that the arrangement is a helpful out for clients whose financial circumstances drastically change after they’ve already made their offers, but other less scrupulous realtors and buyers are taking advantage of the practice.
 
“It's almost like the wild, wild West in terms of what people are doing. They're trying to make a quick buck, but they have no intention of taking possession of that home,” Vancouver real estate agent Aaron Jasper told CBC News.
 
He added that the prevalence of this practice might cause would-be buyers to lose faith in the industry.
 
Jasper, who also previously served as the park board commissioner, noted that the continued lack of serious consequences for those who are gaming the system would eventually cause Vancouver real estate prices to spike up.
 
“Whether you're a doctor on the west side or an average Joe on the east side, it really is putting housing out of reach for everybody across the city,” Jasper said.
  • Angelica on 2016-02-11 11:32:15 AM

    it should be quite simple, make it illegal to reassign a real estate contract prior to close of the existing sale.
    Also, why is it that cash sales can happen without verification of funds. We as Broker's need to account for every penny, lawyers who assist cash clients should also have to account for funds. Great way to launder money.
    Another idea for Vancouver, which we use in the National Parks is a need to reside. That would cool things down in a hurry.

  • Michael on 2016-02-11 12:40:34 PM

    But who is holding a gun to anyone else's head and making them pay the inflated price?

    Not that I do this myself, but if I've negotiated a 15% discount from the true market value on a house and wish to on-sell the out has contract at or closer to the true market value, how is my negotiation and deal finding skill a disservice to anyone?

    If I price the resale above market value and it doesn't sell, then that's my problem, and I'll have to adjust to the point where someone will offer what I'm willing to accept.

    Free and informed buyers and sellers of any type of asset will determine the agreed value being exchanged, or no transaction will take place.

    Is it ripping off the buyer if I sell a house for $1,000,000 that they can turn around and sell for $1,000,000 (or more) tomorrow? Yes, Vancouver is in a skyrocketing price market, but it is ONLY because there are people willing to pay those prices, because that's the current agreed value being exchanged.

  • Raymond Green/Mortgage Broker on 2016-02-11 10:18:01 PM

    clients be like i buy you buy i he buys and the lawyer ok everyone in my office i need proof

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