Shadow flipping banned by Richmond real estate firm
'Instead of waiting we're being a proactive company," says Metro Edge CEO Kelly Lynch
A Richmond-based real estate company is garnering attention by offering a no-shadow-flipping guarantee to its clients.
"Instead of saying 'let's let it go' and 'it's not a big deal,' well, it's a big deal to someone who lost," said Metro Edge Realty CEO Kevin Lynch. "So instead of waiting, we're being a proactive company."
Shadow flipping involves a real estate agent reselling a property numerous times at increasingly higher prices before finally closing the deal.
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The agent collects multiple commissions by using an assignment clause in the real estate contract that allows for the flipping. Sellers lose out because they do not realize the highest potential price for their property, and buyers ultimately end up paying more.
The Real Estate Council of B.C. has appointed an independent advisory group to investigate the practice of shadow flipping. The review will examine how the council identifies and responds to alleged misconduct and whether conduct requirements are adequate and effectively enforced.
The independent panel is expected to provide an interim report by the beginning of April, and a full report with recommendations by the end of May.