The Québec Federation of Real Estate Boards (QFREB) has filed an application for authorization to institute class action against for-sale-by-owner company DuProprio for misleading advertising and unfair competition.
In a news release, the QFREB says it “alleges that DuProprio has been systematically engaging in deceptive advertising campaigns for years, misleading Quebec consumers about the so-called savings associated with DuProprio’s services and about the supposed advantages of its real estate services compared to those of brokers. Among other issues, DuProprio presents real estate brokers in a negative manner, systematically denigrates them and questions their competence and integrity.”
The QFREB says “DuProprio emphasizes to potential sellers that they will ‘save them thousands of dollars’ and its website contains many testimonials about these so-called savings compared to the presumed cost of using a real estate broker. The company even offers sellers an explicit guarantee: ‘there will be more money left in your pocket by selling your property with DuProprio as opposed to paying a commission.’ The QFREB alleges that DuProprio’s claims are false and misleading.”
In response, DuProprio says, “This is another attempt orchestrated by the real estate industry to slow the growth of property sales without intermediaries in Quebec and undermine public confidence in this otherwise very popular option for consumers.” In a statement, the company says: “DuProprio regrets that the real estate brokerage industry invests so much effort into a strategy that ultimately aims to deprive consumers of the freedom to choose the service that best suits them to sell their property.” It says the QFREB is just trying to “create a false sense of distrust” of FSBOs.
The QFREB says that to enhance its product, DuProprio “deliberately ignores the variation in real estate brokers’ rates. It uses an arbitrary comparison rate (benefiting DuProprio) that is presented to consumers as an industry standard. The comparative calculator on its website does not allow consumers to change this artificially standardized and inflated rate.”
The QFREB is also alleging “that DuProprio lies to Quebec consumers about several other aspects of the real estate broker profession. For example, it falsely states that brokers do not offer any guarantees against hidden defects. In doing so, DuProprio disregards all of the legal protections provided by the legal insurance programs offered by many real estate agencies. These insurance programs offer a multitude of additional legal protections to clients of real estate brokers.”
DuProprio says that if the QFREB really took consumers’ best interests to heart, it would evaluate their satisfaction with the services of Realtors. It cites a poll by Leger in 2013 that said only 28 per cent of respondents said they trust real estate brokers.
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Note: This story originally stated that DuProprio operates as ComFree elsewhere in the country. In fact they are part of a national network, but Randall Weese, broker of record for ComFree in Ontario, says that “No ComFree entity is implicated in this matter. In Ontario and Alberta, two distinct corporate entities offer brokerage operations under the registered name ComFree Commonsense Network.”