A real estate agent wants to warn potential sellers about a rise in what he calls "questionable tactics" from buyers trying to put in lowball offers before a property even hits the market.

Desmond Brown said he began noticing the practice in late 2016 — and said that it seems to target those who have owned a home for decades and may not be aware of its value in the current market.

"The owners have paid such a low amount for this property they've owned for 20, 30, 40 years, they think this [offer] is huge," he said.

He first encountered the issue when he planned to list an East York two-bedroom, detached bungalow near Coxwell and Mortimer avenues for $799,000. The home had been the family's possession for 75 years, but its elderly owner had recently died.

But before the home hit the open market, a buying agent, who said they represented a developer, went directly to the sellers and offered to buy the bungalow for lower than the listing price.

Desmond Brown said he believes some buying agents are preying on older sellers who may be unaware of their home's value. (CBC News)

Sensing that something was amiss, the family declined and decided to test the market.

"We ended up selling it for a good $75,000 more than what that agent had brought before it went on the market," Brown said. And "that agent who came in with the original offer to them, was nowhere to be seen."

Since then, Brown said he's seen the same thing happen with at least four other listings.

These agents are acting in bad faith, he said, by trying to deal directly with a seller and "basically trying to rip them off."

A popular trend has been for developers to revamp an older property, or build a new home there, and flip it for profit. (CBC News)

There are many reasons why a buying agent, like the one who approached Brown's clients, may try to get an older property for cheaper than its market value. Chief among them is the possibility of renovating, and then flipping the home for a significant profit.

A competitive market

But right now, Toronto is a seller's market. The average home price in the Greater Toronto Area jumped to $730,472 in December, up 20 per cent from the previous year.

And with housing inventory low in the Greater Toronto Area, demand from prospective buyers continues to grow, said Kelvin Kucey, deputy registrar of regulatory compliance for the Real Estate Council of Ontario (RECO).

Kucey said this creates a situation where buyers — whether working for themselves or on behalf of a developer — are willing to push any advantage to get property in popular neighbourhoods.

Kelvin Kucey of RECO said agents could face penalties if they violate the Realtor code of ethics. (CBC News)

"[These buyers] are trying to swing a deal for their client, and certainly, acting only in their client's best interest," Kucey said. "It's certainly not with a view to being fair or doing so honestly."

The "lowball" tactic Brown encountered may not be illegal, but Kucey said it could breach the Realtor code of ethics.

And if someone lodges an official complaint against an real estate agent, they can take legal action against the buyer who made a direct offer to a seller.

"Real estate professionals know very well they shouldn't be contacting ... a seller directly," Kucey said. "They have to go through the agent.

How to protect your interests

In order to ensure sellers get good value from their homes, real estate experts recommend following these steps before selling: