The Vancouver-area realty firm under investigation for questionable practices has just posted new ads offering homes for sale through contract assignment – the controversial and profitable practice known as "shadow flipping," which Premier Christy Clark has promised to curtail.

New Coast Realty agents Sylvie Zhao and Lucy Wang confirmed to The Globe and Mail the two homes featured were just purchased by buyers who have since hired the brokerage to flip them before the contracts with the initial sellers close.

The ads posted this week on WeChat, a Chinese-language social media site, offer deals priced at $1.15-million and $1.85-million. The New Coast agents refused to give the addresses for properties, so ad readers cannot look up the price for which those homes were just purchased. Ms. Zhao said addresses are not advertised because the assignment deals are "exclusive," and not available through MLS.

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(Read a condensed translation of an internal training session at New Coast Realty)

In a typical shadow flip, a speculator buys a property and then re-sells the sales contract immediately to a new buyer or buyers for a higher price. The initial seller sometimes does not know about it. At closing, that seller receives less for their property than what the end buyer pays. The middleman speculator pockets the difference. The property transfer tax is paid only once, at the final sale.

Shadow flipping is increasingly controversial in the hot Vancouver real estate market. Last month, Ms. Clark promised to bring in new rules aimed at removing the profit, by requiring any gains to be paid to the initial seller in deals involving licensed real estate agents.

Contract assignment is legal in B.C. and other provinces. Ms. Zhao said New Coast agents did not arrange initial purchases – those were done at another brokerage. "I am just doing the assignment," she said.

"The buyer-owner who wants us to sell asked us to assign it," Ms. Wang added.

The company points out in a statement that there is no rule against what its agents are doing. "Assisting clients in this way is entirely lawful and within the regulations," it said.

The industry self-regulator, the Real Estate Council of B.C., says it will monitor the transactions.

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"New Coast Realty is required to promptly report to the Council any trade in real estate that is an assignment where a licensee related to the brokerage acted on behalf of one of the parties," it said in a statement.

"Should the Council find non-compliance with the conditions or any other aspects of the Real Estate Services Act, the Council will take such further action as it considers necessary," the statement said.

New Coast has been under fire for what its owner taught agents in a training session last fall. In a recording of the October session obtained by The Globe, owner Ze Yu Wu is heard coaching agents, in Mandarin, on how to talk vendor clients into selling their homes quickly, for a lower price than what they want.

As a result of The Globe's reporting, the regulator imposed several conditions on the brokerage's licences. The Real Estate Board of Greater Vancouver, the body that authorizes access to the MLS system, is also investigating the firm's practices.

The first condition imposed by the council required New Coast to appoint a new managing broker approved by the council. The Globe has learned Edwin Yan, a managing broker who has been with the company for nine months, now has that job.

The council says it approved Mr. Yan's appointment, along with another broker Dave Erickson, as an interim measure only.

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"The Council has directed New Coast Realty to seek a qualified managing broker(s) from outside the company, who must be approved by the Council. Until a qualified replacement candidate is identified and has received our approval, Mr. Yan and Mr. Erickson will manage the brokerage," it said.

The firm's previous managing broker, Josh Rosenberg, who was at Mr. Wu's training session, is now an associate broker.

The company insists Mr. Wu's words in the recording were taken out of context. The Globe has now posted online an English language translation of the session.

Several former New Coast agents have said Mr. Wu's ideal business model is to sell client properties to speculators who are also New Coast clients and then flip them through assignment. The Globe's investigation revealed two specific cases where New Coast agents are accused of arranging or trying to flip properties for a higher price, at the expense of their own seller client. New Coast denies any wrongdoing.

David Eby, the Vancouver MLA who recently asked police to investigate the brokerage, said he finds the English translation of Mr. Wu's full comments during the training session disturbing.

"The presentation is an effort to undermine the client's best interest," Mr. Eby said, adding that he thinks Mr. Wu's meanings are clear. "It's a training session on how to lie to the client – and sound convincing."

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Mr. Eby points to one section, in which Mr. Wu coaches agents on how to persuade homeowners wanting to sell to offer agents for buyers a bonus of several thousand dollars to entice buyers to make offers. Mr. Wu suggests in the training session agents should later hold back most of that bonus for themselves.

"The bonus stuff is just appalling," Mr. Eby said.

Mr. Eby called on the regulator to suspend the brokerage firm's five licences. The council indicated it is too early to say what, if any, further measures will be taken.

"We have taken extraordinary measures to protect the public," its statement said. "The allegations against New Coast Realty are complex and far-reaching, and the Council will thoroughly investigate all of them."

Ktomlinson@globeandmail.com