Newly muddled world of real estate
This is an uneasy time for residential real estate. If you’re
selling, you wish you’d sold six months ago; that is if you had a
choice. If you’re buying, you worry it’s not the bottom but rather
the middle of a price slide that’s only begun. For most, we don’t
have to buy or sell this month, and that’s a relief. However, there
are degrees of angst. I’m part of the club that was feeling good
about the gains a condo I’d purchased 18 months ago had made. I
suspect these paper profits will soon evaporate. I worry what
happens when all those new towers with units to sell go on the
market. Oversupply of new units isn’t going to make my place more
attractive. And speaking of oversupply, what about all those people
who can just afford their mortgage? What happens if they lose their
jobs and are forced to sell? (And are these the fears — regardless
of the facts — that drive markets down?)
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PM Harper, after taking away 40-year mortgage, looks to give out …
… more affordable for first-time homebuyers to get into the real estate market through
a tax credit that would deliver up to $750 to cover dreaded closing costs. …
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Report points to slower construction pace
Balanced resale markets across the province of Ontario will lessen new home demand, according to the 2008 third quarter CMHC Housing Market Outlook.
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How I Learned To Stop Worrying
With her marriage in the dumpster, Theresa Suzuki set out to
find a new home for her children and herself. As if she didn’t have
enough on her plate, she fell in love with a three-bedroom tear-down
in the Beach. In the last of a three-part series, Ms. Suzuki
documents her adventures in the land of single motherhood and home
renovation.
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Provincial infrastructure funds welcome sign for homebuyers
Would-be new homebuyers could be forgiven for not connecting the dots between the pending federal election, the most recent infrastructure announcement by Ontario Premier Dalton McGuinty and the price of new homes.
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Green features sought after by home buyers
NEW YORK — Home buyers increasingly want architects to give them green features
like extra insulation instead of extra room to host in-laws, an architects??? …
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Say goodbye to ‘Vaughan resident’
Today you are a Vaughanian.Ever since John Graves Simcoe, Upper Canada’s first lieutenant-governor, gave Vaughan its name more than 200 years ago, its residents claimed no identity.The Township of Vaughan was born in 1850, grew to be the Town of Vaughan in 1971 and matured into the City of Vaughan in 1991.Through it all, a Vaughan resident was, well, a Vaughan resident.”We do not have a derivative saying what you call people from Vaughan,” said Katherine Barber, editor-in-chief of the
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Moderate March Real Estate sales in Vaughan
Low inventory levels kept sales brisk but well off record levels, TREB President Maureen O’Neill announced today. “With 6,631 transactions recorded during March, the overall Greater Toronto Area resale market was down 22 per cent from the 8,518 sales of March 2007.
Sales were not evenly distributed across the Greater Toronto Area. In the City of Toronto (416 area code), they decreased 27 per cent to 2,527 from last March. However, the 905 suburbs saw only an 18 per cent decline, to 4,104 sales.
In Vaughan, the resale real estate market (District N08), was down 14 per cent to 196 transactions in March 2008, compared to 169 in March 2007.
Of note, average real estate prices in Vaughan rose marginally at just under 1% when comparing March 2008 to March 2007 for Detached home sales. For Semi-detached resale homes, the increase was much more pronounced at 8%.
Since overall inventory, at 20,533 listings, fell six per cent between these two time periods, a portion of this result can be attributed to a lack of suitable product. And this lack of product was at least partially caused by the severe winter weather that kept both buyers and sellers on the fence during the first half of the month.”
Overall, average prices rose four per cent in the GTA to $380,338 over March of 2007. Within the City of Toronto proper, however, the average, at $404,361, increased only two per cent over the $394,199 recorded during the same period last year. Furthermore, City of Toronto districts bordering the 905 averaged $347,882, up less than one per cent from the same period last year.
Source: Toronto Real Estate Board
Be wary of March Madness pools
There are no shortages of homes with pools in many neighbourhoods within Vaughan. They seem to be growing in popularity and probably in part due to demographics. For the busy Boomers, it’s often a sensible alternative to escalating vacation real estate prices. Why leave your home for the cottage, when you can create a cottage at your home, some will argue. (I’m not one of them).
Buying a re-sale home with a swimming pool at this time of year can be a contentious issue to deal with when it comes to satisfying yourself of the pool’s working order and condition.
As a buyer you are faced with a predicament because unlike the rest of the home, the pool will not be a component of the home inspection.
There are two straightforward reasons for this:
1. A complete and proper inspection of a pool and associated equipment cannot take place until it has been opened and is operating.
2. Pool inspections are beyond the normal scope of expertise of traditional home inspectors.
So what are some of your options you ask? Well, there are several and every situation is a unique one.
One approach would be to include a conditional offer clause in the agreement of purchase and sale which is subject to a professional pool inspection. Unlike traditional home inspectors, there are a number of companies which offer these services. Quite often, they are representatives and/or principles of a larger pool installation company.
The problem with this solution again relates to #1 above. If the closing date of a home you are considering is anytime before the pool can be opened, this approach is not possible. By definition, a sale cannot close until all conditions are met or waived.
Another approach would be to include a seller’s representation and warranty on the working condition of the pool and equipment. The downside to this approach is that unlike a conditional inspection, the use of this clause does not provide an inherent mechanism for terminating the agreement of purchase and sale. The only recourse for the buyer here would generally be a good-faith settlement and agreement or civil lawsuit. The advantage of this approach is that it avoids a condition in the agreement which can extend for months (ie until the pool is opened) and thereby arms the buyer with a more appealing offer, all other things being equal.
These are simply two options one can take and there is no all-encompassing method for handling this issue. There are many variables to consider and the guidance of your real estate representative and/or lawyer is certainly well advised.
Cannonball!!!
Multiple Representation: A Manifesto for Legalized Conflict of Interest
In Ontario, real estate agency is governed by the Real Estate Business and Brokers Act (”REBBA”). Under the provisions of the Act, a real estate brokerage may act on behalf of BOTH a Seller and a Buyer in respect of the same trade in real estate, provided all parties consent to this in writing and appropriate disclosures are made by the brokerage.
The situation is referred to as Multiple Representation.
According to Ontario Regulation 580/05 (made under REBBA) which forms the Code of Ethics, Section 16 reads as follows in respect of Disclosure before Multiple representation:
A brokerage shall not represent more than one client in respect of the same trade in real estate unless it has disclosed the following matters to the clients or prospective clients at the earliest practicable opportunity:
1. The fact that the brokerage proposes to represent more than one client in respect of the same trade.
2. The differences between the obligations the brokerage would have if it represented only one client in respect of the trade and the obligations the brokerage would have if it represented more than one client in respect of the trade, including any differences relating to the disclosure of information or the services that the brokerage would provide.
Clients must fully understand the impact of such representation on information provided to them and services offered. Brokerages set out these details in the representation agreement describing what salespersons in a multiple representation role will and will not do. The scope of such limitations will vary according to brokerage policy.
The Ontario Real Estate Association’s prescribed Buyer representation agreement includes the following language in respect of Multiple Representation disclosure:
“The Buyer understands and acknowledges that the Brokerage must be impartial when representing both the Buyer and the seller and equally protect the interests of the Buyer and the seller in the transaction. The Buyer understands and acknowledges that when representing both the Buyer and the seller, the Brokerage shall have a duty of full disclosure to both the Buyer and the seller, including a requirement to disclose all factual information about the property known to the Brokerage.
However, The Buyer further understands and acknowledges that the Brokerage shall not disclose:
• that the seller may or will accept less than the listed price, unless otherwise instructed in writing by the seller;
• that the Buyer may or will pay more than the offered price, unless otherwise instructed in writing by the Buyer;
• the motivation of or personal information about the Buyer or seller, unless otherwise instructed in writing by the party to which the information applies or unless failure to disclose would constitute fraudulent, unlawful or unethical practice;
• the price the Buyer should offer or the price the seller should accept; and
• the Brokerage shall not disclose to the Buyer the terms of any other offer.
However, it is understood that factual market information about comparable properties and information known to the Brokerage concerning potential uses for the property will be disclosed to both Buyer and seller to assist them to come to their own conclusions.”
So what does all this mean?
In a nutshell, it’s a Manifesto for the Legalization of the Conflict of Interest hidden in a blanket of greed affectionately known as the ”double-dip”. I’ve coined my own phrase, namely the “2-1-0″…Getting paid Twice, for One transaction, and serving Zero parties.
The most obvious analogy would be akin to having a lawyer act in capacity for both a defendant and plaintiff. The Relevant Rule of Professional Conduct of the Law Society of Upper Canada reads:
“Conflict of Interest, Rule 5
The lawyer must not advise or represent both sides of a dispute and, save after adequate disclosure to and with the consent of the client or prospective client concerned, should not act or continue to act in a matter when there is or there is likely to be a conflicting interest.”
Even though the real estate industry has provided for these very specific requirements when it comes to multiple representation, the substance over form still wreaks of conflict. It is quite arguably one of the biggest strikes against the Real Estate profession insofar as public perception is concerned, in my humble opinion.
What can you the consumer do about this?
Thankfully, our Democracy still provides for consumer choice. Since written consent is one of the prerequisites to multiple representation, you can simply refuse to agree. This does not mean you necessarily have to refuse the unilateral service of the Realtor in question, but only to the extent he or she is also acting for someone else.
Keep in mind also, that situations involving two Realtors from the same Brokerage also are considered to be Multiple Representation situations since it is technically the “Brokerage” that is the agent in the transaction. The individual broker or sales representative is merely granted authority to bind the Brokerage in the transaction. It follows then, that multiple representation is far less likely an occurrence in smaller brokerages.
Caveat Emptor…Excerise your Options.
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