Dual Agency seems to be today's hot topic. Most people think it occurs when a Sales Person represents both Buyer and Seller. In realty it occurs when one or more different Sales People from the same Brokerage represent the Buyer and the Seller. When there are different Sales People from the same Brokerage involved, we should really rename this, Designated Agency. This is where RECO, The Real Estate Council of Ontario, should step in and introduce new rules to cover each case. The other problem is that a Sales Person acting in Dual Agency knows all of the offers submitted. Under the Real Estate and Business Broker's Act, you could only disclose the number of the offers and who are the Sales People presenting these offers. Why not change the rules? With competing offers, lets disclose all the terms of the offer; the price, conditions, closing date, etc. to all ...
The Problem with Dual Agency
November 30, 2016
Market Report November-December 2016
November 21, 2016
Sales Commentary On one level, sale results for October suggest that this market will continue indefinitely. Overall, sales on the Toronto Real Estate Board were ahead by 11.5% compared to October of last year. But there are signs that these sale increases cannot continue. ‘Active’ listings are down by 34% from last year at this time, and ‘days on market’ has shrunk to just 16 – meaning that we are running out of saleable properties. In 2015, sales from September to October increased by 7.5% (which is normal). In 2016, sales from September to October declined by 1%. This slowing is a direct result from less listings on the market. Demand (buyers) has not slowed down and the Home Price Index for detached housing in Toronto is up by 19% in the last year. This shortage has now transferred into the condo market (even with all those cranes).The result is ...
Who Regulates Realtors®?
November 16, 2016
Recently, the media has pointed the finger at unscrupulous Realtors® in terms of self-dealing and unethical behavior. They want change and they point the finger at self-regulation. RECO, The Real Estate Council of Ontario was established to enforce the real estate and business brokers act and to deal with consumer complaints. It was set up by the Ontario government supposedly to provide self-regulation. In reality the government just out-sourced the cost of regulation onto the shoulders of salespeople and brokerages. Today, 6 out of 9 directors are appointed by the Government. Realtors® elect only 3. All RECO employees are government employees. Realtors® have no say on hires and Realtors have to say on introducing new regulations. So, if the public wants change, don't blame realtors, blame the Ontario Government for inaction.
Toronto Market Report October-November 2016
October 20, 2016
Sales Commentary September sales followed a similar pattern to previous months. Sales were 21% higher than in September of 2015. But of more significance was that sales of 9900 units were more typical of a June and July than of a fall market. At the same time, listings continued to be in short supply – down 36% from a year ago. The end result is a continuing upward pressure on prices of all types of housing. The condo market mirrored the stats of the overall market – sales ahead by 30% and active listings lower by 40% against September of 2015 numbers. But what everyone is talking about is the mortgage changes introduced by the Federal Government, effective October 17. First, all insured mortgages – both high ratio and conventional will have to be qualified at the POSTED RATE (4.54%) and not the actual five year rate nearer to 2.5 ...
Implications of Canada's New Mortgage Rules
October 17, 2016
On October 3rd, a firestorm hit the real estate market when the minister of finance announced two changes to mortgage rules. Last week we discussed what those mortgage rule changes where. This week we want to take a look at what the implications will be of the new mortgage rules, especially those of people having to qualify for the posted rate as opposed to the actual rate for their mortgage. Will Prices Fall? First off, with buyers having less money to purchase, will prices fall? The answer is no. In real estate, if the Sellers don't get their price, that is what the last property sold for, they just take the property off the market. They do not reduce their price. What About First Time Buyers? First time Buyers will have two choices going forward, buy smaller, not low rise but condos, or continue to rent. For those trying ...
New Mortgage Rules
October 7, 2016
On October 3rd, a firestorm hit the real estate market when the minister of finance announced two changes to mortgage rules. Closing the Loophole The first rule was to remove the principal residence exemption for non residents. But think about it, how can a non-resident have a principal residence in Canada, Impossible! But now we're closing that tax loophole and that will have little impact on the real estate market. 'Stress Test' on Insured Mortgages The Second change is more serious. Now, both high ratio and conventional mortgages insured under CMHC and two other companies must be qualified under the posted rate, and not the actual rate. Remember, for people who took out 5 year mortgages, they used to be able to qualify at the actual rate. The bad news is that the posted rate is about 2% higher than the five year rate. People then will be forced ...
State of the Union When it Comes to New Mortgage Changes
October 5, 2016
The Federal Government continues to tinker with mortgage rules that it can control in an attempt to slow down real estate markets, particularly in Vancouver and Toronto. The first change, to remove the Principal Residence Exemption, for non-residents described as closing a tax loop hole is a nothing. Revenue Canada has never defined a Principal Residence and so non-residents claimed it. Think, how can a non-residenct have a principal residence in Canada? Impossible! But that is what you get from bureaucracy. Almost all non-residents buying property in Canada never considered this a factor in buying. Neither should you when advising clients. The second change, making BOTH high ratio and conventional (under 80% loan to value) borrowers qualify under the Posted Rate instead of the fixed five year rate of their mortgage will reduce the amount of money that people can borrow. The Posted Rate is the average posted rate ...
Navigating FSBOs and Mere Postings
September 26, 2016
Since it's becoming a bit more common, this week we wanted to tackle how REALTORS® should navigate FSBOs and Mere Postings. Mere Listings are MLS Listings in which the Realtor has agreed not to provide services to the Seller other than submitting the listing to MLS, whereas FSBO stands for "For Sale By Owner." Getting Started One of the first things to consider when you get a new Buyer Client is creating two BRA (Buyer Representation Agreement) contracts, one for MLS Listings and one for Mere Postings and FSBOs. Each contract can state their own commission and this will actually create a dialogue with your buyer regarding various buying scenarios, agency relationships, buyer commission obligations and procedural and document handling. There are steps that you are going to have to follow when dealing with these types of transactions ,but first it starts with the Buyer showing interest. Different Scenario's So ...
Market Report September-October 2016
September 20, 2016
Sales Commentary August sales on the Toronto Real Estate Board were up by 23% over August of last year. But to make an even bigger statement, August sales were only 1% lower than July. Last year the August to July drop was 19%! Also August sales in 2016 are higher than for sales in any Fall month for 2015. However, there is a double edge sword. Active Listings in August were 37% lower than for the same month last year, and new listings for August were down by 1%. This can only mean continued rising prices in the short term; and if things don’t change, then for a considerably longer period. With prices for low rise housing in Toronto becoming unaffordable for many, the shift to more affordable condo housing, which we have predicted for the last two years, is now starting to snow ball! In the downtown condo market ...
Elements of Negotiations
September 9, 2016
Most of you have heard the phrase, “The one who speaks first loses.” Does this mean an equally matched negotiation results in two salespeople locked in a room staring at each other for hours on end? There is truth to silence as an ally but there is more to consider than this alone. So, what is the most important factor in negotiations? Communication can either be verbal or nonverbal. There has to be a statement of terms in any negotiation. Choice of words, pace, tone, medium and non-verbal clues such as body language all help deliver those terms. It’s important to focus on what you want to communicate and stay focused on objectives. Start by discovering, understanding and differentiating between your client’s needs versus their wants. If you are going to use technology to communicate, you must understand how to use it. Can the receiving party accommodate your method of ...