Ontario’s Real Estate Industry to Remain Self-Regulated

In light of recent changes in the B.C. real estate market, the Real Estate Council of Ontario was put to the test. It passed with flying colours.

The much-publicized growth in the British Columbia real estate market has led to a swift movement by the B.C. government, removing controls of the real estate industry there to self-govern & placing oversight in the hands of the provincial parliament. In doing so, B.C. cast a spotlight upon the Real Estate Council of Ontario, and perhaps TREB (The Toronto Real Estate Board) in particular. The question being: If sizable growth in B.C. can be, in part, attributed to misconduct by real estate industry players, does Ontario’s current governing body still have the means & morality to steer the ship?

In the eyes of the Ontario government, it’s a resounding “yes”.

With no planned changes to the governing model, recent statements from the Ontario government can be seen as a testament to the integrity and stability of the real estate tradespeople in our province. The comfort with the Real Estate Council of Ontario’s current operations likely stems from a variety of places, but there are two factors I point to when discussing why RECO is so effective.

Firstly, directors & disciplinary panelists come from both within and outside the real estate industry. This limits the favouritism and protectionism that can fester within close-knit industries such as this. It makes punishments & disciplinary decisions fair & equitable, ensuring the punishments fit the crimes where they’ve occurred.

Secondly, RECO is progressive and dynamic, ensuring that standards & upheld, and even instituted ahead of their time. For example, among a list of suggested changes to the B.C. industry’s regulatory processes, about two-thirds were already implemented voluntarily within Ontario. RECO’s inherent desire to protect consumers and the integrity of the industry among its members shines through in that regard.

For more valuable insight into the strengths of the Real Estate Council of Ontario, and how they compare to the challenges faced out west, I’d recommend the bulk of Mike Hager’s article from last week’s Globe & Mail, below.

Unlike British Columbia, Ontario real estate to stay self-regulated

Mike Hager, Globe & Mail, Vancouver, July 01 2016

Ontario has no plans to change how Canada’s second-hottest real estate market is governed, with its self-regulating body arguing it already has many of the safeguards that have been missing in British Columbia, where the industry has just lost the right to police itself.

Real estate agents in Ontario are licensed, investigated and disciplined by an agency run by their peers: the Real Estate Council of Ontario.

B.C. Premier Christy Clark announced this week that her government is taking back control of the industry, removing the Real Estate Council of British Columbia’s ability to regulate agents and brokerages. The province had been under pressure to act since a series of Globe investigations found the province’s regulator failed to protect home buyers and sellers from unethical realtors.

Marie-France Lalonde, Ontario’s Minister of Government and Consumer Services, said the province has no plans to change the role of the real estate council, whose jurisdiction includes Toronto, where the frothy housing market is also raising concerns about speculation, soaring prices and the possible realtor misconduct that comes with such conditions.

“We recognize the significant and effective role that the Real Estate Council of Ontario plays in regulating Ontario’s busy real estate industry and in enhancing consumer protection,” Ms. Lalonde said in an e-mailed statement. “Our government is not considering changes to Ontario’s real estate regulation model at this time.”

British Columbia’s overhaul came after an independent panel called for widespread change within the industry, concluding the Real Estate Council of B.C. is dominated by industry members who took disciplinary action reluctantly and tentatively.

While the panel did not recommend ending self-regulation, as that larger issue was outside its mandate, it did raise concerns about the role of real estate boards and trade associations. The boards have their own parallel – and private – discipline process.

The panel said the province’s 11 local real estate boards should relinquish this “quasi-regulatory” role, because they wield too much power in policing realtors, and the two separate tracks for complaints cause too much confusion for consumers. (In its 2015 annual report, a council survey of real estate clients found only 30 per cent of respondents knew how to file a complaint with the regulator.)

The Real Estate Council of B.C. currently includes 17 members, three of which come from outside the industry. The panel recommended it be split evenly between the industry and outside. The B.C. government has promised to go further, with a majority of non-industry members.

Three of the Ontario council’s 12 directors come from outside the industry.

The registrar of the Ontario council, Joe Richer, said his self-regulating body made many of the changes recommended in British Columbia long ago. That includes taking over any complaint from a member of the public regarding a realtor from the province’s more than 40 local real estate boards, he said. “What’s happening in B.C. really is very very similar to what happened to Ontario in the mid-1990s,” Mr. Richer said. “I’m pleased [that], by my tally, at least two-thirds of [the improvements B.C. is committing to] Ontario is already doing in whole, or in part.”

Dan Morrison, president of the Real Estate Board of Greater Vancouver, said his private association is eager to help the province make the “progressive” changes, including creating just one track for consumer complaints.

“We’re happy not to get those phone calls,” said Mr. Morrison, whose board grants access to the MLS listings system for 12,800 of the region’s realtors. “The [thousands of agents] in Greater Vancouver were unfairly tarred with a negative brush this week because of the actions of a few who allegedly failed to act in the best interests of their clients.”

Earlier this year, the Greater Vancouver board voted to increase its maximum fines to $30,000, but its disciplinary decisions are kept secret, even from those who submitted the complaints.

British Columbia’s finance ministry is working to implement the 28 recommendations from the independent panel, foremost of which is creating a new, expanded office of the Superintendent of Real Estate and hiring a replacement for the current superintendent, Carolyn Rogers, who is leaving for a new job in Ottawa regulating the banking sector.

In the meantime, consumers such as Sukhjit Bassi of Richmond, B.C., are wondering what will happen to complaints they made to the real estate council. Mr. Bassi filed a complaint two months ago alleging one of New Coast Realty’s top realtors deceived him, selling his house for less than market value to a speculator with whom she had arranged deals before. “I don’t mind my complaint just getting closed and nothing happens, as long as these guys are now regulated properly,” Mr. Bassi said.

Get swept away in Guelph this Fall

Falling leaves, crisp mornings and a world of colours are all signs that Guelph is falling into autumn, but those aren’t the only things this season brings! The City of Guelph and surrounding areas have plenty of activities for those looking to enjoy being out and about during this time of the year.

Whether you’re scrambling through the corn maze or picking out a pumpkin, fun for families and friends can always be found at Strom’s Farm. At their Market and Bakery, open daily, you’d be hard pressed to find something you wouldn’t enjoy with a menu filled with fall treats like pumpkin pie and butter tarts. If you’re looking for adventure, the Farm’s corn maze is the place to be. Each year Strom’s Farm chooses a different charity to model the maze after and support through admission proceeds. If that’s not thrilling enough, the maze will be open at night from 6:00 – 9:00pm starting October 19^th – just make sure to bring a flashlight!

For more outdoor fun, take a trip to The Donkey Sanctuary of Canada. Throughout October, you have the opportunity to spend time with the nearly 100 donkeys being cared for at the foster farm. The volunteers take you through the process of brushing and grooming a donkey and offer educational Donkey Talk info sessions. There are also beautiful nature trails surrounding the farm that are open to hikers. Visitors are welcome every Wednesday and Sunday of the month, from 10:00am – 4:00 pm. There are no admission fees, but the Sanctuary is always accepting donations.

If you’re an early riser possibly looking for some locally grown gourds, downtown has just the place for you. On Saturday mornings only, from 7:00am – 12:00 noon, the Guelph Farmers Market is the place to go for fresh produce and a true feeling of community. Their wide selection of fresh foods isn’t their only attraction either. The Market’s local artisans also bring an array of top-quality handmade art, gifts, trinkets and clothing.

In the spirit of supporting your fellow Guelphites, if you love the good old hockey game you’ll find a Friday night well spent attending one of the many Guelph Storm games. Buy some popcorn and don’t forget your foam finger when you go cheer on your local OHL team.

The weather is getting cooler doesn’t but the fun doesn’t end there. Explore the beauty of Guelph this fall, and enjoy what your city has to offer.

When school is back in session…

…Homebuying ramps up for a busy fall

School is back in session and that means routine has returned. Real estate professionals and homebuilders are now ramping up for a season of new opportunities in home ownership. If a new home is on the horizon for you this fall, the kids aren’t the only ones with homework to do.

Homebuilders know that those seeking new homes this fall are eager to view new projects, new releases and new opportunities. They oblige by using  September to unveil their plans for the coming months as they introduce a vast selection of new home sites and new phases of development. Often these announcements address pent-up demand from the summer months, and are offered with special pricing and incentives to encourage prompt decision-making so construction can begin before the snow flies.

Be ready when they roll out these specials by obtaining mortgage pre-approval. By knowing what you can afford, the house hunting is much easier. When looking at a three- to four-month build, there is no time to waste and those who buy in early fall are rewarded with a home that can be ready and waiting for the holidays.

Homebuyers looking to make a move often want to do so before Thanksgiving, Christmas or the new year. Others are looking at the end of the school year. With deadlines like these in mind, it’s essential to do your research. Key decisions such as location and housing type need to be addressed first. Lifestyle and amenities, schools, medical services and transportation access are the important factors when choosing a community – whether it’s detached, a condo or a townhome.

If you’ve got a young family, you may want to be near parks and rec centres; if you’re empty-nesters, perhaps an adult lifestyle community is more in line with your needs. How much time do you want to spend on maintenance? If you don’t, a condo might be the answer. Find out what is being built and where and determine if it’s a good fit for you and your family. Other things to research include your builder and their reputation for meeting deadlines and customer satisfaction. If it’s a condominium project, find out the status of sales and construction. A delay in construction can create a domino effect when you need to sell your own home or give notice to a landlord.

At this time of year, there are plenty of builder incentives to encourage buyers to commit now, rather than later. You’d be surprised at what might be included. First, you need to be aware of the standard features so you can compare apples to apples and oranges to oranges. Some builders might offer enhanced standards that are reflected in a higher price point. If you learn your standard features, you’ll recognize a great incentive and price when you see it.

By doing your homework now, you’ll be ready to take advantage of the incredible housing opportunities you’ll come across this fall.

April Showers Bring May Home Sales

The traditional “spring market is heating up” rhetoric may or may not be overplayed, but the reality is: The spring market is where all the action happens. It is without question the most popular time of year for listings to hit the market, as sellers aim to capitalize on the better weather for marketing and showing their property. It also bodes better for families, setting up a moving day ahead of when kids go back to school, making for an easier transition for everyone.

Market conditions create opportunities, though different circumstances influence who holds the upper hand. A few listings could trigger a boom in Guelph this spring, as the way things stand, the market is very seller-friendly. The quantity of transactions in Guelph is down from this time last year, though average prices have continued to rise. The numbers seem to suggest a shortage of available properties, which coincides with the consensus among Realtors. With more buyers than sellers, great properties should sell rather quickly, as buyers have additional motivation to act.

With a shortage of properties on the market, as you could expect, homes have flown off the shelves. The average number of days spent on the market is around 27 days, which is exceptionally quick. The sale to listing ratio has been floating around 70% as well, suggesting that the majority of listed properties are selling well within a reasonable time.

If you were considering a move in the coming months, a sellers’ market presents a great opportunity for a seller to capitalize. It means your likelihood  of achieving a timely sale, in a market more willing to pay your asking price, improves significantly. There may be a lot of hype around the spring market every year, but it always seems to live up to the billing.

Planet Realty is a full service brokerage and has a firm understanding of Guelph’s real estate market.  We guide both sellers and buyers through the process.  If you are considering selling or buying a home, do not hesitate to contact us.  We are here to help!

How to price a home to move

The search for a new home -and subsequent sale of your own- often comes with some sort of time constraint. If you’re buying a new development, you may know going in how long you have to sell your home. In other cases, the timelines can be a bit more dynamic and require some flexibility. Regardless of the situation, there’s one thing sellers can’t stand, and that’s watching their home sit on the market for ages.

Houses that don’t sell can create a lot of problems. On top of the undue stress it brings, it can also create financial hardships through the need for bridge financing, penalties incurred for missed deadlines, multiple mortgage payments, etc. Sometimes a house sitting on the market isn’t the end of the world for a seller. Sometimes it really hurts. Either way, it’s understandably frustrating for everyone when a house sits around without any action on it.

The following article gives a little insight to avoiding the traditional problems with selling your home. Primarily, the one where the seller tends to value it for more than it’s worth, but the buyer wants to feel like they got a great deal. Enjoy reading, and remember to contact Planet Realty if you have any questions! Have a great weekend!

Price Your House to Sell Quickly

Dian Hymer, Inman News, August 20, 2012

If home lacks features of recent comps, it’s time to subtract value

A first-quarter survey of homebuyers and sellers done by HomeGain.com, a real estate services website, revealed that 76 percent of homeowners believe their home is worth more than the list price recommended by their real estate agent.

Homebuyers usually have a better grasp of current market value in the area where they’re looking to buy than do sellers who own and live there. Buyers look at a lot of new listings. They make offers, know what sells quickly and for how much, and what doesn’t and why. HomeGain reported that homebuyers still think sellers are overpricing their homes.

Your home is worth what a buyer will pay for it given current market conditions. This may not be the same as your opinion of what your home will sell for, or what you hope it’s worth. Relying on emotion rather than logic when selecting a list price can lead to disappointing results.

The prime opportunity for selling a home is when it’s new on the market. This is when it is most marketable. Buyers wait for the new listings. Usually, listings receive the most showings and have the busiest open houses during the first couple of weeks they are on the market.

This is the opportunity to show your house off to advantage with a list price that attracts buyers’ attention. Listings that sell today are priced right for the market. Buyers need to feel comfortable that they are getting a good deal.

Buyers won’t overpay if they feel home prices are still declining, and in some areas of the country, they still are. In areas of strong sales, buyers may shy away from multiple-offer situations if they feel the recovery is fragile and that prices may slide further before stabilizing. Even in areas where home sales have been strong in the first half of 2012, local practitioners wonder how long the uptick will last.

HOUSE HUNTING TIP: When selecting a list price, it helps to understand how real estate agents and appraisers establish an expected selling price or price range for your home. They research the recent listing inventory for homes similar to yours that sold. The most recent sales give the best indication of the direction of the market.

They analyze these comparable sales giving more value to your home for attributes that it has that the comparables don’t, like a remodeled kitchen. Value is subtracted from your home for features it lacks when compared to the sold comparables, like an easily accessible, level backyard.

It’s difficult for sellers to step back and take an attitude of detached interest in their home. But it’s essential to do so if you want to sell successfully in this market. For example, your home could actually sell for less, not more, than a comparable sale because you added a swimming pool in an area where most homebuyers would rather have a yard with a generous lawn.

If the comparable sale information suggests that the value of homes like yours is declining, select a list price that undercuts the competition to drive buyers — and hopefully offers — to your home. You can take a more aggressive stance on pricing if the comparables show that prices are moving up.

If there is high demand for homes like yours, you may receive more than one offer. But don’t list too high. It’s better to stay in the range shown by the comparables and expose the house to the market before accepting offers. The market will drive the price up if it’s warranted.

THE CLOSING: Don’t rely on rumors circulating in the neighborhood about how high a home sold. Prices tend to get inflated when passed from one person to another. Select your list price based on hard facts.

Guelph Farmers’ Market Extends Schedule

Fantastic news came in from the city yesterday morning, announcing that they were extending the Wednesday schedule of the Farmers’ Market located downtown.

I don’t know about you, but the opportunities to support local farmers seem relatively few and far between. Bucking the trend, this demonstrates the city’s commitment not only to the farmers, but to the market’s loyal patrons and the downtown vendors who benefit from the increased traffic. This should be a move that helps the city in both the short- and long-term.

“Joanne Shuttleworth, Guelph Mercury, August 9, 2012

Wednesday Farmers’ Market to continue through October

 GUELPH — Shoppers and vendors are so happy with the new Wednesday hours at the Guelph Farmers’ Market that the eight-week pilot will be extended until Oct. 31.

Anna Marie O’Connell, supervisor of parking facilities and the market, said the number of vendors has been steady and the number of shoppers has been growing since the market added Wednesday hours in June.

She said there were 683 shoppers on the first Wednesday and numbers have been as high as 944 since. The number of vendors has held steady — somewhere between 37 and 45 have set up shop each week, she said.

“The customers have asked us to continue and the vendors have found it worth their while,” O’Connell said. “And we think in large part it’s a brand new customer base, so that’s positive too.

“Years ago they tried it and it was horrible — something like six vendors and two shoppers. So we are very pleased to see this turnaround.”

O’Connell said Wednesday hours will not go through the winter, so it will be back to Saturdays-only starting November. But a Wednesday market could operate from May to October next year. She said staff will go over the numbers and the costs to determine if it’s profitable or at least revenue-neutral for the city. She said staff will prepare a report for council, who will ultimately decide whether to continue the Wednesday market next year.

O’Connell said new corn vendors have signed on for August, and apple vendors for September.”

This latest initiative can be bundled right into a number of new ideas that make the downtown core that much livelier. There’s never been a better time to get downtown and see what’s changed. If you don’t find yourself there on a regular basis, take a trip. You might just realize how much you’ve been missing…

Latest Home Numbers for Guelph, It’s a Sellers’ Market

Nothing like numbers rolling in on a Friday- it gives me a chance to provide some weekend food for thought.

It’s hardly shocking these days to see Guelph put up strong numbers in the real estate market. The latest numbers in from the Guelph and District Association of Realtors are no exception. Once again, they paint a formidable image of the strength of Guelph’s housing market, with year-over-year growth across the board.

Sales to-date, as of August 5th, totalled 1297 units within the city. That’s a gain of 69 units, or almost 6 percent from the same period in 2011! And not only are there more homes swapping hands, they’re also selling for more money. Prices have risen almost 5% over the first 7 months of last year. Impressively, the average sale price has risen from $299,500 last year to $313,967. It suggests that not only is the market in Guelph healthy, but it’s also not suffering from the potential bubbling seen elsewhere, where outrageous year-over-year growth seems to be the norm.

Over the past two months, the action on homes that have been listed has been swift as well. Sellers that have elected to list in the typically-slow summer season, have been pleasantly rewarded. 85% of the listings from two months ago have sold, with the average home being on the market for only 29 days! An influx of people to the Guelph area can likely be attributed to the increased demand, suggesting that it may be a great time to consider a move. Don’t expect new listings to be on the market too long if these trends continue!

Enjoy your weekend everyone, see you Monday!

-K

American Housing Market posts first rise in house prices in over 5 years

The period of tumbling home values in the U.S. housing market seems to have come to an end. Finally. For the first time since 2007, real estate statistics site Zillow reported a year-over-year rise in nationwide home values.

From the second quarter of 2011, to the second quarter of 2012, values rose 0.2% to a median value of $149,300. This includes a 2.1% increase from the first quarter of this year.

It’s difficult, however, to create an accurate portrayal of exactly what’s going on in the U.S. housing market based on these numbers alone. Consider that in such a diverse country, trends are still very localized, on a state-by-state, city-by-city basis. For example, values in Phoenix shot up by 12.1% over 2011 numbers, although their median price falls short of the national average at $136,200. Over the same time period, Chicago suffered the greatest loss, watching home values fall by 5.8%, to an average of $158,600.

One of the biggest threats to the American housing markets continues to be foreclosures. With a renewed ability for banks to pursue foreclosures, Zillow’s chief economist Stan Humphries predicts that the rate of foreclosures is likely to increase.

If that happens, then demand for homes will need to increase at a similar rate in order to prevent these home values from falling again. A greater number of foreclosures could saturate the market and ultimately result in too many homes being available at the same time, requiring a decrease in prices across the board to help find buyers.

With weaker than expected job numbers coming out recently, the U.S. economy could be hard-pressed to generate the demand to offset increases in supply. Consider also that those patiently waiting for their properties to grow in value may put their homes on the market, compounding the need for demand and likely mitigating growth.

In spite of the skepticism, Zillow expects that over the next 12 months, the housing market could grow by a relatively flat 1.1%; again considering that some areas may have large growth while others continue to stumble.

With statistics from “Home Values Rise for First Time in 5 Years”, Les Christie, CNNMoney (July 24, 2012)

What do the latest round of mortgage changes mean to you?

As of July 9th, 2011, new mortgage rules have taken effect in Canada. If you knew that, go ahead and give yourself a pat on the back. If not, reading this post is probably going to be worth your time.

The changes brought on by Finance Minister Jim Flaherty contain 4 main elements, all of which we’ll evaluate here. Some of the rules will make straightforward sense, but others might be a little more difficult to understand.

The first, and probably the simplest rule to understand revolves around some of the most expensive houses. With the new changes, you can no longer get an insured mortgage (less than 20% down) on a house with a selling price over $1 million. Well, I’d like to think this makes a lot of sense. Just because you can come up with a 60,000 dollar down payment doesn’t mean you should buy a $1.2 million dollar house. In fact, that kind of down payment is more appropriate for a $300,000 purchase. Regardless, if you’re buying a house for $1 million or more these days, you’re going to have to open the wallet in advance.

Secondly, the newest rules around re-financing mean that you won’t be able to borrow more than 80% against your equity in your home. This of course is down from 85% prior to July. This is certainly something to keep in mind when refinancing and also a consideration to make in anticipation of an eventual rise in interest rates.

Both the 3rd and 4th new rules have been put in place because they apply to a large portion of the buyer pool. Primarily, the new rules limit the amount of strain Canadians can take on.

By reducing the maximum amortization period for a mortgage from 30 years down to 25 years, the minimum monthly payment is certainly slated to increase. However, the changes aren’t trying to make mortgage payments less affordable, but rather to prevent the prospective buyers with the highest-risk of defaulting from entering the market. In a way, the government is ultimately protecting us from ourselves while also saving us thousands -in some cases upwards of $100,000- in interest payments over the length of the mortgage.

This goes hand-in-hand with the capping of both gross debt service and total debt service at 39% and 44% respectively. This ensures that at least 56% of a person’s income is kept free for living expenses and savings; so that the mortgage fund doesn’t fall victim to pirating to cover other expenses. All in all, it makes for a more sound mortgage system by mitigating the risk of default, especially among riskier buyers.