Quarry Lands Rally

As the signs say: 1960's zoning does not make good planning.

A rally against the idea of 7 highrises full of teensy apartments is happening Sunday at 2:00 pm. If you live anywhere within 10 miles or more of Gerrard & VicPark/Warden you should be there.

UPDATE: Despite cold and threatening weather many hundreds of folk turned out to this well-organized event.

Representatives of all levels of government expressed support for changing the current planned development.

It shouldn't be this hard. The thing was zoned for this sort of density in 1968 when the "vision" (nightmarish, but a vision) was high-density housing overlooking the Scarborough Expressway! There is now no freeway, thank goodness; but nobody got rid of the zoning and so far, nobody seems able to.

For lots more informed information, got to www.gerrardclonmore.com . Join. Participate.

Competition vs. MLS -- Part 2-ish

The real estate section of today's Globe has an article headlined "Under the Gun" It starts off with an example of a couple in court because they got badly screwed around by unscrupulous-sounding agents. Then to the lady in the main photo who has burned through 4 agents who "failed" to sell it. We get a little dose of an agent defending their services, then into a Queen's professor who pretty much slags the current MLS setup. Ouch. Allow me to pull a couple of things out of the article that you may have missed in the whole "agents are useless crooks who are about to get their comeuppance" flavour of the thing.

First of all, the court case. Sounds like the agents failed to disclose "multiple representation" or "dual agency" and failed to disclose a family relationship between an agent and a buyer/seller. If true, nail them.

Or maybe they disclosed but did a poor job (accidentally or on purpose) of explaining and/or the sellers didn't read or pay attention to what they were signing. If true, nail both sides.

In any case, what the hell does a single anecdote of unethical behaviour have to do with the state of the industry? That was rhetorical; the answer is "It doesn't". Every profession has its baddies ... the occasional accountant steals, the occasional lawyer steals or screws up, the occasional financial analyst runs a massive Ponzi scheme. Shouldn't happen but it does.

Next up, the lady who burned through four agents who couldn't sell her house. Sounds like every time she went with one who said he "had clients who were interested" or "had contacts". Four times? We all have contacts and clients. That's not how you pick an agent. At least not four times.

So she decided to sell it herself, thereby supporting the "real estate is messed up and needs to change so that people have more options" theory. Well, she did have an option and she tried it (selling it herself). That didn't work either. Her bottom line: "She is now planning to list with [another] agent" but apparently using different selection criteria.

If you burn through four agents, plus yourself, and are working on number five, this is NOT an indication of systemic flaws in the industry. Even if you are cosmicly incompetent in selecting professional advisors, your house will eventually sell on MLS ... unless ... Unless your market truly stinks (not true here ... this was Calgary, not Detroit) or the house is seriously overpriced (I'm putting my money on this one).

And at the risk of being repetitive, she's about to hire an agent!

Finally, the prof. He says a rival database to MLS could give better information, the industry is protectionist, the consumer should have do-it-yourself choices, etc. But what would he do if selling his house? "I would probably pay full commission for the full service ... I know I would be able to find somebody really really good".

I am not saying our system is perfect. I am not saying that all agents are expert and professional. But here's a summary of this article from one perspective:

A certain number of agents behave badly. A lady in Calgary is learning that selling a home involves more than putting a sign on the lawn, and requires some care in selecting an appropriate representative. And an expert observer who seems to think big changes are needed would use a good traditional approach to selling his own home. Hmm.

P.S. Why is this called "Part 2"? Check it out.

That might work, ... if ...

The Feds have announced some changes. If everyone sees them for what they are -- and what the Feds say they are -- they should be good. They should slow you down if you were about to do something silly. But they shouldn't stop you or seriously restrict you in doing what you want to do in real estate.

The first and major change requires. you to "qualify" for your mortgage at the five-year fixed rate. So you qualify by "pretending" that you are getting a mortgage at say 4.7% (whatever the 5 year rate du jour is). Then you go ahead and grab that juicy 2.5% variable rate.
This is kind of like your government protecting you against yourself. Might make our FoxNews-watching neighbours scream "socialism" and go a little crazy. But might also make you thank them if your variable rate starts up in a year or two.

Next up, is a new limit on the maximum amount you can refinance to. It's still early and I need more details on this one, but here's what I THINK they are up to. You can still go 95% mortgage when you buy a house. But, when your mortgage comes up for renewal, you have to get to at least 10% equity/90% mortgage. Why?
They are trying to encourage building up a safety cushion of equity. Presumably they are also discouraging a few folks who have lots of equity but are tempted to borrow back the whole wad in order to "buy themselves something frilly". For example, say you think it's time to buy some stocks or a snazzy cottage, etc. -- Well, fine, just don't risk absolutely everything on some delusion that interest rates will nudge zero forever and real estate will go endlessly and uninterruptibly up. ("Uninterruptibly"???)

Third is the one that I hope won't turn into one of those things that shows up in the headlines with the explanation continued on page 6. Headline: MINIMUM 20% DOWN"... page 6: "if you are buying a place for speculation/investment/rental income". In other words for 95% of you, it doesn't change anything.

First take. If I screwed it up, you can tell me. Or I'll post clarifications, corrections and apologies later.

Competition vs. MLS ... part 1

So, the government (in the form of the Competition Bureau) wants to open up access to the data on the MLS system which is the property of organized real estate via CREA (Canadian Real Estate Association).

The idea is that the MLS system, built and operated by organized real estate, is the focal point for such a huge percentage of real estate sales in Canada that it is impossible for alternative approaches or systems to establish themselves and compete.

Theoretically, easier and more open access to this data would create lots of options for people to handle much more of the buy/sell process themselves at a much lower financial cost.

I’m going to rattle on for a post or two with some thoughts and perspective that I don’t expect to see very clearly expressed in the media. I might even be right about some of it.

And I’m actually still thinking some of it through. I understand the value of competition and I know that real estate commissions represent a lot of money, and there are probably changes that should be made to the MLS system.

But I think that I’m going to conclude that what the competition folks are after is wrong-headed and will leave homebuyers and sellers with weaker service, more risk, more confusion and will not ultimately save them any money.

So, if this interests you, follow the blog or subscribe or whatever. I’ll try to get at least one piece on this topic up daily for a week or so. And I would love it if you got in on the conversation.

Final thing today … here’s the official Royal LePage thought for the day:
Royal LePage Position
Royal LePage Real Estate Services believes that CREA and the MLS system are important components in Canada's real estate market. It is important to note:

1. The real estate market in Canada is highly competitive, and includes a wide variety of companies with diverse and innovative business models and price structures

2. There are other channels through which buyers and sellers can participate in the market, including online and do-it-yourself options

3. The organized structure and efficient attributes of the Canadian real estate industry are recognized globally, and many emerging markets would like to adopt a similar system.
Consumer protection and trust are the hallmarks of our business, and we will advocate strongly for our business, our partners, and our customers.

I'm back!!!

Time flies. Got a little busy. Then took a holiday. Got busy again, and well ... here we are.
I was determined to kick this off again with a post next week. But the headlines of the last couple of days got my attention.
Which headlines? Well, the Olympics and the Suberbowl stuff are certainly interesting. But for this little corner of the world I think we'll have a go at the "housing bubble" headlines, and the business of the Competition Bureau taking on organized Real Estate.
Stay tuned for a post on each sometime today.

And if you're thinking a newer, large-ish home would be nice but you want to stay in the Beach vicinity and don't want to break the bank, check out our little goodie at www.drop.io/enroutes (MLS E1781422)

By the way, the return of this blog is going to take a modified approach. Its main focus is still our take on the real estate market. It will still be largely non-promotional (except for mention of our new listings and the like). But it's going to be more fun and interesting.

Not that real estate isn't often interesting. But if this means I occasionally can't figure out any way to tie an interesting tidbit to real estate ... it gets posted anyway.

Talk soon.

Thou shalt be efficient.

Thoughts on the proposed mandatory energy audits.

Legislation in the works in Ontario that would require a homeowner to conduct an energy audit before selling their house. “Thou shalt be efficient”. The idea is that the owner does the audit, then does all or most of the suggested improvements to make the home market-attractive. Alternatively, a “poor” audit could lead to a reduced selling price, leaving the buyer with more money to make the improvements.
The vision and intent are admirable. We know the climate change issue is real and that houses are often leaky energy-wasters. We are actually certified NAGAB “Green” agents so we should probably be behind this. But …

• Who’s going to do the audits? There is even now a shortage of good qualified auditors. A sudden demand for a whole whack more audits every year would strain the resource and lead to any number of scams and misuse.

• The timing will be problematic. There is a lot to do to get a home ready for market. The homeowner has repairs, decorating, clutter purging, staging and whatever to do. All sorts of other logistics must be dealt with in the owner’s probably-non-existent “spare time”. All this, plus paperwork, photos, measuring, maybe floorplans and videotours, advertising on a deadline, etc. are being done, usually with a tight target date for “hitting the market”. It’s hard enough already without scheduling an energy audit and then trying to schedule (and pay for) whatever “fixes” seem appropriate to have the audit help, rather than hinder, the sale.

• What about a weak audit? If the seller reduces the price rather than doing the suggested work, will the buyer actually use that money to improve the home’s efficiency?

• What about the overall home inspection? If an energy audit is mandatory, why wouldn’t a whole systems and structural inspection also be required? Not saying I agree with either being legislated, but I have trouble seeing why an owner should be legislated into pointing out that the attic is a little light on insulation when he/she is not required to point out a substandard electrical system, or a weight bearing wall removed in a recent renovation. Which would you be more interested in knowing?

At home-buying time, energy efficiency, I think, is a little like taxes and utility costs are now. It’s good information to know. But they can become distractions from critical “deciding factors” in which home that person decides to buy. Similarly, I think an energy audit would be, for some, a distraction in an already stressful process.

Existing programs allow us to get good rebates and credits on home efficiency improvements. Current owners have access to these grants. New owners have access. It’s good stuff to do. But on balance I don’t think mandating these audits makes sense at this time.

How about an extra incentive or rebate for doing an energy audit and/or improvements, if done within a year of buying? My guess is this would get more done and take away a distraction and largely ineffective requirement from the actual buying/selling process. What do you think?

I Hate My Job.

No, I love my job. But I hate my job TITLE.

I am allowed to call myself a Salesperson or Sales Representative. Lee has taken courses to qualify her to open and operate a real estate office, so she is a “Broker”.

Any of us who do not state somewhere in ANY promotional material that we are one of the above; or are so bold as to instead call ourselves a Consultant, Manager, Facilitator, Guru or some sort of real estate deity … is breaking the rules set out by provincial legislation. You may notice the commonly used "agent" isn't mentioned... not allowed. We've been known to break that rule in the interests of common sense and common usage, but by law it's not right.

Yes, I “sell” my services in order to attract clients. The end of the most active period in a “job” is a “sale”. We certainly produce a wide array of marketing materials to assist in the sale of a home. We work with buyers and sellers to help THEM get a sale. We negotiate on behalf of clients. And so on.

But we cringe at the idea that we sell homes. The implication is that our job is to get a buyer to buy or a seller to accept an offer. It isn’t. Our job is to help a buyer find and acquire the right home for them. Not the first home, or the most expensive home, or the one that pays the highest commission rate. The Buyers buy it.

Our job is to help a seller market their home effectively in order to get the best possible offer for them. Not the first offer, or the one that closes fastest, or the one from our own buyers because then we get more commission. The Sellers sell it.

That's the job: work with clients through the real estate buying/selling process so that they are happy and satisfied at the end. I like it. The title ... not so much.

It's becoming a strange world ... notes on privacy.

Some time ago, privacy legislation made some changes which made the Realtor's life a little trickier in order to protect your privacy. FINTRAC, the people charged with trying to control things like money laundering have now introduced regulations that require us to pry into your privacy !

The privacy legislation severely restricts what we can say about home owners and sales, even though most will become public-record information as soon as the sale closes. For example (technically) if you are curious what your neighbour's house sold for and ask your Realtor, they can't tell you.

The first set of FINTRAC regulation was no big deal. If you wanted to pay a deposit or other amount on a home of $10,000 or more in CASH, we had to report you to the feds. Since we have never had anyone want to do this, it was nothing but a minor change in a clause.

But now (effective June 23, 2008) they got us with a new one.

Now we are required to document the identity of every buyer and seller. That means every buyer/seller will be required to produce a passport, birth certificate, SIN number or equivalent and we will record the information in the deal's files. Federal regulation; gotta do it.

Why?

Clever people, these money launderers. They have been known to produce a wire transfer for, say, a $100,000 deposit on an offer. This money goes into the Broker's trust fund. The offer might be below market value, so it doesn't go. The Broker cuts a cheque back to the unsuccessful buyer for the amount of the deposit transfer. Poof! $100,000 in laundered, clean money.

Sigh. It's a world out there.