Launched November 28, REMAX.ca showcases the most extensive selection of homes listed for sale by RE/MAX
Buying, Selling, Leasing or Investing in real estate is sometimes a complex undertaking. Hiring me, a real estate professional will help save you time and money. steven@maislin.com
Moderation—not correction—on tap for Canadian housing markets in 2013,
Canadian real estate markets demonstrated remarkable resilience in 2012— with home sales up or on par in 65 per cent of major centres—despite considerable headwinds in terms of tighter financing and economic uncertainty abroad. The trend is expected to continue, with home-buying activity propped-up by low interest rates and an improved economic picture in 2013, according to a report released today by RE/MAX.
The RE/MAX Housing Market Outlook 2013 examined trends and developments in 26 major markets across the country. The report found that the number of homes sold is expected to match or exceed 2011 levels in 65 per cent of markets (17/26) in 2012, led by strong activity in Western Canada, including Calgary (up 13.5 per cent) and Regina (eight per cent). Eighty-one per cent (21/26) of markets are set to experience average price increases by year-end 2012, with Regina the country’s frontrunner at eight per cent, followed by Hamilton-Burlington, Greater Toronto, and Fredericton at seven per cent and Saskatoon at 6.5 per cent. The forecast for 2013 shows the upward trend moderating, but values still ahead of 2012 levels in 85 per cent (22/26) of centres. Stability is forecast to characterize Canadian real estate in the new year, with sales above or on par with 2012 levels in 81 per cent (21/26) of markets. Nationally, an estimated 454,000 homes will change hands in 2012, falling one per cent short of the 2011 level of 456,749. Canadian home sales are expected to almost mirror the 2012 performance next year, holding steady at 454,000 units. The average price of a Canadian home is expected to remain stable at $364,000 in 2012—on par with the figure reported in 2011. Values are expected to appreciate nominally in 2013, rising to $366,500, one per cent above year-end 2012 levels.
“Despite all the negativity surrounding residential real estate, the sky is not falling,” says Gurinder Sandhu, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “Home sales have moderated, but remain within healthy levels. Greater optimism is expected to return next year, as the economy marks further improvement. Canadians appear to be reining in their spending, heeding cautionary statements by the country’s financial leaders. We believe that will only serve to shore up the already healthy framework of the Canadian housing market in 2013.” The report found that low interest rates were a major impetus in 2012, fuelling sales of homes across the board. Tight inventory levels also factored into the equation early in the year, causing a flurry of activity in many centres. By midyear, however, the third round of CMHC mortgage tightening had a noticeable impact on housing markets, pushing homeownership beyond the grasp of many first-time buyers.
The RE/MAX Housing Market Outlook Report also identified several regional disparities. Most notable was the pull back in sales activity in Greater Vancouver. A banner 2011 year and a slowdown in investor activity contributed to the trend in 2012. Yet, moderation was more widespread in the east, with half of Ontario and Atlantic Canada markets (8/16) reporting 2012 sales off the 2011 pace. Strength was evident throughout Saskatchewan, Alberta, and Nova Scotia, where exceptionally sound economic fundamentals drove demand. The Prairies also stood out in price appreciation, along with the Atlantic Provinces in 2012, and a repeat is on tap for next year. In 2013, Vancouver will rebound to post the strongest sales gain, while the Quebec markets post the sharpest decrease.
“Looking forward, there are a number of factors on the horizon that will serve to bolster residential activity in 2013,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Canada’s economic performance is expected to show signs of improvement, particularly in the latter half of the year, which should bode well for housing markets across the country. Historically low interest rates will also continue to drive healthy home-buying activity, especially in the move-up segment. Last, but certainly not least, there’s no denying the universal appeal of bricks and mortar. Canadians believe in homeownership. The stability of real estate over the long-term continues to fuel its appeal.” While first-time buyers will continue to have a significant presence in the overall marketplace, they are expected to take a back seat in 2013 in Canada’s largest markets—with move-up buyers the new engine driving home-buying activity. The greatest advance in home sales is expected in Vancouver (12 per cent), Calgary (10 per cent), Halifax (five per cent), Kingston (4.5 per cent) and Saint John (four per cent). The strongest upward momentum in average price in 2013 is forecast for St. John’s (six per cent), Regina (five per cent), Kingston (4.5 per cent), and Halifax (four per cent), followed by Fredericton and Winnipeg at three per cent. More balanced market conditions are expected in 2013 throughout the majority of markets, with supply meeting demand. “The long-term outlook for Canadian real estate remains strong,” says Sylvain Dansereau, Executive Vice President, RE/MAX Quebec. “It has proven so in the past, and it will ring true in the years to come. Canada’s major centres are evolving at a tremendous pace and gaining traction on the world stage. As we look forward, our communities will certainly be more vibrant, more sustainable, while our housing mix focuses on density and diversification. The sheer number of developments planned or underway is staggering. We know the market ebbs and flows—that’s cyclical—but the future for real estate remains quite promising.”
Immigration and population growth will continue to support housing demand moving forward. The Canadian government’s commitment to immigration will hold steady, with the country set to welcome as many as 265,000 immigrants in 2013. The greater focus on economic immigrants is already leading to quicker household formation and homeownership than in years past. These two factors will also support the burgeoning condominium segment—along with Canada’s aging population—while the desire for tangible assets props up the upper-end.
RE/MAX is Canada’s leading real estate organization with over 19,900 sales associates situated throughout its more than 748 independently-owned and operated offices in Canada. The RE/MAX network, now in its 39th year, is a global real estate system operating in 91 countries, with over 6,330 independently-owned offices and 88,983 member sales associates. RE/MAX realtors lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral, and asset management.
The RE/MAX Housing Market Outlook 2013 examined trends and developments in 26 major markets across the country. The report found that the number of homes sold is expected to match or exceed 2011 levels in 65 per cent of markets (17/26) in 2012, led by strong activity in Western Canada, including Calgary (up 13.5 per cent) and Regina (eight per cent). Eighty-one per cent (21/26) of markets are set to experience average price increases by year-end 2012, with Regina the country’s frontrunner at eight per cent, followed by Hamilton-Burlington, Greater Toronto, and Fredericton at seven per cent and Saskatoon at 6.5 per cent. The forecast for 2013 shows the upward trend moderating, but values still ahead of 2012 levels in 85 per cent (22/26) of centres. Stability is forecast to characterize Canadian real estate in the new year, with sales above or on par with 2012 levels in 81 per cent (21/26) of markets. Nationally, an estimated 454,000 homes will change hands in 2012, falling one per cent short of the 2011 level of 456,749. Canadian home sales are expected to almost mirror the 2012 performance next year, holding steady at 454,000 units. The average price of a Canadian home is expected to remain stable at $364,000 in 2012—on par with the figure reported in 2011. Values are expected to appreciate nominally in 2013, rising to $366,500, one per cent above year-end 2012 levels.
“Despite all the negativity surrounding residential real estate, the sky is not falling,” says Gurinder Sandhu, Executive Vice President and Regional Director, RE/MAX Ontario-Atlantic Canada. “Home sales have moderated, but remain within healthy levels. Greater optimism is expected to return next year, as the economy marks further improvement. Canadians appear to be reining in their spending, heeding cautionary statements by the country’s financial leaders. We believe that will only serve to shore up the already healthy framework of the Canadian housing market in 2013.” The report found that low interest rates were a major impetus in 2012, fuelling sales of homes across the board. Tight inventory levels also factored into the equation early in the year, causing a flurry of activity in many centres. By midyear, however, the third round of CMHC mortgage tightening had a noticeable impact on housing markets, pushing homeownership beyond the grasp of many first-time buyers.
The RE/MAX Housing Market Outlook Report also identified several regional disparities. Most notable was the pull back in sales activity in Greater Vancouver. A banner 2011 year and a slowdown in investor activity contributed to the trend in 2012. Yet, moderation was more widespread in the east, with half of Ontario and Atlantic Canada markets (8/16) reporting 2012 sales off the 2011 pace. Strength was evident throughout Saskatchewan, Alberta, and Nova Scotia, where exceptionally sound economic fundamentals drove demand. The Prairies also stood out in price appreciation, along with the Atlantic Provinces in 2012, and a repeat is on tap for next year. In 2013, Vancouver will rebound to post the strongest sales gain, while the Quebec markets post the sharpest decrease.
“Looking forward, there are a number of factors on the horizon that will serve to bolster residential activity in 2013,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Canada’s economic performance is expected to show signs of improvement, particularly in the latter half of the year, which should bode well for housing markets across the country. Historically low interest rates will also continue to drive healthy home-buying activity, especially in the move-up segment. Last, but certainly not least, there’s no denying the universal appeal of bricks and mortar. Canadians believe in homeownership. The stability of real estate over the long-term continues to fuel its appeal.” While first-time buyers will continue to have a significant presence in the overall marketplace, they are expected to take a back seat in 2013 in Canada’s largest markets—with move-up buyers the new engine driving home-buying activity. The greatest advance in home sales is expected in Vancouver (12 per cent), Calgary (10 per cent), Halifax (five per cent), Kingston (4.5 per cent) and Saint John (four per cent). The strongest upward momentum in average price in 2013 is forecast for St. John’s (six per cent), Regina (five per cent), Kingston (4.5 per cent), and Halifax (four per cent), followed by Fredericton and Winnipeg at three per cent. More balanced market conditions are expected in 2013 throughout the majority of markets, with supply meeting demand. “The long-term outlook for Canadian real estate remains strong,” says Sylvain Dansereau, Executive Vice President, RE/MAX Quebec. “It has proven so in the past, and it will ring true in the years to come. Canada’s major centres are evolving at a tremendous pace and gaining traction on the world stage. As we look forward, our communities will certainly be more vibrant, more sustainable, while our housing mix focuses on density and diversification. The sheer number of developments planned or underway is staggering. We know the market ebbs and flows—that’s cyclical—but the future for real estate remains quite promising.”
Immigration and population growth will continue to support housing demand moving forward. The Canadian government’s commitment to immigration will hold steady, with the country set to welcome as many as 265,000 immigrants in 2013. The greater focus on economic immigrants is already leading to quicker household formation and homeownership than in years past. These two factors will also support the burgeoning condominium segment—along with Canada’s aging population—while the desire for tangible assets props up the upper-end.
RE/MAX is Canada’s leading real estate organization with over 19,900 sales associates situated throughout its more than 748 independently-owned and operated offices in Canada. The RE/MAX network, now in its 39th year, is a global real estate system operating in 91 countries, with over 6,330 independently-owned offices and 88,983 member sales associates. RE/MAX realtors lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral, and asset management.
The Pros and Cons of rent-to-own
Here’s how it works:
A landlord rents the home or condominium under a basic home lease. For an extra payment, the tenant receives an option to buy the home at a later date, for a set price. Let’s say the home is worth $250,000. The parties agree the tenant will have the right, but not the obligation, to buy the house in three years for $280,000.
The fee for this right, or option, is usually 2 or 2 ½ per cent of the final price. In this example, 2 percent of $280,000 would be $5,600. Then, each month, the tenant pays an extra fee, say $200, that also is applied to this option price. At the end of the three-year lease term, the tenant has put up close to 5 per cent towards the purchase price option. In this example, it would be close to $13,000.
If the tenant exercises their right to buy, they can use the $13,000 as the down payment and apply for a mortgage to finance the rest of the purchase.
Here are some of the advantages for the tenant:
•You may not have the down payment now, but you will have it at the end of your lease, as a result of the additional payments;
•If your credit is not good, you can improve it by making timely payments of rent;
•You can try out the neighbourhood and if you change your mind later, you can just cancel the option;
•If the market price of this home is more than $280,000 at the end of your lease, you still get to buy it for the same $280,000.
•If the market collapses and the home is worth less than $280,000, you do not have to go through with your purchase.
Here are some disadvantages:
•There is no guarantee that a bank will give you your financing when you exercise your option. You still have to improve your credit score or find someone to co-sign your application;
•If you don’t go ahead with your purchase, you usually have to forfeit the option payment.
Here are some advantages for the landlord:
•Tenants on rent-to-own typically take better care of the property, thinking that they may own it one day;
•Your profit is fixed at the time of the option.
In all cases, it is important that the parties have legal advice. Some agreements state that if your rent is late once, the tenant forfeits the right to buy the home. This needs to be changed so that as long as the tenant cures any default in a timely manner, they do not lose the right to buy. The tenant should also have the title checked to make sure that the correct owner of the home is giving the option.
Landlords need to make sure that the option payment is covered in a separate agreement, and is not included in the lease. If it is included in the lease and then the tenant defaults, if can be harder to evict the tenant from the property. Landlords also need to conduct a thorough credit and background check, to make sure that the tenant looks like they will have the means to make all of the required payments.
Rent to own can work for landlords and tenants if you are properly prepared in advance.
The housing market: How we got here
I was listening to talk radio on my commute to work and the half-hour segment was concerned with renting versus owning. The panellists were the president of the Greater Vancouver Real Estate Board and a producer with the radio station, who happens to be a committed tenant. Quite frankly, as the discussion developed I found myself siding with the tenant.
On the call-in segment of the session, one caller lamented the dearth of assistance programs for first-time buyers. He particularly singled out the IHOP program of the seventies. Now before you start to write to REM’s editor, I know the International House of Pancakes wasn’t supporting homebuyers – but it made for a good laugh. At least in my car. On my commute. Alone.
Presumably he meant the AHOP or Assisted Home Ownership Program created by a federal government that just couldn’t resist jamming housing down the throats of Canadians so we could emulate the USA and become the best housed nation in the world. My advice: Be careful what you wish for.
Whether it was fixed-rate mortgages or subsidized payments, folks lined up to buy because they’d be fools not to. Waiting lists trailed from desk drawers. With five per cent down, in some cases provided by sweat equity, and house prices limited in my community to the mid-20s and then 40s towards the end of the decade, people were counting on equity gain at the end of the five-year term. Didn’t happen.
Sound familiar? Sound like the housing crisis in the USA today? When folks had to relocate for work or lost their job, a glut of housing came on the market and subsequently followed the foreclosure path. Mortgage insurance companies had so much inventory, they were at risk and certainly could have flooded the market. I recall MICC owned most of Fort St. John.
It was not unusual for listing salespersons or bank managers to find house keys dumped through office mail slots. I recall one house stripped of its plumbing and shag carpeting as the departing owners desperately sought to regain something of their equity and exact revenge.
To the survivors, equity gains did come. But timing is everything. Chart 1 shows a summary of average house prices every fourth year in the Comox Valley on Vancouver Island beginning in 1977 at $42,000. By 1981, $82,000.
Then, oops! Nothing like world events and government policies to ruin a plan. Wage and price controls, Trudeau’s National Energy Policy and 21 per cent interest rates followed. By 1985, buyers saw prices drop to $58,000, a 29 per cent decline in price. (Compare that to today’s forecast, courtesy of Royal LePage, of declines in Vancouver of six per cent. Imagine your five per cent equity against that price drop. The phrase ‘underwater’ had not yet been invented.)
But by 1989, prices were off and running again to $80,000. Unfortunately, there wasn’t a bell to signal the bottom – or the top – of the market. Apparently, the time to buy was between 1985 and 1989 because in the next four years prices reached $140,000 in 1993 and then $157,000 in 1997.
But guess what.
Peak housing. And still no bell!
By 2001 the average price in the Comox Valley had slipped to $143,000, a nine per cent decline. Time to buy again? You betcha. The average price soared to $253,000 by 2005 and $337,000 by 2009, more than double in eight years. Today, in 2012, our average price is $353,000 and if you had purchased and stayed in the same home for those 35 years, your equity gain would be a modest 740 per cent. Mind you, the long green shag and canary yellow appliances with matching fixtures are likely a tad shop worn. And the non-slip daisies in the bottom of the tub? Hey, they were kind of cute!
How did this happen? Interest rates, two-income families and divorce.
Matching the rise over time of housing prices was the almost lock-step decline in interest rates. From the double digits of the ’70s and ’80s, decade by decade, rates declined, slipping below 10 per cent in 1995, never looking back, to our posted rate of 4.99 per cent today – and we know significantly lower rates are available.
Pop quiz: If the cost of borrowing is lower, you can borrow (a) more or (b) less? And so we did. At the same time, someone in banking suggested all of spousal income should count towards mortgage qualification. What the heck, the baby was almost walking at 12 months, day care abounded and many spouses returned to work.
Cars, boats, vacation homes and bigger screen TVs followed until one spouse got a little tired of watching Extreme Bass Fishing and suggested the other take a hike. Not together. And they kept the TV. And the house. Not that they didn’t deserve it.
And so we reduced our household size dramatically and needed to build – condominia – and plenty of them. Immigration to a better country and inter-provincial migration following the job markets fuelled local demand. Developers have responded to demand. According to some, that response is now approaching saturation and another decline in prices is likely. Peaks and plateaus, peaks and plateaus. All we know for sure is current prices are likely on a plateau in many areas of Canada. We know it’s flat. What we don’t know is how far it is across.
You can find Marty Douglas on Twitter – http://twitter.com/41yrsrealestate – Facebook and LinkedIn. He is a managing broker for Coast Realty Group, with offices on Vancouver Island, the Discovery and Gulf Islands and the Sunshine Coast of B.C. Marty is a past chair of the Real Estate Errors and Omissions Corporation of B.C., the Real Estate Council of B.C. , the B.C. Real Estate Association and the Vancouver Island Real Estate Board. mdouglas@coastrealty.com.
On the call-in segment of the session, one caller lamented the dearth of assistance programs for first-time buyers. He particularly singled out the IHOP program of the seventies. Now before you start to write to REM’s editor, I know the International House of Pancakes wasn’t supporting homebuyers – but it made for a good laugh. At least in my car. On my commute. Alone.
Presumably he meant the AHOP or Assisted Home Ownership Program created by a federal government that just couldn’t resist jamming housing down the throats of Canadians so we could emulate the USA and become the best housed nation in the world. My advice: Be careful what you wish for.
Whether it was fixed-rate mortgages or subsidized payments, folks lined up to buy because they’d be fools not to. Waiting lists trailed from desk drawers. With five per cent down, in some cases provided by sweat equity, and house prices limited in my community to the mid-20s and then 40s towards the end of the decade, people were counting on equity gain at the end of the five-year term. Didn’t happen.
Sound familiar? Sound like the housing crisis in the USA today? When folks had to relocate for work or lost their job, a glut of housing came on the market and subsequently followed the foreclosure path. Mortgage insurance companies had so much inventory, they were at risk and certainly could have flooded the market. I recall MICC owned most of Fort St. John.
It was not unusual for listing salespersons or bank managers to find house keys dumped through office mail slots. I recall one house stripped of its plumbing and shag carpeting as the departing owners desperately sought to regain something of their equity and exact revenge.
To the survivors, equity gains did come. But timing is everything. Chart 1 shows a summary of average house prices every fourth year in the Comox Valley on Vancouver Island beginning in 1977 at $42,000. By 1981, $82,000.
Then, oops! Nothing like world events and government policies to ruin a plan. Wage and price controls, Trudeau’s National Energy Policy and 21 per cent interest rates followed. By 1985, buyers saw prices drop to $58,000, a 29 per cent decline in price. (Compare that to today’s forecast, courtesy of Royal LePage, of declines in Vancouver of six per cent. Imagine your five per cent equity against that price drop. The phrase ‘underwater’ had not yet been invented.)
But by 1989, prices were off and running again to $80,000. Unfortunately, there wasn’t a bell to signal the bottom – or the top – of the market. Apparently, the time to buy was between 1985 and 1989 because in the next four years prices reached $140,000 in 1993 and then $157,000 in 1997.
But guess what.
Peak housing. And still no bell!
By 2001 the average price in the Comox Valley had slipped to $143,000, a nine per cent decline. Time to buy again? You betcha. The average price soared to $253,000 by 2005 and $337,000 by 2009, more than double in eight years. Today, in 2012, our average price is $353,000 and if you had purchased and stayed in the same home for those 35 years, your equity gain would be a modest 740 per cent. Mind you, the long green shag and canary yellow appliances with matching fixtures are likely a tad shop worn. And the non-slip daisies in the bottom of the tub? Hey, they were kind of cute!
How did this happen? Interest rates, two-income families and divorce.
Matching the rise over time of housing prices was the almost lock-step decline in interest rates. From the double digits of the ’70s and ’80s, decade by decade, rates declined, slipping below 10 per cent in 1995, never looking back, to our posted rate of 4.99 per cent today – and we know significantly lower rates are available.
Pop quiz: If the cost of borrowing is lower, you can borrow (a) more or (b) less? And so we did. At the same time, someone in banking suggested all of spousal income should count towards mortgage qualification. What the heck, the baby was almost walking at 12 months, day care abounded and many spouses returned to work.
Cars, boats, vacation homes and bigger screen TVs followed until one spouse got a little tired of watching Extreme Bass Fishing and suggested the other take a hike. Not together. And they kept the TV. And the house. Not that they didn’t deserve it.
And so we reduced our household size dramatically and needed to build – condominia – and plenty of them. Immigration to a better country and inter-provincial migration following the job markets fuelled local demand. Developers have responded to demand. According to some, that response is now approaching saturation and another decline in prices is likely. Peaks and plateaus, peaks and plateaus. All we know for sure is current prices are likely on a plateau in many areas of Canada. We know it’s flat. What we don’t know is how far it is across.
You can find Marty Douglas on Twitter – http://twitter.com/41yrsrealestate – Facebook and LinkedIn. He is a managing broker for Coast Realty Group, with offices on Vancouver Island, the Discovery and Gulf Islands and the Sunshine Coast of B.C. Marty is a past chair of the Real Estate Errors and Omissions Corporation of B.C., the Real Estate Council of B.C. , the B.C. Real Estate Association and the Vancouver Island Real Estate Board. mdouglas@coastrealty.com.
I just couldn't resist Re/Max
Dear Friends and Family,
On a personal note, I am pleased to announce my move to Re/Max. Re/Max’s position as the top Real Estate Company in Canada/World, its professional staff and image and it’s fabulous relocation service, made my decision to join Re/Max an easy one.
I look forward to assisting you with all of your Real Estate needs and that of your friends and family. With the interest rates continuing to be the lowest in over 40 years, we are enjoying a record-breaking Real Estate market.
If you have any questions about the market, do not hesitate to call me at my new office 416.410.6000 or feel free to e-mail me at steven@maislin.com.
I look forward to negotiating on your behalf in the near future.
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On a personal note, I am pleased to announce my move to Re/Max. Re/Max’s position as the top Real Estate Company in Canada/World, its professional staff and image and it’s fabulous relocation service, made my decision to join Re/Max an easy one.
I look forward to assisting you with all of your Real Estate needs and that of your friends and family. With the interest rates continuing to be the lowest in over 40 years, we are enjoying a record-breaking Real Estate market.
If you have any questions about the market, do not hesitate to call me at my new office 416.410.6000 or feel free to e-mail me at steven@maislin.com.
I look forward to negotiating on your behalf in the near future.
NEWS RELEASE
NEWS RELEASE
GTA REALTORS® Introduce MLS® Home Price Index
GTA REALTORS® Introduce MLS® Home Price Index
TORONTO, February 6, 2012 -- The Toronto Real Estate Board (TREB), Canadian Real Estate Association (CREA) and four other major real estate boards across Canada have developed a new system to measure and provide clarity on home prices and home price growth: the MLS® Home Price Index (MLS® HPI).
FAQ – Consent Agreement with the Commissioner of Competition
1. So what’s different now than before this agreement?
This completes the process with the Bureau before the Competition Tribunal and addresses the Commissioner’s concerns. The Consent Agreement clarifies that Boards and Associations cannot adopt, maintain, or enforce rules to discriminate against mere postings on their Board MLS® Systems or that discriminate against members because they offer mere postings. It was always clear to us (and reflected in current practices) that our rules allowed for many different service models, including mere postings.
2. Can the public put properties directly on Board MLS® Systems?
No. Board MLS® Systems are still member to member services. Home sellers can hire a brokerage to list and sell their property and negotiate the level of service they want from their REALTOR® and the commission or fees they want to pay for that service.
3. As a REALTOR® do I have to accept a mere posting?
No. REALTORS® wishing to offer mere posting services must not be discriminated against on that basis by CREA or Board and Association rules. However, REALTORS® are free to choose the business model that they wish.
4. Do mere postings require an agency relationship?
CREA’s Rules do not require a common law agency relationship. CREA’s Agency Pillar provides that a listing REALTOR®/brokerage must act as agent for the seller to post, amend or remove a property listing in a Board’s MLS® System. Acting “as agent” for the purposes of the Agency Pillar means that the listing REALTOR® must do what is required of them as specified in the agreement between the REALTOR® and his or her client and abide by CREA and Board Rules.
Whether or not an agency relationship is formed between a listing REALTOR® providing a mere posting service and his or her seller under applicable provincial real estate legislation must be determined on a province-by-province basis. Common law may also impact whether or not an agency relationship is formed between a listing REALTOR® providing a mere posting service and his/her seller, depending on the agreement between them. The Consent Agreement has no bearing on whether or not an agency relationship is formed between a listing REALTOR® and his or her seller.
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5. How are FINTRAC obligations impacted by a mere posting?
CREA has been in consultation with FINTRAC regarding mere postings and compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing (PCMLTF) legislation. CREA provided FINTRAC with a copy of the Ontario Real Estate Association (OREA) standard listing contract as an example of the type of agreement that listing agents enter into, even when providing mere postings. FINTRAC has taken the position that any broker “who lists a property under the OREA listing agreement acts as an agent in respect of the purchase or sale of real estate and is, therefore, subject to the PCMLTFA and associated regulations”. CREA assumes this conclusion applies to all mere posters that enter into a listing agreement with a seller, not just those using the OREA form.
This means that all members, including mere posters, must comply with the obligations of real estate agents and brokers set out in the PCMLTF Act and Regulations. It will be up to brokers that offer mere posting services to ensure that they comply with the reporting and record keeping obligations. For example, if the broker or salesperson will not be involved with offers or closing, which is presumably when most REALTORS® complete their records, they would have to ensure they get the correct forms filled out when they accept the listing. CREA will be confirming with FINTRAC that this interpretation of their answer is correct.
6. Are mere postings exempt from other obligations?
All MLS® listings including mere postings must comply with CREA’s Three Pillars and the Interpretations. This means that listing REALTORS® that take mere postings must:
offer compensation for the cooperative selling of the property;
be available to provide professional advice and counsel to the seller on all offers and counter offers unless otherwise directed by the seller in writing;
take responsibility for the accuracy of the information submitted for inclusion in a Board’s MLS® System;
specify in the REALTOR® remarks if the seller has reserved the right to sell the property himself/herself in the MLS® listing (SRR listing).
Further, listing REALTORS® that take mere postings must also comply with all Board/Association Rules for the efficient operation of a Board’s MLS® System (for example, be responsible for reporting sales, etc.). As well, all mere posting business models must comply with the applicable provincial real estate legislation and any other provincial or federal legislation.
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7. Are Brokerages required to offer mere posting services?
No. CREA does not tell its members how to run their businesses and the Consent Agreement does not obligate Brokers to offer mere posting services. The Consent Agreement simply specifies that Board and Association rules cannot prevent or discriminate against mere posting business models.
8. How will buying agents be compensated in mere posting transactions? Will potential buyers have to ask their banks to give them a higher mortgage to allow for compensating their agent?
CREA does not tell its members how to run their businesses. A buyer’s agent with a client that is interested in a mere posting might choose to have the client enter into a buyer’s agent agreement that addresses compensation in the event that the seller does not pay a sufficient commission (if buyer agent agreements are not already required by law). Alternatively, the buyer’s agent may want to inquire whether the seller will offer to pay a cooperating commission directly to the buyer’s agent.
9. Can an agent sell sold information to individuals who want to sell their own home?
The Privacy Commissioner has advised that sold prices may constitute personal information for the purposes of the Personal Information Protection and Electronic Documents Act (PIPEDA). This means that sold prices cannot be disclosed unless the seller, and perhaps the buyer, has consented to the disclosure of their personal information for that purpose. Some listing agreements require sellers to consent to the disclosure of a sold price to enable REALTORS® to conduct comparative market analyses, but these consents would likely not extend to disclosure of sold information to other potential sellers.
Therefore, it seems that REALTORS® in provinces where PIPEDA applies do not have the proper consents necessary to sell sold information to potential sellers. In provinces where PIPEDA does not apply, REALTORS® would need to determine if they have the proper consents necessary to sell sold information under the provincial privacy legislation.
Further, Boards and Associations may have Rules regarding authorized use of information in their MLS® System database. Selling sold information to potential sellers may not constitute authorized use of MLS® information pursuant to Board/Association Rules.
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10. Please describe what is, and isn’t, allowed in the remarks section of a mere posting.
Generally, there are two different remarks sections of MLS® listings: the REALTOR® only (non-public) remarks section and the general (public) remarks section of MLS® listings, which is often the remarks section that appears as the General Description on REALTOR.ca.
In order to maintain the integrity of Boards’ MLS® Systems (which are member-to-member systems that have been built using the resources of CREA members), while at the same time maintaining the ability of REALTORS® to provide a wide and diverse range of products and service offerings, CREA’s Rules were amended to make clear that the words “visit the REALTOR® website to obtain more information” (or in the alternative the REALTOR® brokerage website) may be included the general (public) remarks section of an MLS® listing and on REALTOR.ca. Consumers can then click on a direct link to the REALTOR® website that appears on REALTOR.ca.
CREA’s Rules provide that the seller’s contact information shall not appear on REALTOR.ca or in the general (public) remarks section of a listing on a Board/Association’s MLS® System. Further, comments such as “visit the REALTOR® website for seller contact information” would not be permissible as these comments specify the nature of the additional information.
CREA’s Rules further provide that where the seller directs the listing REALTOR® in writing to do so, the seller’s contact information may appear in the REALTOR® only remarks (non-public) section of a listing on a Board/Association’s MLS® System.
Boards and Associations also have Rules regarding what can and cannot appear in the remarks sections of MLS® listings, which listing REALTORS® must abide by. For example, a Board may have a Rule that states that only property-related information (i.e., no personal promotion) is allowed in the public remarks section of a listing.
11. What are the obligations of a Broker to the public if they only post a property on a Board/Association’s MLS® System?
Any obligation of a Broker to the public would be found in legislation (e.g., provincial licensing legislation, the Competition Act, privacy legislation, etc.), codes of ethics such as the REALTOR® Code, and possibly common law.
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12. What is the Brokerage liability regarding accuracy of information?
Listing REALTORS® are responsible for the accuracy of the information that he or she provides to a Board’s MLS® System. However, this does not mean they have to provide an absolute warranty for the accuracy of the information in all circumstances. It means they have to take responsibility for the accuracy of the information and they cannot shift responsibility to the buyer. If a listing REALTOR® is not willing to take responsibility and be accountable for the accuracy of the information, then the listing should not be taken as an MLS® listing. Inaccurate information decreases the value of a Board’s MLS® System by undermining its reliability.
13. How do CREA’s Rules apply to mere postings that are advertised by the listing REALTOR® or seller on private websites?
Sellers and listing REALTORS® are free to advertise mere postings (or any postings) on any website as long as the advertisement complies with regulatory requirements and CREA’s trademarks are used in an authorized manner. Sellers are not licensed to use CREA’s trademarks in marketing the property. Given that SRRs and “mere postings” may be submitted to a Board’s MLS® System, and given that these types of listings permit sellers to try and sell their property themselves, some sellers may try to use CREA’s trademarks on their private for-sale signage and advertising. That is absolutely prohibited. It would be an infringement of our trademarks to do so.
The accuracy requirement for the listing data in CREA’s Interpretations applies to listings placed on Boards’ MLS® Systems. That requirement ties into the member-to-member obligations inherent in the operation of MLS® Systems and not to information placed by a seller on a private site, although reliance on inaccurate data in any location may give rise to claims for damages against the person/organization who so advertises.
14. How will the Brokerage be protected from errors, omissions or misinterpretation between the Buyer and Seller?
CREA’s Rules do not address errors and omissions. Questions about liability should be directed to a Broker’s own counsel or Regulator.
CREA’s Rules do, however, require listing REALTORS® to disclose whether a seller has reserved the right to sell the property himself/herself (SRR listing). Disclosing the fact that a listing is an SRR listing in the Board’s MLS® System enables buyer’s agents to assess any risk that may exist and make informed decisions when working on those listings. For example, a
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buyer’s agent with a client that is interested in an SRR listing might choose to have their client enter into a buyer’s agent agreement that addresses compensation in the event that the seller does not pay a sufficient commission or other remuneration to a cooperating selling office. It is up to the buyer’s agent and the buyer to agree on how to proceed.
15. How are we going to continue to report sales when we will, in a lot of cases, not be involved in the sale? For that matter, how will we know when to report a property as pending?
In order to ensure the accuracy and integrity of information in a Board’s MLS® System, Board rules should include a requirement that members report the sale of any property listed by the member on a Board's MLS® System. It is up to the REALTOR® to make appropriate arrangements with clients to ensure that the REALTOR® can comply with Board Rules requiring reporting of sales, for example, by ensuring that a seller who has the right to sell privately is contractually obliged to report the sale price to the listing REALTOR® when sold.
16. Whose sign goes on the lawn when listed? What if it is an MLS® listing, is advertising limited to the Listing Brokerage or can the Seller use FSBO signage? Can an MLS® sticker be placed on a FSBO sign? If not, are we not breaking another Rule that says if a property is listed on the MLS® System, the signage must indicate that fact?
Whose “for-sale” sign goes on a seller’s lawn and whether or not the listing REALTOR® is to be involved in marketing a property is to be determined by agreement between the listing REALTOR® and the seller. That said, if the seller is going to market the property by themselves, the seller is not allowed to use CREA’s trademarks in that marketing. Only authorized Board/Association members can use MLS® trademarks on their own signage.
17. In the past, listing agents presented offers to the vendors. I would expect that with a reduced service listing, this may not be the case... so how is this handled? Is the MLS® Info sheet going to give instructions regarding presentation of offers?
Whether or not a listing REALTOR® will be involved in the offer process depends on the agreement between the listing REALTOR® and his or her client. For example, a seller may agree with a listing REALTOR® that all offers are to be sent directly to the seller, and this may be specified in the REALTOR® (non-public) remarks section of an MLS® listing. How the offer process will be handled will depend on the agreement between the listing REALTOR® and the seller, Board rules, and applicable regulatory requirements.
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18. Are commissions now to be negotiated?
Consumers can, and always have been able to, negotiate the level of service they want and the fees or commission they want to pay for that service. CREA members offer a wide variety of services and add value to real estate transactions in whatever fashion they have agreed with their clients. Consumers choose with whom they want to work and negotiate the terms (service and fees) of the relationship with their REALTOR®.
19. Are listings on ICX impacted by the Consent Order?
Any listing which appears on a Board’s MLS® System for residential real estate is subject to the operating rules of the Board. Therefore, as a practical matter, in an indirect fashion commercial property on such an MLS ® System may be indirectly impacted by the Consent Order. Commercial transactions that are not on a Board’s MLS® System ( i.e., are solely on ICX) are not affected by the Consent Agreement.
20. Recent media reports indicate that the Bureau has launched a further investigation into the industry with regard to MLS® data.
CREA is not aware of any such investigation. We look forward to a return to a constructive relationship with the Bureau.
This completes the process with the Bureau before the Competition Tribunal and addresses the Commissioner’s concerns. The Consent Agreement clarifies that Boards and Associations cannot adopt, maintain, or enforce rules to discriminate against mere postings on their Board MLS® Systems or that discriminate against members because they offer mere postings. It was always clear to us (and reflected in current practices) that our rules allowed for many different service models, including mere postings.
2. Can the public put properties directly on Board MLS® Systems?
No. Board MLS® Systems are still member to member services. Home sellers can hire a brokerage to list and sell their property and negotiate the level of service they want from their REALTOR® and the commission or fees they want to pay for that service.
3. As a REALTOR® do I have to accept a mere posting?
No. REALTORS® wishing to offer mere posting services must not be discriminated against on that basis by CREA or Board and Association rules. However, REALTORS® are free to choose the business model that they wish.
4. Do mere postings require an agency relationship?
CREA’s Rules do not require a common law agency relationship. CREA’s Agency Pillar provides that a listing REALTOR®/brokerage must act as agent for the seller to post, amend or remove a property listing in a Board’s MLS® System. Acting “as agent” for the purposes of the Agency Pillar means that the listing REALTOR® must do what is required of them as specified in the agreement between the REALTOR® and his or her client and abide by CREA and Board Rules.
Whether or not an agency relationship is formed between a listing REALTOR® providing a mere posting service and his or her seller under applicable provincial real estate legislation must be determined on a province-by-province basis. Common law may also impact whether or not an agency relationship is formed between a listing REALTOR® providing a mere posting service and his/her seller, depending on the agreement between them. The Consent Agreement has no bearing on whether or not an agency relationship is formed between a listing REALTOR® and his or her seller.
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5. How are FINTRAC obligations impacted by a mere posting?
CREA has been in consultation with FINTRAC regarding mere postings and compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing (PCMLTF) legislation. CREA provided FINTRAC with a copy of the Ontario Real Estate Association (OREA) standard listing contract as an example of the type of agreement that listing agents enter into, even when providing mere postings. FINTRAC has taken the position that any broker “who lists a property under the OREA listing agreement acts as an agent in respect of the purchase or sale of real estate and is, therefore, subject to the PCMLTFA and associated regulations”. CREA assumes this conclusion applies to all mere posters that enter into a listing agreement with a seller, not just those using the OREA form.
This means that all members, including mere posters, must comply with the obligations of real estate agents and brokers set out in the PCMLTF Act and Regulations. It will be up to brokers that offer mere posting services to ensure that they comply with the reporting and record keeping obligations. For example, if the broker or salesperson will not be involved with offers or closing, which is presumably when most REALTORS® complete their records, they would have to ensure they get the correct forms filled out when they accept the listing. CREA will be confirming with FINTRAC that this interpretation of their answer is correct.
6. Are mere postings exempt from other obligations?
All MLS® listings including mere postings must comply with CREA’s Three Pillars and the Interpretations. This means that listing REALTORS® that take mere postings must:
offer compensation for the cooperative selling of the property;
be available to provide professional advice and counsel to the seller on all offers and counter offers unless otherwise directed by the seller in writing;
take responsibility for the accuracy of the information submitted for inclusion in a Board’s MLS® System;
specify in the REALTOR® remarks if the seller has reserved the right to sell the property himself/herself in the MLS® listing (SRR listing).
Further, listing REALTORS® that take mere postings must also comply with all Board/Association Rules for the efficient operation of a Board’s MLS® System (for example, be responsible for reporting sales, etc.). As well, all mere posting business models must comply with the applicable provincial real estate legislation and any other provincial or federal legislation.
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7. Are Brokerages required to offer mere posting services?
No. CREA does not tell its members how to run their businesses and the Consent Agreement does not obligate Brokers to offer mere posting services. The Consent Agreement simply specifies that Board and Association rules cannot prevent or discriminate against mere posting business models.
8. How will buying agents be compensated in mere posting transactions? Will potential buyers have to ask their banks to give them a higher mortgage to allow for compensating their agent?
CREA does not tell its members how to run their businesses. A buyer’s agent with a client that is interested in a mere posting might choose to have the client enter into a buyer’s agent agreement that addresses compensation in the event that the seller does not pay a sufficient commission (if buyer agent agreements are not already required by law). Alternatively, the buyer’s agent may want to inquire whether the seller will offer to pay a cooperating commission directly to the buyer’s agent.
9. Can an agent sell sold information to individuals who want to sell their own home?
The Privacy Commissioner has advised that sold prices may constitute personal information for the purposes of the Personal Information Protection and Electronic Documents Act (PIPEDA). This means that sold prices cannot be disclosed unless the seller, and perhaps the buyer, has consented to the disclosure of their personal information for that purpose. Some listing agreements require sellers to consent to the disclosure of a sold price to enable REALTORS® to conduct comparative market analyses, but these consents would likely not extend to disclosure of sold information to other potential sellers.
Therefore, it seems that REALTORS® in provinces where PIPEDA applies do not have the proper consents necessary to sell sold information to potential sellers. In provinces where PIPEDA does not apply, REALTORS® would need to determine if they have the proper consents necessary to sell sold information under the provincial privacy legislation.
Further, Boards and Associations may have Rules regarding authorized use of information in their MLS® System database. Selling sold information to potential sellers may not constitute authorized use of MLS® information pursuant to Board/Association Rules.
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10. Please describe what is, and isn’t, allowed in the remarks section of a mere posting.
Generally, there are two different remarks sections of MLS® listings: the REALTOR® only (non-public) remarks section and the general (public) remarks section of MLS® listings, which is often the remarks section that appears as the General Description on REALTOR.ca.
In order to maintain the integrity of Boards’ MLS® Systems (which are member-to-member systems that have been built using the resources of CREA members), while at the same time maintaining the ability of REALTORS® to provide a wide and diverse range of products and service offerings, CREA’s Rules were amended to make clear that the words “visit the REALTOR® website to obtain more information” (or in the alternative the REALTOR® brokerage website) may be included the general (public) remarks section of an MLS® listing and on REALTOR.ca. Consumers can then click on a direct link to the REALTOR® website that appears on REALTOR.ca.
CREA’s Rules provide that the seller’s contact information shall not appear on REALTOR.ca or in the general (public) remarks section of a listing on a Board/Association’s MLS® System. Further, comments such as “visit the REALTOR® website for seller contact information” would not be permissible as these comments specify the nature of the additional information.
CREA’s Rules further provide that where the seller directs the listing REALTOR® in writing to do so, the seller’s contact information may appear in the REALTOR® only remarks (non-public) section of a listing on a Board/Association’s MLS® System.
Boards and Associations also have Rules regarding what can and cannot appear in the remarks sections of MLS® listings, which listing REALTORS® must abide by. For example, a Board may have a Rule that states that only property-related information (i.e., no personal promotion) is allowed in the public remarks section of a listing.
11. What are the obligations of a Broker to the public if they only post a property on a Board/Association’s MLS® System?
Any obligation of a Broker to the public would be found in legislation (e.g., provincial licensing legislation, the Competition Act, privacy legislation, etc.), codes of ethics such as the REALTOR® Code, and possibly common law.
5
12. What is the Brokerage liability regarding accuracy of information?
Listing REALTORS® are responsible for the accuracy of the information that he or she provides to a Board’s MLS® System. However, this does not mean they have to provide an absolute warranty for the accuracy of the information in all circumstances. It means they have to take responsibility for the accuracy of the information and they cannot shift responsibility to the buyer. If a listing REALTOR® is not willing to take responsibility and be accountable for the accuracy of the information, then the listing should not be taken as an MLS® listing. Inaccurate information decreases the value of a Board’s MLS® System by undermining its reliability.
13. How do CREA’s Rules apply to mere postings that are advertised by the listing REALTOR® or seller on private websites?
Sellers and listing REALTORS® are free to advertise mere postings (or any postings) on any website as long as the advertisement complies with regulatory requirements and CREA’s trademarks are used in an authorized manner. Sellers are not licensed to use CREA’s trademarks in marketing the property. Given that SRRs and “mere postings” may be submitted to a Board’s MLS® System, and given that these types of listings permit sellers to try and sell their property themselves, some sellers may try to use CREA’s trademarks on their private for-sale signage and advertising. That is absolutely prohibited. It would be an infringement of our trademarks to do so.
The accuracy requirement for the listing data in CREA’s Interpretations applies to listings placed on Boards’ MLS® Systems. That requirement ties into the member-to-member obligations inherent in the operation of MLS® Systems and not to information placed by a seller on a private site, although reliance on inaccurate data in any location may give rise to claims for damages against the person/organization who so advertises.
14. How will the Brokerage be protected from errors, omissions or misinterpretation between the Buyer and Seller?
CREA’s Rules do not address errors and omissions. Questions about liability should be directed to a Broker’s own counsel or Regulator.
CREA’s Rules do, however, require listing REALTORS® to disclose whether a seller has reserved the right to sell the property himself/herself (SRR listing). Disclosing the fact that a listing is an SRR listing in the Board’s MLS® System enables buyer’s agents to assess any risk that may exist and make informed decisions when working on those listings. For example, a
6
buyer’s agent with a client that is interested in an SRR listing might choose to have their client enter into a buyer’s agent agreement that addresses compensation in the event that the seller does not pay a sufficient commission or other remuneration to a cooperating selling office. It is up to the buyer’s agent and the buyer to agree on how to proceed.
15. How are we going to continue to report sales when we will, in a lot of cases, not be involved in the sale? For that matter, how will we know when to report a property as pending?
In order to ensure the accuracy and integrity of information in a Board’s MLS® System, Board rules should include a requirement that members report the sale of any property listed by the member on a Board's MLS® System. It is up to the REALTOR® to make appropriate arrangements with clients to ensure that the REALTOR® can comply with Board Rules requiring reporting of sales, for example, by ensuring that a seller who has the right to sell privately is contractually obliged to report the sale price to the listing REALTOR® when sold.
16. Whose sign goes on the lawn when listed? What if it is an MLS® listing, is advertising limited to the Listing Brokerage or can the Seller use FSBO signage? Can an MLS® sticker be placed on a FSBO sign? If not, are we not breaking another Rule that says if a property is listed on the MLS® System, the signage must indicate that fact?
Whose “for-sale” sign goes on a seller’s lawn and whether or not the listing REALTOR® is to be involved in marketing a property is to be determined by agreement between the listing REALTOR® and the seller. That said, if the seller is going to market the property by themselves, the seller is not allowed to use CREA’s trademarks in that marketing. Only authorized Board/Association members can use MLS® trademarks on their own signage.
17. In the past, listing agents presented offers to the vendors. I would expect that with a reduced service listing, this may not be the case... so how is this handled? Is the MLS® Info sheet going to give instructions regarding presentation of offers?
Whether or not a listing REALTOR® will be involved in the offer process depends on the agreement between the listing REALTOR® and his or her client. For example, a seller may agree with a listing REALTOR® that all offers are to be sent directly to the seller, and this may be specified in the REALTOR® (non-public) remarks section of an MLS® listing. How the offer process will be handled will depend on the agreement between the listing REALTOR® and the seller, Board rules, and applicable regulatory requirements.
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18. Are commissions now to be negotiated?
Consumers can, and always have been able to, negotiate the level of service they want and the fees or commission they want to pay for that service. CREA members offer a wide variety of services and add value to real estate transactions in whatever fashion they have agreed with their clients. Consumers choose with whom they want to work and negotiate the terms (service and fees) of the relationship with their REALTOR®.
19. Are listings on ICX impacted by the Consent Order?
Any listing which appears on a Board’s MLS® System for residential real estate is subject to the operating rules of the Board. Therefore, as a practical matter, in an indirect fashion commercial property on such an MLS ® System may be indirectly impacted by the Consent Order. Commercial transactions that are not on a Board’s MLS® System ( i.e., are solely on ICX) are not affected by the Consent Agreement.
20. Recent media reports indicate that the Bureau has launched a further investigation into the industry with regard to MLS® data.
CREA is not aware of any such investigation. We look forward to a return to a constructive relationship with the Bureau.
To Buy or Sell First – That is the Question
To Buy or Sell First – That is the Question
The decision of whether to buy or sell a home first is an age-old dilemma that every purchaser already owning a home faces. Making the wrong decision can be disastrous at worst and complicated at best. There are a variety of factors that must be carefully considered so the right decision ultimately will be made. This column considers this issue and provides guidelines to help purchasers make the choice that best suits their circumstances.
If you currently own your house, townhouse or condominium and are considering the sale of that property and the purchase of a new home, you first need to consider whether you will sell your existing property before buying your new one or vice versa. This is a strategic move and a good place to start in your decision making process is with a real estate professional. A good real estate agent is able to assess market conditions, including the supply of and demand for real estate in the areas where you are looking to buy and sell.
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