- Berkshire Hathaway HomeServices, the investment conglomerate’s residential real-estate brokerage business, is now the second-largest in the US.
- While many of Warren Buffett’s portfolio companies aren’t associated with the Berkshire moniker, the firm’s real-estate business is named in order to spread its brand.
The massive, Warren Buffett-helmed investment conglomerate moved into second place for 2017, according to a Wall Street Journal report. At the end of last year, the franchise network for Berkshire Hathaway HomeServices included over 365 franchisees in over 1,500 brokerage offices, employing more than 48,000 real estate agents, according to a filing.
The growth is reflective of the firm’s efforts to make the Berkshire Hathaway name more recognizable across the US. It’s worth noting that while the company has historically retained the original names of portfolio companies, the Berkshire moniker is front and center for the brokerage business. That might explain why you’ve been seeing it on an increasing number of signs around your neighborhood.
On a financial basis, Berkshire’s real-estate segment reported earnings of $220 million last year, a slight decline from the previous year. However, the company’s full-year sales surged by 23% on a year-over-year basis, according to its annual report.
One of the most formative events in the history of the HomeServices business came in October 2012, when it acquired a 66.7% interest on one of the largest residential real-estate brokerage franchises in the US.
Berkshire’s home brokerage business will be just one of many businesses discussed at the firm’s annual shareholder meeting, which is scheduled for May 5. Stay tuned to Business Insider on Saturday for updates from the event.
Read the full Wall Street Journal story here.
Richmond-based Chinese real estate company targeted by false posters
An online posting announcing the bankruptcy of a Richmond-based real estate agency is fake news, according to the owner of the company. It has just relocated to Vancouver.
Photos showing posters on the window of Maxcel Westcoast Realty, a real estate company located at 6020 Blundell Rd., began circulating on Chinese social media sites, including one of the biggest Chinese language online forums VanPeople.
These posters, dated Nov. 5, 2019, printed in Chinese characters, stated “the company has closed, which means it doesn’t exist anymore, please stop knocking on my door.”
However, when the Richmond News visited the office on Thursday, all the posters had been removed from the office windows.
According to Kathy Xu, owner and co-founder of Maxcel Westcoast Realty, the online posting isn’t real. The company is still operating and the whole team relocated from Richmond to Vancouver office earlier this week.
Xu isn’t aware of who hung these posters on the window.
A spokesperson from the Real Estate Council of British Columbia (RECBC) also confirmed that the company is licensed and they have just moved to Vancouver.
Tech companies in Edmonton offer new ways to buy, sell homes
Technology is giving Edmonton homeowners more options when it comes to selling their home on the cheap.
This year real estate tech companies — Bode and Honest Door — have launched in Edmonton, while a third company, Purplebricks, formerly Comfree, says its market in Edmonton is growing.
The companies have one thing in common: they allow sellers to list their own homes with a reduced commission fee or no commission fee at all.
“We’ve become really used to and value the tech-based experience, the digital experience in transportation, hospitality, travel, banking, the ability to sell your cars and and your possessions,” said Robert Price, CEO and founder of Bode Canada.
“So this is really taking that content out of what’s now become familiar and valued in the rest of our lives and applying it to your home,” Price said.
Bode Canada launched in Edmonton on Oct. 16. The company allows owners to list their own homes on their website and 20 other real estates sites such as Zillow.com and Realtor.com at no charge.
Owners set up their own showings and when the home sells Bode gets a one-per-cent commission fee.
While no listings or transactions have been made so far in Edmonton, six properties in Calgary have sold through the site, Price said, declining to add how many registered users are on the site in Alberta beyond “hundreds.”
Purplebricks operates a similar business model. The company bought Comfree in July 2018, re-branding in January.
For $800 sellers list their home on Purplebricks. The fee includes help in taking photographs and setting the price. For additional fees, the seller can choose to have a realtor organize showings.
Kim Ewchuk, Western Canada general manager, says Purplebricks gets about 2,000 listings in Alberta each year, with 75 per cent of their business coming out of Edmonton.
Since Purplebricks relaunched in January, it’s seen a 22-per-cent rise in sales in the city, Ewchuk said.
While Realtor.ca currently has more than 5,600 listings in Edmonton, Purplebricks has about 400 on its site.
“We consider ourselves to be a discount brokerage,” she said. “How we’re able to do so is by offering our services at a flat fee model, as opposed to looking at a percentage on the value of a home.”
Adel Elseri, 33, said he saved thousands of dollars in commission fees when he listed his home on Purplebricks in February.
“It’s one of the best experiences I’ve ever had,” he said.
Elseri said he and his wife had about 20 showings and sold their home within 28 days for the asking price of $465,000.
“I feel like … it was in our own control to really show off our house the way we see our house, instead of someone who actually doesn’t live in the area,” Elseri said.
Changes to Honest Door
While Bode and Purplebricks are still registered and regulated as licensed brokerages in Alberta, Honest Door is not.
Honest Door, which launched in June, amasses real estate data in Alberta, giving buyers and sellers information on sold prices, property history, and future growth projections on any and every property.
Founder Dan Belostotsky said users often asked if they can list their property on Honest Door. He is now adding a listing option on the website, to be ready by the end of the year or early 2020.
“At first, we wanted people to take the data into their own hands and really give them an opportunity to do their own research.
“Once they did that, all the comments we’ve received was like, ‘Hey we’d like to now list on a web site’ and there wasn’t any available website for them to do that,” he said.
He said the company might charge people a listing fee of $50 upfront, but no commission fee.
Edmonton real estate agent Ben Oosterveld says typically an agent charges a seven-per-cent commission on the first $100,000 and three per cent on the balance.
Oosterveld said that’s a lot money, leading clients to expect more from agents than they sometimes get.
“That’s why those other companies exist,” he said. “It’s because the value that most, or a lot of people, get from agents are just too low for the price.”
Oosterveld said he provides written feedback reports to clients, outlining why interested buyers didn’t put in offers for their homes and what steps need to be taken to get the sale.
“That’s called value, but a lot of agents don’t do anything like that. There’s a showing, but you don’t get feedback, so why pay?”
And when a sale is made?
“When you get keys to the house that you bought from our team we literally roll out a red carpet. We bring champagne we make it a really big deal.”
Real Estate Group Is Kicking People Out Of Their Homes
We spoke to three Verdun residents who have been fighting against forced evictions. This week, we heard the story of Karine Laviolette and her over one year-long battle against one of the most powerful real-estate development firms in Montreal: LS Capital Group. Laviolette is an elderly woman who has been living on 3e Avenue in Verdun for a few years. Over the past year and a half, Karine and her neighbours say they have been struggling against the LS Capital Group.
LS Capital describes itself as “a real estate asset management investment firm. Our competitive advantage is finding and securing undervalued properties, and through our construction and management experience, we are able to revitalize or develop them to their full market value potential.”
“I first heard about my eviction on the 10th of December. LS Capital Group bought the building on the 1st of November. That same week, they put lockboxes with the tenant’s keys outside the building so that workers can come in and out,” says Karine Laviolette.
She says she has been facing intimidation tactics and has even had unannounced intruders in her home. For Karine and her neighbours, LS Capital is in the business of taking people’s homes away.
“I’m a fighter,” says Laviolette. “They won’t make me leave that easily.”
Intimidation and Confusion
“Before December, they sent us a paper that told me to send my rent checks to their company. When I got my eviction papers, I contested it but my neighbour who was here for 30 years decided to leave. A mother with her son was also evicted,” says Laviolette.
According to Laviolette, many of her neighbours around 2e and 3e Avenues in Verdun are facing pressure from LS Capital Group. They’ve all experienced similar intimidation tactics from LS Captial, she alleges.
“My neighbours on the other side of the street were threatened with eviction and decided to stay but his rent went from around $550 a month to around $1400 because his building was sold after they renovated it.”
Above: The original letter sent by LS Capital announcing the transfer of ownership.
“It’s intentionally confusing. The Regie and LS Capital Group have all these papers you have to sign and it’s not clear which ones you have to sign and where and in what order. Another neighbour of mine signed a wrong paper and they evicted her. She came home one day and everything was locked.”
Laviolette has also had to deal with questionable bank transactions. According to her, one of her rent cheques was deposited with $200 less than what she actually wrote.
“For Karine, it was awful because they told her she was not paying it. Which wasn’t true at all,” says her neighbour Felix-Antoine Carignan. “It took her over a month to get confirmation from the company.”
“LS Groupe doesn’t consider us “renters,” says Laviolette. “They call us ‘doors’ and they have around 200-300 ‘doors.'”
“When they were doing renovations, they left their garbage containers in my parking space behind my apartment. After weeks of loud construction, the Verdun borough inspector realized that they didn’t have work permits,” says Laviolette.
Laviolette tells me that her lease agreement stipulates that she has exclusive access to her parking space, something which wasn’t respected.
Translation: Notice of Major Work Order – All windows, bathroom fixtures, floors, doors and baseboards must be replaced. New paint, ceramic, gyprock, electrical and plumbing lines are required.
Apparently, workers would park wherever they wanted to and would show up to do unnecessary cosmetic renovations despite not having the work permits.
Above: The neighbouring apartment clearly displays a work cease order from the borough authorities.
“It didn’t matter, because the company still sent workers over to the house despite a cease-and-desist order from the borough,” says neighbour Lindsay O’Donnell. “I personally saw a guy who was covered in paint coming in and out of Karine’s house when she’s not home.”
Laviolette says that she doesn’t fear for her safety necessarily, but does fear what could happen to her possessions or that they’ll change the locks on her when she’s out.
“It doesn’t even matter to them if I’m home,” says Karine. “I called the police one evening after two men just entered my house. I wasn’t expecting them, I was just sitting in my living room.”
Frustration and Anger
“It’s a constant stress and you have to be aware of all the small details. We’ve been living like this for a year and a half and we’re fed up,” says Carignan.
Above, from left to right: Karine Laviolette, Lindsay O’Donnell & her daughter, Felix-Antoine Carignan.
According to the residents, LS Capital sends them a seemingly endless stream of papers and contracts that they require you to sign.
“If you want to do repair something in your own apartment, for example, someone will show up and ask you why you’re doing that,” says Laviolette.
“I haven’t left my apartment in almost four months. I’m scared to leave my house because I don’t know what will happen when I’m gone.”
Is What LS Capital Doing Legal?
LS Capital is required by law to notify tenants at least 6 months before any eviction notice. However, the Regie du Logement stipulates that “owners can only evict a tenant when they want to divide up the rental unit, demolish it, enlarge it or change what it is used for,” no matter what.
While it’s no longer on their website, LS Capital Group boasted that they have a “95% tenant removal rate.”
Above: This printout of LS Capital’s website was dated 03/18/2019 and was provided by Karine Laviolette.
“And what’s worse is that we’re legally allowed to stay here. We all signed a lease and have a contract. There’s no legal ground that the LS Capital Group has to forcefully evict people,” says Carignan.
“The law doesn’t fit reality. They can get around it by doing random renovations and then raise the rents.”
“LS Capital Group is one of the worst developers in Montreal,” says O’Donnell, “I can’t give you an exact number, but just on 3rd Avenue, we’re a lot.”
MTL Blog reached out to LS Capital but they declined to comment.
“It has to stop and we have to do something,” says Carignan. “We’re lucky that there’s a movement now to raise awareness about the issue.”
“I’m personally very surprised that they’re been no action and no awareness about this until now,” says Laviolette.
“The city says they want to help with affordable housing but all we hear is promises and no action.”
In part two, we’ll be discussing efforts of tenant advocacy group Verdun, Ensemble Contre la Gentrification. Stay tuned.
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