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3 lessons from a cold real estate – Financial Post



The days of bidding wars may be behind us, but what have they taught us?

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The housing market in Canada is cooling down. Home sales between March and April dropped by 12.6%, according to recent data from the Canadian Real Estate Association (CREA).

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While home prices may not have experienced quite as significant a drop, the demand for homes appears to be cooling nationwide. If you’re looking to sell your home, it’s important to consider how the new market will impact you.

Selling in a buyer’s market

When thinking of selling your home, it’s invaluable to think of the process as a business transaction. You have a product, your home, that you’re selling to a customer. It’s important to anticipate the customer’s wants, needs and desires and market your product accordingly.

Bradley Watson, host of Toronto’s #1 Real Estate Podcast and a broker and investor in the Greater Toronto Area, notes “very quickly people forgot that there are markets where you have to actually properly market your home, and stage, and be patient for the right buyer.”

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At the same time, you need to think about why you’re selling your home. Are you selling to downsize your living space? Are you moving out of town? Are you anticipating making a profit on your home?

Because the market has shifted, potential buyers hold more power than they have in recent history. If you’re selling your home to make a profit, you might want to reconsider your motives.

“What we forget and almost want to not not think about is how challenging it will be to purchase on the other side,” says Watson.

A couple of months ago, you might have seen multiple bids on a property and been able to sell well above your asking price. Now, the current landscape is quite different. With interest rates rising, buyers are more cautious in their approach to buying homes.

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“Sellers really have just kind of woken up to the realization that you can’t guarantee a sale,” says Watson.

1. Timing isn’t everything

Timing the real estate market is a gamble. Anticipating market trends is like playing the lottery: yes, there will be winners, but those will be few-and-far between.

If you’re thinking of selling a house, don’t let making a profit be your primary motivation. Sell according to your personal needs, and if you happen to make money, consider it a bonus.

“We have individuals who have committed to purchasing new construction, purchase properties with confidence of selling, who are now kind of struggling,” says Watson. “And we even see people selling, once again, homes for less than they had paid, probably tied back to this affordability challenge.”

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Trying to play the real estate market can lead to further disappointment and frustration, especially if you’ve purchased a new home before selling your current residence.

When the market was hot, Watson saw “the confidence of being able to purchase wasn’t there but the confidence to sell was and that made people do something that is kind of in my mind the no-go zone, which is to buy before you sell without confidence in your finances.”

With the market cooling, houses stay on the market longer and sell for less than before. Buying a new, more expensive house before selling your present one may result in you having to float two mortgages for a time or having the new home’s financing fall through.

“Have a game plan in place on how you’re going to close that property in the event we can’t sell your home,” says Watson.

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Having a clear value of your home and setting the sale price accordingly can save you headaches. As you attempt to sell your home in a cooling market, don’t anticipate getting multiple offers or selling above asking price.

Watson observes that when selling a home, it’s important for sellers to be aware that problems can arise when closing a sale.

“Really understanding the financial strength of the buyer is more important than ever right now. So that can come in the way of having a nice big fat deposit. But also understanding the financial strength”

2. Shift your expectations

If you’re selling your home, you need to consider the changing attitude toward home sales. While the demand is still there, realtors have witnessed a distinct shift in the market.

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No longer are their lineups to view houses and extreme bidding wars on homes. Instead, there seems to be some stabilization.

Sellers are seeing fewer bids, with nowhere near the above-asking prices.

“It’s just the adapting to change,” notes Watson. “Recognizing [that] in a balanced market, you don’t see much price growth, right? So where you maybe saw your neighbour selling $100 or $200 [thousand] in some areas higher… you can’t expect that because that was the product of a very, very tight seller’s market, which we’re not in anymore.”

3. The value of a home inspection

When the market was hot, there wasn’t a lot of room for negotiation when buying a home.

“In the heat of the market, we’re looking at least five or 10 multiple offers and no conditions,” Watson says. “In the hottest areas, we saw financing conditions were gone. Home inspection conditions were pretty much gone.”

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“I think there [were] a lot of properties with issues that were sold and buyers just accepted it.”

Alan Carson, founder and CEO of the home inspection company Caron, Dunlop and Associates, has seen how the housing market affected the rate of home inspections.

“Between COVID-19, low interest rates, panic, bidding wars… the demand for home inspections has stayed high among buyers, but the opportunity to get a home inspection has dropped dramatically with it being a crazy seller’s market,” said Carson.

“Buyers were pressured not to put in any conditions in their offer, including for home inspection,” says Carson.

As a seller, you can use a home inspection to your advantage. Having a home inspection performed before you list your house for sale, and including the report for prospective buyers to see, lets you establish a firm asking price for your home. Because there will be no surprises for the buyer, they have less room to negotiate the final price.

Coming off a hot market, it’s important to consider what a more balanced housing market will look like. As you prepare to sell your home, be sure to keep the buyer of the property in mind, as they will ultimately hold more power than they have in the recent past.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.



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Real Estate Pioneer Unreserved Expands Fully Transparent Listing and Sales Platform to Windsor Market – Yahoo Finance



Company has sold more than $150 million worth of homes in Ottawa, Toronto and Sudbury following $34 million seed funding round

OTTAWA, Ontario, June 30, 2022–(BUSINESS WIRE)–PropTech innovator Unreserved today announced that it has entered the residential real estate market in Windsor, Ontario. Unreserved addresses consumers’ biggest pain points when buying and selling a home by leveraging their proprietary technology that provides 100% transparency to buyers while maximizing the upside for sellers. Investors in the $34M seed round earlier this year – the largest in Canadian history – included CEO Ryan O’Connor, Chairman of the Board and former CEO of Royal Lepage Simon Dean, technology investor Jason Chapnik of Intercap, and numerous real estate professionals.

“Windsor is a key market for us as we expand our presence in Ontario and throughout Canada,” O’Connor says. “Local home buyers and sellers have been hurt by a lack of transparency in the residential real estate market because so many aspects of pricing and transactions are kept hidden from them. Our approach is about openness through technology that empowers everyone to have full information to make informed decisions. This is the future of the real estate industry, and we are proud to bring it to Windsor.”

The process starts with a seller requesting a home appraisal and a team of Unreserved listing experts working with them to confirm their target price and closing dates. As a full-service real-estate company, Unreserved offers construction, staging, marketing, and promotion to help attract qualified buyers with specialized photos and video walkthroughs of a given listing. Open houses and private showings are coordinated with verified buyers to ramp up interest. Home inspection reports and market comparables are provided publicly on the listing page, and, most importantly, everyone can watch a transparent bidding process unfold right in front of them. Unreserved is also offering an industry-first, 12-month warranty on homes sold on its platform.

About Unreserved

The Unreserved technology platform is paving the way for a transparent way to buy and sell homes allowing buyers to bid on homes in a real-time online auction environment, removing blind-bidding and bully offers from the equation. In addition, Unreserved is a full-service auction company, offering staging, marketing, and promotion to attract qualified buyers and interested sellers.

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For Unreserved Media & PR Inquiries, please contact:
Richard Berman
1 (647) 294-8372

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Use Your Name Wisely (#550) – British Columbia Real Estate Association – BCREA



Working in any profession with friends is fun and working in real estate is no exception. It is a business of mentorship, networking and relationship-building where these relationships can turn into tangible benefits in the form of referrals and other business opportunities. However, while the instincts to collaborate and reward your network are well-intentioned, there are limits to how far a REALTOR® should go to help a colleague. A recent BC Financial Services Authority (“BCFSA”) discipline matter highlights that if any party breaches these limits, it may mean consequences for the person who benefited from the assistance and the person who gave it.

In the recent case In the matter of Jaspreet Kaur Gill, BCFSA was addressing events that occurred in 2014. Ms. Gill was first licensed in June 2013, so the conduct occurred while she was new to the profession. In September 2014, another real estate professional obtained an exclusive listing for a property in Williams Lake. That licensee ultimately represented the buyer of that property. Despite not having provided any real estate services to any party, nor having even met any party to the transaction, the brokerage deal sheet listed Ms. Gill as having acted for the seller and having earned an $18,000 listing commission.

Further, the real estate professional completed a record of referral fees indicating that Ms. Gill and the brokerage had received a $45,666 referral fee. That was incorrect; rather, the brokerage had paid the real estate professional a referral fee. Ms. Gill said that the real estate professional told her he would name her individually on the referral record but the referral fee would be paid to someone else. She did not object.

In a second incident in and around November 2014, the same real estate professional entered into a client relationship with two individuals (directors of a corporate property owner). The individual identification information record listed the real estate professional and Ms. Gill as sales representatives. The clients then agreed to trade that property for another rental property. The Contract of Purchase and Sale documenting the trade listed the real estate professional and Ms. Gill as agents for the seller and the buyers as being unrepresented. Despite being aware that the real estate professional was including her name on the contract as an agent and expecting to receive remuneration on the trade, Ms. Gill admitted that she never met nor provided any real estate services to the seller.

An initial conveyancing instruction report named Ms. Gill as the listing agent and the real estate professional as the selling agent, though a later instruction report removed the reference to the other real estate professional. Ms. Gill ultimately received a $24,500 commission through the brokerage despite never having met the buyers or sellers in the transaction. She justified her entitlement to a commission by saying she was providing secretarial and support work to the real estate professional. However, neither she nor the real estate professional could provide any examples of real estate services she had provided to any of the involved clients.

Ms. Gill consented to an order acknowledging she had committed professional misconduct under subsections 35(1) and 35(2) of the Real Estate Services Act, SBC 2004, c 42 (“RESA”), including conduct that was deceptive dealing, contrary to the best interests of the public, undermined public confidence in the real estate profession, and which brought the real estate profession into disrepute. The consent order confirmed that Ms. Gill had intentionally misrepresented material facts by entering into arrangements with the real estate professional to misrepresent her entitlement to a commission on both property transactions despite not having provided any real estate services.

In the end, BCFSA ordered Ms. Gill to pay a discipline penalty of $7,500 and enforcement costs of $1,500. She was also required to complete an ethics in business practice course. While the financial implications of this decision were not extreme, it should be noted that the matter proceeded under the version of s. 43(2) of RESA applicable at the time of the conduct, which set the maximum penalty for a breach at $10,000. That section was amended with effect as of September 30, 2016, to increase the maximum penalty to $250,000, meaning that if the BCFSA were investigating the same conduct today, the potential financial consequences are orders of a much greater magnitude. 

The other real estate professional stated in the investigation that Ms. Gill was a new agent and he just wanted to assist her in earning some income. However, even if the motives appear to be altruistic, REALTORS® should take seriously the representations made about their involvement in a transaction. Even with no apparent impact on the clients, intentional and material misrepresentations will be disciplined to protect the profession’s integrity. Given the significantly increased maximum potential penalties under RESA, there is more incentive than ever to use your name wisely.

To subscribe to receive BCREA publications such as this one, or to update your email address or current subscriptions, click here.

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Real estate: 27 per cent of homeowners accessed credit, survey finds – CTV News



A new survey exposes balance sheet vulnerabilities for some Canadian homeowners amidst rising interest rates.

Released by BNN Bloomberg and RATESDOTCA, the survey found that 27 per cent of homeowners who participated have accessed a home equity line of credit (HELOC). Almost 80 per cent of those participants have used it, and half of them said they have done so in the last two years.

Aside from the pressure of increased interest rates, HELOCs are complicated by new real estate loan guidelines announced by the Office of the Superintendent of Financial Institutions on Tuesday. In late 2023, borrowers will be required to pay principal and interest on combined loans above 65 per cent of the property value.

Prior to these guidelines, HELOCs were an ideal way for homeowners to tap into their home equity during the prior decade’s low interest rates and high home prices, but the survey findings suggest that the Bank of Canada’s recent interest rate increases might have changed the way older Canadians leverage their home value. With HELOCs being based on variable-rate interest, borrowers will be hooked to higher payments.

Since HELOC lenders are able to demand full payment at any time, this can raise concerns for consumers who have not set aside extra money to pay down their HELOC amidst the pressure of rising interest rates.

According to the survey, 58 per cent of respondents said they have an outstanding balance on their HELOC.

Although the majority said they borrowed less than $50,000, 10 per cent said they borrowed more than $100,000. Balances of at least $50,000 were more common for Canadians aged 55 and older.

Of the 1,507 Canadians surveyed, 65 per cent said they were homeowners.

With files from BNN Bloomberg and RATESDOTCA

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