Ottawa residents may have noticed a new way to buy and sell residential properties: online real estate auction sales. Online real estate auction sale companies aim to disrupt the traditional buying and selling process by charging less than the standard real estate agent commission and by allowing potential buyers, or “bidders”, to see what other interested buyers are offering for the property. While the option to auction may seem appealing, interested parties should be aware of the risks.
While the perceived perks of listing or bidding on a property on an auction site may be attractive, buyers and sellers should be aware that real estate auction sale sites are not currently regulated. In contrast, real estate agents and brokers are regulated under the Real Estate and Business Brokers Act (the “Act”) which is enforced by the Real Estate Council of Ontario (“RECO”). Unlike auction sale websites, prospective real estate agents must complete courses to become licensed. Once licensed, they must undertake annual continuing education and be employed by a brokerage overseen by RECO.
Further, RECO ensures that all real estate brokers and agents are insured and that they follow a Code of Ethics. RECO enforces the Act and the Code of Ethics, such that real estate agents who fail to comply are subject to disciplinary measures. These additional protections are not available when buyers and sellers engage a real estate auction sale website.
While auction sale websites may bill themselves as a transparent alternative to the traditional buying and selling process, this transparency does not extend to the auction companies themselves. As they are unregulated, buyers must trust that auction sites are being run responsibly and ethically, without being able to rely on enforcement by RECO if they are not.
Finally, buyers and sellers have limited recourse if something goes wrong. Real estate auction sales are essentially private agreements and so the primary recourse would be through the Court. However, success in Court may be limited because, often, the agreements prepared by auction sale websites contain limitation of liability and indemnity clauses which protect the website to the detriment of the buyer and seller.
Considering the foregoing, real estate auction companies evoke the timeless phrase: “buyer beware”. Buyers and sellers should always consult a real estate lawyer prior to entering into any agreement of purchase and sale. However, this step becomes even more important if you are considering engaging an auction company rather than working with a licensed agent. The members of Soloway Wright’s Real Estate and Development Group are here to answer any real estate law or real estate development questions that you may have and to help guide you through the buying and selling process.
Author Bio: Vanessa Carment is an Associate practising in Soloway Wright LLP’s Real Estate and Development, Commercial Leasing, and Condominium Law groups. Vanessa’s practice consists of all aspects of real estate transactions, including purchases, sales, and financing. She also regularly advises condominium corporation boards on a wide range of condominium matters and is involved in commercial leasing work for both landlords and tenants.
Learn more about Soloway Wright LLP here.
Real estate markets slow in most nearby communities – Calgary Herald
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Slowing demand and rising supply in outlying communities like Airdrie have set in along with cooler temperatures of late summer, recent data shows.
Calgary Real Estate Board statistics from last month show sales falling year over year in most communities while supply is rising.
“In all those markets, we’ve seen improvements in inventory,” says Ann-Marie Lurie, chief economist with CREB.
“Still these markets remain quite tight, but we are seeing some price adjustments and that’s because they came up so high during the pandemic.”
Airdrie is the largest and most in-demand market with the highest sales last month, 169 transactions, down almost eight per cent year over year. Still, the community saw inventory rise more than 10 per cent with now more than 1.69 months of supply, an increase of nearly 20 per cent from last year.
Other communities have also seen sales fall and supply rise. These include Cochrane, which had 75 sales, down about 17 per cent from August last year. Its supply is now more than two months, up about 26 per cent year over year.
Okotoks had 53 sales in August, down about 19 per cent year over year while supply grew to more than 1.8 months.
Despite falling demand and growing supply, prices still grew year over year in these communities. The benchmark price in Airdrie increased almost 19 per cent to $493,500. In Cochrane, the benchmark price grew by more than 16 per cent to $517,400 while the benchmark reached $549,300 in Okotoks, also an increase of more than 16 per cent.
Chestermere saw the biggest drop in sales year over year at more than 48 per cent.
Only High River experienced a slight increase in activity with sales last month up 2.5 per cent versus the same span last year.
Spotlight: Making sense of the current real estate market in Newmarket – NewmarketToday.ca
Buying a home at any time is a huge undertaking. It requires a lot of preparation, time and access to expertise.
Homeowners—and those who wish to become one for the first time—have it even harder right now, with conditions seeming to change from month to month.
REALTOR® Dave Starr specializes in home buying and selling in Newmarket and the surrounding areas. With over 35 years of experience in the real estate industry, he is happy to share what he’s learned with others.
Slowing things down
So how would he describe the current state of the market in Newmarket? “It’s finally more normal and realistic,” he says. “A prospective buyer has a little more breathing room to make sure that their financing is in place and they can also consider a home inspection.”
A seller will benefit by working with a more seasoned agent, he says, because they have had prior experience with similar markets. He likens the situation to a professional athlete who has played in the playoffs before or competed in a large-scale event like the Masters in golf.
Earlier in the year, the market was not realistic.
That tended to leave buyers, sellers and agents scrambling. “The end result can be a situation with buyer’s remorse, where the buyer no longer wants to close on their purchase. The banks sometimes struggle with appraisals, which can also result in a non-closure,” he says. “In the fast-paced market that took place earlier, some agents potentially made more mistakes, especially since they weren’t experienced enough to handle multiple offers.”
Home inspections and interest rates
While some homes may not require a home inspection, there are lots that definitely need one. “In an extremely busy market, buyers could potentially end up with an unwanted surprise—at a great expense,” says the REALTOR®.
He likens it to the necessity of having speed limits on our roadways. The faster you go, the more chances you have of getting into an accident.
“We are now facing an increased mortgage rate, which many would not like to see, but the truth is it will help balance the market overall. Lower interest rates basically were one of the reasons for the inflated house prices and homeowners were simply taking on larger mortgages than ever,” he says.
For years many homeowners would tell him the same thing: that mortgage money was cheap to them. His answer to that never varied: “You do know you have to pay it back at some point.” If the rate were guaranteed for a lifetime, it would be a different story, but of course that’s not the way it works.
The market over the summer was slower but typical; that has become the norm over the past few years.
The fall market is already starting to pick up, with increased activity, though the number of listings in Newmarket is quite low. Rental availability is both quite expensive and experiencing a shortage.
Says Starr, “The market moving forward should remain stable. Buyers and sellers will have more time to make the best educated decision for their needs and wants.”
Whether you’re a buyer or a seller, he welcomes any calls or emails.
Let Dave Starr Real Estate help you make your next move. Call 416-520-3231 and get the Starr treatment you deserve.
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