Friday, April 23, 2010

Competition Bureau misguided about MLS

Buying a home is a lot different than buying an airline ticket. Yet if you read the complaint by the Competition Bureau against the Canadian Real Estate Association (CREA), you would think it is that simple to buy or sell a home in Canada, by just using the Internet for support. Unfortunately, it is not that easy.

According to the Bureau, CREA and its member real estate boards effectively control the market in Canada, since 90 per cent of all residential home sales are completed using the Multiple Listing Service (MLS) systems, and consumers thus have no real choice in paying commissions, which, according to the bureau, is usually five per cent of the sale price. It is further claimed that the rules passed by CREA regarding use of these systems prevent anyone from offering different service models, thus eliminating choice for consumers. They would like every seller and buyer to have access to the MLS system, and be able to sell and buy properties themselves, without the services of a real estate salesperson.

No statistics are introduced by the bureau to support any of these claims. The fact is that there are other alternatives for Canadian consumers today, both within the MLS systems and outside it. There are many “For Sale by Owner” websites gaining market share across Canada, offering a flat fee service to sell your home. These include Com Free in Western Canada, Grape Vine in Ottawa and many others who participate in the National FSBO network.

Even within MLS, there is no set commission and consumers can negotiate directly with their salesperson. There are many examples across Canada where salespeople and brokerage companies charge less than five per cent commission, including flat fees.

Now that CREA has introduced changes that permit sellers to post their listings onto MLS through a realtor and not use an agent for any other service, we will see even more business models introduced by salespeople going forward, again offering more choice for consumers.

In my opinion, there is a real danger to consumers in trying to buy or sell their homes without the advice of a real estate professional. Sellers will not know how to qualify buyers who attempt to tour their home, will not understand how to properly price their home for sale and will not appreciate their obligations of disclosure of defects to unwary buyers. This will result in sellers not obtaining the maximum sale price for their homes and potentially involve them in unnecessary lawsuits from buyers.

Buyers will not know if the seller has any authority to sell the home, or whether the property is in fact in the process of being taken over by the bank. Deposits could thus be fraudulently misappropriated.

To try and understand the bureau’s position, let’s say a company bought a 100-acre lot and started selling cars, each one inspected by their certified technicians and advertised across Canada. The company was very successful. Buyers trusted them. Now a private car seller finds out that they cannot get nearly the price or exposure by selling by themselves. Should that person be able to go to the government and demand that he be put on the successful seller’s car lot, with the private seller’s name in the windshield, selling his own uncertified car to the public?

In a sense, this is what the bureau is asking regarding the MLS system, which has been built, paid for and maintained by realtors, to provide Canadians with the widest exposure, security and protection when buying or selling their home across Canada.

When you buy an airline ticket on the Internet, it costs you about $100 if you change your mind. If you make a mistake in the largest purchase decision of your life, it may cost you tens of thousands, and unnecessary legal headaches.

Now that there are new MLS rules in place, my advice to the bureau and CREA is to take some time to monitor developments over the next year, before rushing to trial, where only the lawyers win. I would be pleased to hear your own views on this very important subject.

Mark Weisleder is a lawyer, author, course developer and public speaker for the real estate industry who is an occasional contributor to Real Estate News. Visit him online at

Feel free to post your comment here;

Wednesday, April 21, 2010

Community Profile the Junction

Community Clean-up Day - Saturday April 24 8:30 AM, Green P parking lot across from No Frills on Pacific

Your Junction Residents Association is holding a Community Clean-up Day this Saturday morning.

Please come join us and help keep our neighbourhood clean.

Bags and gloves will be provided.

It’s your Junction, It’s our Junction!
JRA Members Meeting - Thursday, May 13th

Visit today

Wednesday, April 14, 2010

Live Laugh Play in Toronto

Found this Search On Tool from Google online and absolutely think it is better than sliced bread to display what marketing can do to promote your home for sale.

If you purchase a home with the David Pylyp Team you are entitled to the 1.35% interest rate mortgage available from Astrum Financial This could mean a savings to you of 60 to 90 basis points on the type of mortgage you select. Specific Program Details are available here. If you would like to meet with me; I would be pleased either to have you visit my offices at Square One; 4310 Sherwoodtowne Blvd., Mississauga, or I could come and visit with you.

I look forward to your calls.

Tuesday, April 13, 2010

I hate commissions too

Flat Fee Commissions are here to stay. Well maybe, Kinda sorta. There are Brokers that have jumped on the limited liability listing concept with enthusiasm. The Bulletin Boards are ripe with very polarized perspectives.

The Globe and Mail weighed in with Discount Days
The new rules allow agents to post listings on the MLS without seeing a deal through to its end. Before then, anyone who wanted to list a property needed an agent to see through the entire process and pay a commission that could run into the tens of thousands of dollars.
Not far behind is the MacLeans Article that talks about the Realtor Racket. It is a conspiracy!
When it comes to Canada’s other favourite pastime, real estate, griping about realtors is right up there with gossiping about house prices at cocktail parties and picking out marble countertops. But in recent weeks, the backlash against real estate commissions has taken on a more urgent tone. The Canadian Competition Bureau has set its sights on the way realtors have, for decades, operated and charged for their services, and in February it filed charges with the Competition Tribunal claiming realtors are engaged in anti-competitive behaviour.

The newspapers can write whatever they like; That is the business they are in, Finding readers. If You have some time to spend, read the comments that flow from the articles. Whether we like it or not, the comments are bitter.

No one is talking about the banks and how much profit they made; How much they charge for interest on your visa or mortgage vs their gathering costs and Cost of Funds (paid on deposits) or the fact that when you pay a bill on line the money disappears instantly but the payment is posted effective 3 days later, Does anyone question the car insurance renewal? What does that industry pay?

Has the Travel Industry been rendered obsolete? Have stock brokers disappeared? No. Ok, so here is the real skinny, some Brokers have decided that marketing in addition to the MLS system is ineffective, so why bother. They are not spending any money on print and do not understand video syndication, or internet marketing, so they will list your house for a small fee. These have been around for years.

One particular Brokerage wants to list and handle 5,000 sales. Our TEAM (RE/MAX Realty Specialists Inc.,) did 4,713 plus transactions last year with 450 agents. Its not that I do not want to show their listings, Its that now I will need to contact the owner directly to book an appointment, or ask property details, I do not want to negotiate with an owner during the showing about how well they made the built in shelving under the stairs in the basement. I do not want to explain the offer clauses to you because you chose the cheapest forum for promoting your home. I will not assume liability in the negotiating process for my "explaining" things to you vs being the advocate of my Buyers, I do not want to call and ask the owner permission for a follow up visit. I do not want your client calling me for FEED BACK!

OOPS I slipped, I called them your client. And Limited Liability or not the courts will find you proportionately liable. I do not want an envelope addressed to me that is titled Govern Yourself Accordingly or Without Prejudice.

Wait, wait it gets better. Stan Gelman a seasoned Mississauga real estate lawyer and I discussed this briefly today and he mentioned, "very rare for a lawyer to draft a real estate contract usually we just fulfill the agreed terms." Stan remarked that he expects an absolute surge in lawsuits when all this cleverness and attempts to avoid the HST clutter the MLS system. We will be meeting later this week and I will have an update for you. Stay tuned.

Your comments are invited,

Sunday, April 11, 2010

Opinion of Value ~ Appraisals Toronto

For a little clarity;
  • Online Property Evaluation
  • Market Analysis
  • Comparative Market Evaluation
  • Instant Property Values

Appraisals are done by
licensed appraisers or an Agent may provide an Opinion of Value. Appraisers may testify in court related matters; Banks prefer Appraisers because they are not selling or involved in the transaction.

The Opinion of Value includes the legal description on the property as provided by Teranet, recent sales from the street (and surrounding neighbourhood) information as drawn from MPAC, general neighbourhood conditions and any other qualifying criteria.

Market value is defined as the highest price in terms of money, allowing a reasonable time period to find a purchaser who buys with the knowledge of the uses to which it is adapted and for which it is capable of being used.

A Home Evaluation (CMA) is used by an agent and home owner to ascertain the market value that one might expect compared with other similar properties that have recently sold. If you would like a market evaluation and are considering selling please give me a call.

If you need an OPINION OF VALUE please give a call 905 361 3387 to schedule the drive by; photo session and report delivery timing.

Thursday, April 8, 2010

Housing Bubble Dilemma Toronto

IT just feels like spring everywhere!

Well, The “Bubble” did not burst as promised by so many… Record Sales are reported again by the Toronto Real Estate board with 10,430 units sold in the whole region. This indicates a 69% increase in sales with a jump in the number of available listings to 18,900.(42%) So what does it all mean? People are still competing to buy houses but they are a little more resistant and hesitant about prices. Get The Details here.

The CBC decided that I should be interviewed on the evening News regarding the real estate market; Thank you Steven DeSousa and Eric Tang! For those counting this is the third TV interview.

We have mortgage money available from Astrum Financial at prime less 90! That means even with the interest rate increase this past week the rate would be New 5 Year Fixed/Closed Interest Rate - 3.84% (TD Rate: 4.49%) New 5 Year Variable/Closed Interest Rate - 1.65% (TD Rate: 2.10%) Astrum Financial Services maintains its industry leading 3 Year Variable/Closed Mortgage at PRIME - 90 (1.35%) This is available to my clients only. You need my access / membership number to apply online. Check current rates here

Competition Bureau says you can list for a flat fee. Ok, If you want to do everything. Here are the details and disclaimers Media loves this stuff! The Canadian Real Estate Association had this rebuttal. Click here

If you are aware of someone looking to buy or sell, please send me an email with how best to reach them with their contact information. If you are considering a change, tell me about your dream home http://Bit.Ly/GetDave

HST is only a few more months away; Cheri DiNovo used the phrase Consumers do not realize how far reaching and pervasive it will be. DiNovo Video Insurance, maintenance fees, residential rents, gasoline, fuel oil for heating and many things we have not considered.

Better Strap on your seat belts!

Monday, April 5, 2010

Lender didn't have right to add credit card balance to mortgage

Does a mortgage lender have the right to add the outstanding balance on your Visa card to the amount outstanding on your mortgage?

That was the issue in a 2009 court case involving Toronto law firm Dale & Lessmann LLP and the Royal Bank of Canada.

When Dick Soong defaulted on the Royal Bank first mortgage on his house in 2007, the bank sold it under power of sale and applied the proceeds to pay off Soong’s $180,000 Homeline Mortgage and his $60,000 line of credit.

The law which applies to power of sale proceedings requires that surplus funds be used to pay off debts subsequent to the first mortgage in the order of their priority.

In this case, there were two other mortgages on title. One was to ensure that the fees of Soong’s trustee in bankruptcy got paid, and the other was for Soong’s legal fees. After the power of sale proceedings, the Royal Bank applied about $30,000 in surplus funds to pay off Soong’s RBC Visa card debt instead of paying it to the second and third mortgage lenders.

Last year, the law firm asked the Ontario Superior Court to determine who had priority over the leftover money — the Royal Bank for its Visa card debt, or the second and third mortgage lenders.

In 2005, Soong signed a Homeline Agreement with Royal Bank. Under this agreement, Soong placed an RBC mortgage on his house. The mortgage secured a conventional mortgage plus a variable rate line of credit. No reference was made in the contract or the mortgage of a Visa card agreement which had been signed 11 years earlier.

In August last year, the dispute came before Justice Harvey Spiegel, who had to decide whether the bank’s Homeline Agreement entitled it to lump the Visa card debt into the mortgage or whether the subsequent mortgage lenders had a prior claim to the money.

The judge carefully reviewed the terms of the Homeline plan agreement and ruled that the Visa debt was not secured by the RBC mortgage and that the subsequent mortgagees were entitled to the surplus funds. The judge also ordered the Royal Bank to pay costs of $4,000 to the law firm.

Geoffrey Stratton argued the case for Dale & Lessmann. He typically advises his clients to move any debt that might be secured by a mortgage and is not benefiting from a preferred rate to another financial institution. He also tells his clients to negotiate a better rate for any existing or future debts or lines of credit if they are going to be secured by the mortgage on their home.

In my own law practice, I find that homeowners are rarely aware of which debts are included in their mortgages and which are not. Banks often tack a secured line of credit on to the principal amount of the mortgage whether or not the consumer asks for it, and often, whether or not they are aware of it.

The problem with this practice is that when borrowers want a line of credit at a later date, they are unable to shop around for the best rates and terms because a line of credit is already registered on title.

Bob Aaron is a Toronto real estate lawyer. He can be reached by email at, phone 416-364-9366 or fax 416-364-3818. Visit the column archives at for articles on this and other topics.

Thursday, April 1, 2010

Boomers sandwiched between parents and the kids

If you're a baby boomer in Canada today, chances are you could be feeling a bit like a piece of meat or chopped egg, sandwiched between dual responsibilities that are consuming a lot of your energy, time and money.

Two recent polls by Investors Group confirm what many have known for a while - that a lot of Canadian boomers are either taking care of aging parents or children who are still establishing their lives, or both.

There are about 8.6 million boomers in Canada - those people born between 1946 and 1965 who now range in age from 41 to 60. About 69 per cent of boomers still have at least one living parent or parent-in-law and 35 per cent are providing an average of $5,976 and 2,184 hours a year in care to an aging parent. Roughly 60 per cent of boomers are still providing about $3,600 a year in financial support to their children, and ten per cent of boomers who are parents also are providing assistance to their parents.

"Taking care of your parents is nothing new, but we are definitely seeing its effect on boomers' resources as they approach retirement," says Jane Olshewski, Manager of Financial Life Planning at Investors Group. "With adult children taking longer to become self sufficient and aging parents living longer, today's boomers are headed for the perfect generational storm."

While some care-giving boomers are spending an average of nearly $6,000 a year on their parents, financial support is only one aspect of care that boomers are providing. Other include everyday activities such as companionship, transportation to social events, home maintenance and household chores, banking and investment or financial decision-making activities, and ensuring their health care needs are met.

On the other side, 40 per cent of boomers are still paying for their children's post-secondary education. Seventy per cent of boomers have children 19 or older still living at home and burn up mileage on the family vehicle helping them, and twenty per cent of boomers have an adult child living at home who makes no contributions to the household.

All this responsibility can add to up to lots of money, time and, in some cases, stress.

Oddly, only nine per cent of boomer caregivers said their financial commitment to their parents was a source of stress. Nearly half actually said it makes them feel good to provide this support and makes them feel like they are repaying their parents for the time and effort they put into their upbringing.

Instead, the stress was created more by the demands placed on the caregiver's time and emotional resources.

Sixty-two per cent of caregivers believe that their parents expect this type of assistance. Slightly more than half say their parents' emotional demands are a source of stress and 40 per cent say demands on their time are a source of stress.

"Boomers don't mind making these sacrifices, but many people may not be prepared for the volume or the emotional weight of these responsibilities, says Olshewski.”It's important to try for a sense of balance so that you're not sacrificing your own priorities in the long term."

John Scholl B. Mathematics, CGA,
Consultant - Investors Group Financial Services Inc.
Wealth Management & Financial Planning
Phone: (905) 450-2891 X529 Toll Free: 1 (866) 799-2223 x529 Cell (416) 731-3660

David Pylyp The issues of Elder Care are very near to my heart. There are many resources available to you, starting with the Let's ask a few questions dialog available here or simply make use of this link http://Bit.Ly/AgingParents