It’s been a few weeks, if not months, since we did this feature, and the letters have been racking up.
Let me pull out a few letters that touch on a number of different subjects, starting with confusion, then delving off into disappointment and frustration, and finally ending on a happy note…
LETTER #1:
Hi Dave,
I have to start by saying that I have recently come across your blog and I instantly became a fan. You’re perspective makes for a great read every time.
I was reading your reefer madness post and it made me have to reach out and explain the somewhat funny situation going on in the Downtown Markham condo I own. I don’t think anyone has thought of this yet and had to share it with you.(Not sure if Downtown Markham is on your/your clients radar often, but its a GREAT place for condos).
Two details to the story: First, when Canadian marijuana legalization occurred, the Ontario Government gave every municipality the option to ban pot shops, etc as well as actually ban the public smoking of weed. Markham City Council voted to ban the shops and ban smoking outside in the public at all. Secondly, on top of this, my condo board decided to prohibit smoking cannabis inside the units of the condo.
Combining those two together… and I technically cant smoke anywhere!
Its kind of been amusing me for a while what the actual answer to this would be. Out of pure curiosity, i have actually been planning on going to a city hall meeting, etc, and asking the City of Markham itself what the recommended thing to do is?
Wondering if you could share any insight. Keep up the amazing work.
Nathan
–
Hi Nathan,
Thanks for touching base, I’m always happy to hear from my readers!
The short answer is: this is all going to end up in court. As I wrote on my blog, the rules that condo boards are setting seem to contradict sections of the Canadian Charter of Rights & Freedoms.
Some will argue that a private corporation (ie. condo board) can set its own rules, and others will argue that since anybody can make the “medical marijuana” claim, the rule is useless.
Then what about privacy laws? Can a condo board ask for a doctor’s note? Who in the world is going to provide one?
This is going to court, no doubt about it!
David.
LETTER #2:
Hi David,
Enjoy your blog and want your opinion on something.
So I signed up with a Real estate agent in 2017 on a 1 year contract.
He was good, no issues at first. We made several offers but was outbidded on them. On our last offer, the seller accepted our price however I got cold feet after rethinking the house. I think at that point it was December and after so many rejection I just wanted a home. Anyway we didn’t sign the counter offer. And told this real estate agent, we’re putting our search on hold.
Come spring 2018, one of our close friend just got his license and is also a mortgage broker who can help us with getting a decent mortgage. He showed us a few properties and we ended up purchasing one with him. I figured I didn’t need to inform our previous real agent as our contract ended and the conversation would be awkward.
So just today I got an angry email from that agent saying he found out about our purchase (I guess he looked us up). And pretty much said we took his time for granted, etc.
If course I feel bad. It wasn’t personal just business reason for not continuing with him. But I figure clients switching agents is normal. So a client switching on you shouldn’t be something to get worked up on.
Was I wrong in not telling him? What is good etiquette here?
Regards,
Feeling bad
–
Hi ‘Feeling Bad’
This is an unreal story.
I’m shocked that an agent would do something like this, but then again, not really.
It boggles my mind. I’ve been in the business for 16 years, and I have never even thought about doing something like this, let alone done it.
I always look at situations like this and think, “What’s the upside?” What can an agent gain from this? They get something off their chest, but there’s nothing gained, and only lost reputation, good standing, and any iota of respect.
I recently referred a client in Niagara on the Lake to an agent from our office out there, and he sold my client a condo for her son. She had worked with an agent a few months earlier, but said he was unresponsive, always told her to go to open houses on weekends instead of accompanying her to showings, and didn’t send her listings. When she closed on her son’s new condo, he looked her up, found out she had bought a place, then sent her threatening messages. He said that “it would go away for $5,000.” I encouraged her to complain to RECO.
Agents like this will be out of the business in the long run, but in the short run, I feel bad for the few people who actually use their services.
The worst part about this is that he made you sign a year-long contract! I don’t always sign contracts with my clients. They like me, they use me. End of story. I sign a contract when they buy a place!
I’m happy to hear you found a home.
Just ignore this guy, pay him no mind. Be happy in the new home! ????
David.
LETTER #3:
Hello there
Im currently in the market for a home in the GTA, and have been reviewing your blog to try to educate myself on working with an agent and trying to make sense of the representation agreement. I’m confused and hoping you might be able to help clarify something for me. Here is my problem…
I put in an offer on a home in early July, when I did, the agent included a document that I sign authorizing her to represent me. it was a single page, and I assumed it was necessary in order for her to present the offer for the property on my behalf. The offer was rejected, however I learned last week that the agent was under the assumption that I was now “signed to her” this came as a shock to me as the document I signed was only a single page (2 of 4) I never saw or signed the other 3 and it had no beginning or end date on it anywhere.
Since that time and without my realizing she was under this impression, I have seen several homes on my own. mostly by just calling up the listing agent and arranging a showing myself. I now wish to make an offer on one of these properties, but am concerned about what will happen with regard to the commission on the purchase.
Does the agent who previously presented an offer for me have claim over my presenting an offer on this new property? Since the page I signed had no beginning or end date am I signed to her indefinitely? If I am indeed signed to her in this manner, does the listing agent who showed me the property have any claim to dispute the commission going to the signed agent ?
Any guidance would be greatly appreciated. Please feel free to post my question on your blog.
With Thanks
T
–
Hi T,
A few things jump out at me from your email:
1) A “Buyer Representation Agreement” is three pages long, so I don’t know what she had you sign if it was only one page.
2) A contract is not enforceable, by law, without a starting/ending date, and/or a price if applicable. So this contract without a date isn’t worth the paper it’s printed on.
3) If she didn’t provide you with a signed copy of the contract, then it’s not enforceable either. You must be in receipt.
This agent has zero claim to you as a “client,” in my opinion.
Even if she did, the only claim she would have would be against your future agent (or listing agent, if you buy through the listing brokerage), and not you personally. She would have to sue them after your purchase closes, because that’s the only way she would find out that you had purchased.
Don’t worry – go out and buy with freedom and confidence!
David.
LETTER #4:
Hi! I’ve been reading your blog and have found it super interesting. I’m wondering how clients can ensure they’re going to have a decent experience with their realtor?
I had to move on from my first one because he was putting extreme pressure on me to make real estate investments and I only wanted a condo to live in – he even called me out to view condos with dens (even though I didn’t want a den) to put me on the spot about buying multiple properties – time well wasted.
My new realtor has been okay and she was good at finding a great place and sealing the deal. But now that I’ve bought, she doesn’t seem to care. It took forever to get back to the unit to see it – she bailed last minute and was late for the follow up. She’s not interested in showing me my storage unit, she didn’t suggest a final walk through of the property and she’s not really answering questions.
But my question is this – if she wants a repeat client, then why not just finish things off properly? Why risk not going on a final walk through? It’s stressful as a first-time home buyer to feel like you always have to watch your back. Is it nuts to have higher expectations? I’m not just ranting – I’m seriously wondering how a realtor can be trusted if you have no personal relationship with them. Why isn’t the profession more regulated?
Thanks!
–
Hi Katie,
Real estate agents are like any other service provider: they’re only as good as the service they provide, and the recommendations thereafter.
At the same time, it’s incumbent upon the consumer to choose wisely.
You might suggest that the industry be more regulated so that a buyer agent should ‘want’ to provide better post-closing service, or be on time for buyer visits. But we can’t regulate common sense!
It’s like going out for dinner and finding the food takes an hour, the waiter never comes by to check if you need anything else, and then it takes forever to get the bill. You can’t regulate better service, but you can decide never to dine at that restaurant again, and not to provide good feedback to friends and family.
I get my car repaired at the dealership, and some of my friends tell me I’m spending too much. But years ago, when I took my car to “Louie’s Auto Repair,” they installed the wrong brakes, and that messed up the rotors and the shims, and by the time I went to the dealership to get the proper brake pads put in, it cost me an extra $600 to repair the damage. I should have just gone there in the first place. When I go to the dealership, they’re ready for me when I arrive, the work is completed on time, and often they give me a demo car to use for a few hours because they know I’m a busy guy and I can’t wait around. There’s a trust and understanding in place, and a convenience that is, at times, priceless.
Some buyers in the real estate market don’t feel they “need” a buyer agent, or they find an agent who is part-time and will give them money back. But this is the same thing as trying to get a basic auto garage to put in custom brake pads.
The consumer has the choice – it just has to be made wisely!
David.
LETTER #5:
I saw your post about wine cellars. I liked it. But you left out the best kind – hand dug. One of my best friends from childhood had a typical dad that liked to do his own house repairs. They had a beautiful 200 year old home in Thornbury Ontario that used to be the residence for the Mayor of Thornbury. I attached a photo of the actual house for reference.
One year he decided to build his own wine cellar. He found a nice cool area in the basement and decided to start digging. He excavated an inhuman amount of dirt on a diagonal through the dirt floor basement and then created a room about the size of a jail cell. Then used hundreds of bricks to scaffold out the hole and keep it from collapsing. Built old school cedar shelving you’d see in a 1000 year old French estate winery. Once it was completed, it was a good 20 feet below the surface of the earth. Stayed perfect temperature through every season. Sheltered from sunlight, moisture and guests. An elegant problem with a practical solution.
I think it was pretty bad ass. I attached a photo to give you a reference point to what it looked like.
Hope you’re well Dave!
(click photos for larger image)
Well, that’s it for this week!
Next week, we’ll dive into our annual “Year End” features, which I’m working on as we speak. To nobody’s surprise, many of the “Top Stories” are repeated from years’ past, but that’s a constant in our market: the red-hot stories always remain lukewarm at worst, year to year, every year.
Have a great weekend, everybody!
Appraiser
at 9:11 am
As I have mentioned here before, while I have not ‘traded in real estate’ much in the past 16 years, I still hold a valid Ontario realtor’s licence and I am a former Broker of Record from many many moons ago. Even though it is probably true that complaints get published and compliments do not, with the latter outnumbering the former by a large ratio; it is still disheartening to read these letters of poor service, neglect and incompetence from fellow registrants.
Luckily it is a high turnover profession, where only the best tend to last and also do the most deals, by far.
Regarding letter #5. Wow that is some rustic wine cellar. Very authentic.
Your friend’s dad is lucky he didn’t have any ground water issues, especially at 20′ below grade (or did he) ?
Julia
at 9:20 am
When I was first looking for a real estate agent (spoiler: ended up using David), I was shocked by how early some agents expected me to sign a Buyer Representation Agreement. I met with a pair of agents who I liked and who seemed really knowledgeable but they asked me to sign a Buyer Representation Agreement at our first meeting. I definitely left a bad taste in my mouth that they were trying to get me under contract before they had done anything to demonstrate that they could do the job.
Appraiser
at 9:32 am
If I’m not mistaken, it is encouraged by the profession to fully explain and establish a legal relationship with the client asap, in order to forego any later misunderstandings.
Julia
at 10:03 am
Fair enough, and I get the importance of the agreement overall. But I think a lot of buyers end up signing too early because they feel obliged.
condodweller
at 11:01 am
Unfortunately I would hazard a guess that most buyers don’t fully appreciate what they are signing.
IMHO the representative agreement is stacked in favour of the agent just as badly as the purchase agreement is stacked in favour of the builder.
Agents are taking full advantage of locking in unsuspecting buyers/sellers.
A few years ago when David was asking readers for topics for the next year I asked him to deal with this subject and specifically how he would suggest getting out of one of these agreements as he recommended doing when the agent is not providing proper service. Perhaps next year…..
My favourite con is when the agent gives you the forms with 6% prefilled and with a wink as he/she crosses it out and offers to do it for 5% if you let him/her represent you for the buy.
Appraiser
at 11:36 am
The part about “fully explaining” the agreement is the weak link in the contract chain, where most problems and misunderstandings arise, I fear.
Jennifer
at 12:51 pm
Completely. The terms should be that buyer and agent are able to terminate at any time, for any reason.
Appraiser
at 9:21 am
Rental rates in Canada are surging at a remarkable / unsustainable pace.
“…the average rent for Canadian properties in November of 2019 was $1,918 per month, …an increase of 9.4% annually. The median rental rate was $1,850 per month in November, up 15.6% …”
Wowza! The mortgage stress test has its consequences, apparently.
https://rentals.ca/national-rent-report
Bal
at 11:38 am
Just curious….home prices are going up and rent is also going up……how ordinary people like me can survive in this kind of environment.
Shitty basements in Brampton are going for $1800 to 2000…I just cannot believe,
I wonder sometimes…where all this will end? I am not saying properties value or rent should not increase, but should increase according to inflation….
Appraiser
at 11:52 am
Incidentally, there is no “end.”
Demand is difficult to quantify, but I believe demand in the GTA (and yes, that includes Brampton) is strong and growing.
Toronto and its environs have 3 major factors putting upward pressure on the demand side: high employment, wage growth at 2x inflation and record immigration. A difficult trifecta to argue with.
People need to live somewhere. And they are choosing to live in the GTA.
Chris
at 11:54 am
Simply put, they’re struggling.
“The household debt service ratio, which measures how much income goes to paying interest and principal, rose from 14.82 per cent to 14.96 per cent.
RBC senior economist Robert Hogue notes the service ratio is at an all-time high, and that with mortgage debt also re-accelerating, he sees little scope to remove household debt from the list of top vulnerabilities for the economy.” – BNN Bloomberg, Dec. 13
Visualized: https://pbs.twimg.com/media/ELrYYqLU4AAWEUT?format=png&name=900×900
“Delinquency rates are moving higher as the cost of living increases and servicing debt takes a bigger share of disposable income, according to TransUnion Canada.
The credit reporting firm said Monday 5.54 per cent of consumers were 90 or more days past due on at least one non-mortgage credit product in the third quarter, compared with 5.25 per cent in the same period in 2018. The 29 basis point increase is the largest since 2012, and comes after several years of declining or little changed delinquency rates.
“We are seeing a definitive shift” in delinquency rates, Matt Fabian, TransUnion Canada’s director of research and consulting, said by phone from Toronto. “The fact that it’s starting to increase could be an early warning signal.” ” – BNN Bloomberg, Dec. 10
Bal
at 1:10 pm
Chris….i think I have heard this for years…but life goes on and prices up and up and rent is up and up..lol
Kyle
at 1:55 pm
And meanwhile the mortgages in arrears continues to drop and is at record lows. It now sits at 0.09% in Ontario, half of where it was 5 years ago. I guess there really is such a thing as “good debt”.
Chris
at 2:16 pm
“That is why I believe that this uptick in filings won’t be slowing down anytime soon. This is only the beginning. And if we see a recession, if housing prices fall or stagnate, that opens the risk to a whole new rung of asset-owing Canadians who may need to file insolvency to dig themselves out.
The downpour will become a deluge.
We aren’t seeing homeowners YET, but we will…..”
– Doug Hoyes, Dec. 2019
https://twitter.com/doughoyes/status/1204035885643259906
Kyle
at 2:21 pm
Here, i fixed it for Doug…
“That is why I believe that this uptick in filings won’t be slowing down anytime soon. This is only the beginning. And *IF* we see a recession, *IF* housing prices fall or stagnate, that opens the risk to a whole new rung of asset-owing Canadians who *MAY* need to file insolvency to dig themselves out.”
Kyle
at 2:26 pm
And in the meantime, in the absence of his *IF* and *MAY* scenarios, the arrears rate continues its long running improvement trend showing that the financial strength and health of the marginal borrow continues to improve.
Chris
at 2:27 pm
So are we to infer you assume no coming recession, no stagnation of housing prices, and a bucking of the recent trend of increasing delinquency?
Kyle
at 2:41 pm
No, those events in theory can happen at any time. And if and when they do, i agree with Doug that some home owners will definitely hurt. But we weren’t talking about theoretical tail events. We’re talking about the here and now. You provided stats that show arrears for non-mortgage debt holders deteriorating, i presented stats that show arrears for mortgage debt holders are improving.
Again, talking here and now (not when some theoretical tail event happens), these stats show that the financial health of home owners (i.e. mortgage holders) is improving while the opposite is happening for holders of non-mortgage debt. So my point still stands there is absolutely such a thing as “good debt” and “bad debt”
Kyle
at 2:47 pm
But to also be clear, i see a recession and falling house prices as both being somewhat linked and a very low probability right now.
Chris
at 2:58 pm
I don’t recall anyone here postulating that there aren’t better and worse forms of debt.
Taking on debt to start a business with a reasonable chance of success would be perceived by most as good debt. Taking on debt to buy a house as decent debt (probably less productive than business investment, R&D, etc., but better than other debt). Taking on debt to buy a boat or go on vacation as bad debt.
What Bal asked was how people are coping with increasing costs of living. And the answer is, many are struggling. Even in the absence of a recession, filings for delinquency are climbing. Debt service ratio is at a record high. Household debt remains the key vulnerability to our economy according to many, including the BoC, RBC, etc.
As to there being a low probability of a recession, well, I think most people can accurately predict that about as well as they can forecast where interest rates are going, or pick next week’s lottery numbers. For what it’s worth (which isn’t much), Bloomberg currently has the odds of an American recession in the next 12 months at 29%.
https://www.bloomberg.com/graphics/us-economic-recession-tracker/
Appraiser
at 8:15 am
Yes Bal, many years have we heard this.
It’s amusing (if not just a little sad) how often bears tend to quote bankruptcy trustees and their anecdotes.
Chris
at 8:32 am
Sorry appraiser, but you are wrong again. Please read more carefully and see which comment Bal is responding to.
We haven’t heard for many years about how the debt service ratio was at a record high. Nor have we heard that delinquencies were climbing rapidly for many years.
Additionally, neither Robert Hogue, nor Matt Fabian are bankruptcy trustees, and both are discussing data, not anecdotes.
As to Doug Hoyes, while I did not include it in my post, he has a great deal of data the accompanies his opinion.
Appraiser
at 8:36 am
A 1% rise in the debt service ratio and a 5% rise in the 90-day arrears print and the sky is falling.
Yikes!
Izzy Bedibida
at 6:45 pm
I see it every day with the students in my classroom. They talk about how there is no money for X or Y sport that they like. Family activities/day trip are curtailed and no summer family vacations etc. These are signs that things are slowly unraveling, as Bal was alluding to.
Kyle
at 9:40 am
I’ve bought quite a few properties over the years and have never been asked, nor will i ever work with an Agent who asks me to sign a Buyer’s Representation Agreement, unless it is specific to a particular property transaction.
Any Agent who seeks to “bind” a client with an agreement, rather than maintaining a client through their expertise/service, is to be avoided like the plague. To me it reeks, of incompetence and desperation on the Agents part.
Appraiser
at 11:40 am
Excellent point Kyle.
It’s basically a listing agreement for a buyer, with an expiry date and a holdover clause too.
Be careful what you sign.
Professional Shanker
at 8:08 pm
Bears and bulls most certainty agree on this, BRA should only be specific to a property.
Bal
at 8:46 am
Kyle…sorry to ask…are you a realtor as well?
Kyle
at 9:12 am
No Bal, i am not a Realtor.
Jennifer
at 12:48 pm
I’m curious what the support is for these two since you only need three things for a legally binding contract: offer, acceptance and consideration. Is it in the BRA itself?
2) A contract is not enforceable, by law, without a starting/ending date, and/or a price if applicable. So this contract without a date isn’t worth the paper it’s printed on.
3) If she didn’t provide you with a signed copy of the contract, then it’s not enforceable either. You must be in receipt.
condodweller
at 4:35 pm
This idea of the legality of a BRA contract is intriguing from the point of view of enforcability. I would imagine since these are standard forms that it would have been vetted by lawyers.
I’m also aware that offer/acceptance/consideration are the requirements of a valid contract but there is a date requirement for delivery.
In the case of a BRA what is being delivered? An accepted purchase agreement? Also, is the contract valid when consideration is coming from a third party? If I sign the contract yet I’m not paying does that satisfy the consideration requirement?
The start date I assume is implied by the date the contract is signed.
Appraiser
at 12:15 pm
“Morneau to Review Mortgage Stress Test Improvements”
https://www.ratespy.com/morneau-to-review-mortgage-stress-test-improvements-121311348
DT
at 12:46 pm
Shudder. Years ago when I was looking to buy, I was frustrated that the agent I was using kept showing me houses that just didn’t fit the profile I had described. Through an open house, I found another agent who seemed to specialize in houses more to my liking. (Indeed she found a great house, and I’ve become a repeat customer). I phoned agent #1 to tell her I was moving on to a different agent. It was like a bad breakup. She was shocked and surprised, phoned me back several times wanting to know what she had done wrong, and whether I would change my mind. It was awful. If I’d had any doubt about moving on from her, all doubt was removed with those calls.