TARA PERKINS — FINANCIAL SERVICES REPORTER
From Thursday's Globe and Mail
Published Wednesday, Feb. 02, 2011 6:22PM EST
Last updated Wednesday, Feb. 02, 2011 6:40PM EST
Genworth MI Canada Inc. (MIC-T27.00-0.06-0.22%) is recouping the share of mortgage insurance business it lost during the financial crisis, amid rising calls for Ottawa to remove rival Canada Mortgage and Housing Corp.’s “unfair” advantage in the sector.
Although Canada’s mortgage insurance system is a key reason why the housing market has held strong, there is room for improvement, critics say, and a more competitive system would lead to lower insurance fees for homeowners.
Think tanks such as the C.D. Howe and the MacDonald-Laurier institutes want legislators to re-evaluate the system and consider spinning off, or even winding down, CMHC’s main mortgage insurance business, or giving its private sector competitors the same advantages that CMHC has.
Mortgage insurance from CMHC comes with a 100-per-cent guarantee from the federal government, while private sector competitors such as Genworth receive a 90-per-cent guarantee. The insurance is designed to ensure that the bank issuing the mortgage is repaid if the consumer defaults, but banks with mortgages that are insured by a private sector insurer have to set aside more capital to cover the remaining 10 per cent.
When the financial crisis heightened the importance of banks’ capital levels, Genworth experienced a sharp drop in business. The net amount of premiums that Genworth wrote fell from $983.6-million in 2007 to $706-million in 2008 and $306-million in 2009. At the same time, CMHC’s business grew.
“People are concerned about how big CMHC’s exposure is – and the taxpayer takes direct responsibility for that – and are looking at whether there is a way to make the system better,” Genworth’s president Peter Vukanovich said in an interview Wednesday.
“It’s not about Genworth, it’s about the consumer,” he stressed. “The current framework is good, but it could be better for home buyers.”
Genworth reported its fourth-quarter results on Wednesday, which suggest that the company is beginning to recoup market share, said CIBC World Markets Inc. analyst Paul Holden.
“If there was a level playing field in terms of government backing, the private insurers, namely Genworth, would experience a significant increase in market share in a very short period of time,” Mr. Holden said in an interview.
Genworth’s profit came in slightly above the Street’s estimate, as its net premiums written rose 22 per cent from a year earlier to $134-million, bringing the 2010 total to $552-million.
A paper released by the C.D. Howe Institute this week argues that CMHC’s mortgage insurance business “subjects Canadian taxpayers to large, ill-defined risks.” It suggests that CMHC begin backing away from traditional mortgage insurance and instead concentrate on the securitization market, in which home loans are bundled into securities that are sold to investors.
The institute also wants CMHC to be subject to official oversight by the country’s financial regulator, as are its private sector competitors. Without proper oversight, the paper argues, taxpayers don’t have a complete understanding of the risks they are exposed to by CMHC.
A paper by Jane Londerville, an associate professor at the University of Guelph, released by the Macdonald-Laurier Institute for Public Policy in November, noted that in 1997, CMHC lacked sufficient reserves to cover the claims being made, and Ottawa had to step in to ensure the agency had enough capital. Since then, CMHC has charged higher rates.
Ms. Londerville argued that CMHC’s “unfair” advantage over private sector competitors is hurting consumers who buy mortgage insurance. A person buying a $300,000 house with a 5-per-cent down payment, for example, would pay about $8,000 for mortgage insurance – more if he were deemed a risky borrower.
She is calling on Ottawa to spin off CMHC’s mortgage insurance business and to give the same guarantee to all mortgage insurers to create “a more home-buyer-friendly marketplace.”
Along with Genworth, the other major competitor to CMHC is Canada Guaranty Mortgage Insurance, which was bought from AIG last year by a group led by the Ontario Teachers’ Pension Plan.
Thursday, February 3, 2011
Home prices could dive if rates rise, analyst says
STEVE LADURANTAYE — REAL ESTATE REPORTER
From Friday's Globe and Mail
Published Thursday, Feb. 03, 2011 6:57PM EST
Last updated Thursday, Feb. 03, 2011 7:00PM EST
Higher interest rates could “easily” cause Canadian home prices to collapse, Capital Economics warned in a bleak report that suggests the housing market is likely to suffer the same sort of crash that has plagued countries such as the United States.
The report suggests that house prices in Canada have climbed at the same pace as the United States, but have not fallen at the same rate. In the United States, some markets have seen prices fall as much as 50 per cent through the recession.
As the Bank of Canada raises interest rates, mortgages will become more expensive for consumers. Add inflation to the mix, and Capital Economics predicts prices could fall 25 per cent over the “next few years.”
“Even small rises in official interest rates have been shown to have a big effect on homeowner confidence in other countries under similar circumstances as they can change perceptions toward the housing market very quickly,” Capital Economics economist David Madani said. “If the Bank of Canada does resume its monetary tightening this year, this could easily prove to be a tipping point for a house price collapse.”
Other market watchers expect higher rates to hinder price gains, but few are calling for as sharp a drop. The Canadian Real Estate Association expects sales to fall 9 per cent this year, for example, but prices are only expected to drop 1.3 per cent. It hasn’t issued a forecast beyond 2011.
Bank of Nova Scotia economist Adrienne Warren said it’s difficult to compare the Canadian situation with the American because Canada’s gains have been based on a strong economy – relatively speaking – as opposed to easy lending.
“We lack the triggers that prompted the U.S. market to crash,” she said. “I think what you see is prices staying flat as incomes rise over the next few years.”
Such a scenario could lead to home prices that are flat over the next five years, as personal incomes catch up.
“I think some markets may be overvalued and they can’t stay that way forever,” she said. “If you look at the longer-term trend in ratios, we could say things are overvalued by about 10 per cent, which is typical at the end of a boom. But there are so many different measures – it’s just safe to say that eventually you see a softening in prices.”
The country’s bank economists have varied short-term forecasts, but there are no expectations among the largest forecasters that a crash is inevitable, or even likely.
Some have suggested drops of 10 per cent may be in order next year as mortgage rates move higher and households struggle to service record debt loads, and the Bank of Canada specifically mentioned the prospect of “a more pronounced correction in the Canadian housing market” as one of three key risks to the country's economy.
However, real estate sales data from the autumn market showed that fewer houses have been listed and prices were largely unchanged from a year ago.
Capital Economics chief concern is that as the central bank raises rates, variable-rate mortgages become more expensive and homeowners could find themselves priced out of their homes.
Fixed-rate mortgages are tied to government bond yields, but would move in the same general direction. If a homeowner is already stretched financially, any hike could prove problematic.
However, a survey by the Canadian Association of Mortgage Professionals released late last year showed that Canadians are confident they could shoulder higher mortgage payments without too much difficulty, with 84 per cent saying a $300 monthly increase was no problem.
If prices do fall as far as Mr. Madani predicts, “the knock-on effects to consumer spending and housing investment could be significant and perhaps even strong enough to push the economy into another recession,” he said.
Capital Economics also warns that a crash in prices could cost Canada Mortgage and Housing Corp., which insures high loan-to-value mortgages, a loss of as much as $10-billion.
In January, the federal government shortened the maximum amortization period for mortgages to 30 years from 35 to rein in Canadians from taking on more debt at a time when it is at record highs.
difficulty, with 84 per cent saying a $300 monthly increase was no problem.However, real estate sales data from the autumn market showed that fewer houses have been listed and prices were largely unchanged from a year ago.
Capital Economics chief concern is that as the central bank raises rates, variable-rate mortgages become more expensive and homeowners could find themselves priced out of their homes.
Fixed-rate mortgages are tied to government bond yields, but would move in the same general direction. If a homeowner is already stretched financially, any hike could prove problematic.
However, a survey by the Canadian Association of Mortgage Professionals released late last year showed that Canadians are confident they could shoulder higher mortgage payments without too much difficulty, with 84 per cent saying a $300 monthly increase was no problem.
If prices do fall as far as Mr. Madani predicts, “the knock-on effects to consumer spending and housing investment could be significant and perhaps even strong enough to push the economy into another recession,” he said.
Capital Economics also warns that a crash in prices could cost Canada Mortgage and Housing Corp., which insures high loan-to-value mortgages, a loss of as much as $10-billion.
In January, the federal government shortened the maximum amortization period for mortgages to 30 years from 35 to rein in Canadians from taking on more debt at a time when it is at record highs.
While most private sector watchers expect the market to pull back in the second half of this year after a strong two-year run, the Capital Economics call for a 25-per-cent drop is the harshest.
After hitting record highs in May, the Canadian market did slow down, and ground to a halt across most of the country through the summer. Recent data from the Canadian Real Estate Association has many economists predicting a “soft landing,” however, with activity returning at a lower level and prices holding steady rather than rocketing higher each month as they have through the recovery.
From Friday's Globe and Mail
Published Thursday, Feb. 03, 2011 6:57PM EST
Last updated Thursday, Feb. 03, 2011 7:00PM EST
Higher interest rates could “easily” cause Canadian home prices to collapse, Capital Economics warned in a bleak report that suggests the housing market is likely to suffer the same sort of crash that has plagued countries such as the United States.
The report suggests that house prices in Canada have climbed at the same pace as the United States, but have not fallen at the same rate. In the United States, some markets have seen prices fall as much as 50 per cent through the recession.
As the Bank of Canada raises interest rates, mortgages will become more expensive for consumers. Add inflation to the mix, and Capital Economics predicts prices could fall 25 per cent over the “next few years.”
“Even small rises in official interest rates have been shown to have a big effect on homeowner confidence in other countries under similar circumstances as they can change perceptions toward the housing market very quickly,” Capital Economics economist David Madani said. “If the Bank of Canada does resume its monetary tightening this year, this could easily prove to be a tipping point for a house price collapse.”
Other market watchers expect higher rates to hinder price gains, but few are calling for as sharp a drop. The Canadian Real Estate Association expects sales to fall 9 per cent this year, for example, but prices are only expected to drop 1.3 per cent. It hasn’t issued a forecast beyond 2011.
Bank of Nova Scotia economist Adrienne Warren said it’s difficult to compare the Canadian situation with the American because Canada’s gains have been based on a strong economy – relatively speaking – as opposed to easy lending.
“We lack the triggers that prompted the U.S. market to crash,” she said. “I think what you see is prices staying flat as incomes rise over the next few years.”
Such a scenario could lead to home prices that are flat over the next five years, as personal incomes catch up.
“I think some markets may be overvalued and they can’t stay that way forever,” she said. “If you look at the longer-term trend in ratios, we could say things are overvalued by about 10 per cent, which is typical at the end of a boom. But there are so many different measures – it’s just safe to say that eventually you see a softening in prices.”
The country’s bank economists have varied short-term forecasts, but there are no expectations among the largest forecasters that a crash is inevitable, or even likely.
Some have suggested drops of 10 per cent may be in order next year as mortgage rates move higher and households struggle to service record debt loads, and the Bank of Canada specifically mentioned the prospect of “a more pronounced correction in the Canadian housing market” as one of three key risks to the country's economy.
However, real estate sales data from the autumn market showed that fewer houses have been listed and prices were largely unchanged from a year ago.
Capital Economics chief concern is that as the central bank raises rates, variable-rate mortgages become more expensive and homeowners could find themselves priced out of their homes.
Fixed-rate mortgages are tied to government bond yields, but would move in the same general direction. If a homeowner is already stretched financially, any hike could prove problematic.
However, a survey by the Canadian Association of Mortgage Professionals released late last year showed that Canadians are confident they could shoulder higher mortgage payments without too much difficulty, with 84 per cent saying a $300 monthly increase was no problem.
If prices do fall as far as Mr. Madani predicts, “the knock-on effects to consumer spending and housing investment could be significant and perhaps even strong enough to push the economy into another recession,” he said.
Capital Economics also warns that a crash in prices could cost Canada Mortgage and Housing Corp., which insures high loan-to-value mortgages, a loss of as much as $10-billion.
In January, the federal government shortened the maximum amortization period for mortgages to 30 years from 35 to rein in Canadians from taking on more debt at a time when it is at record highs.
difficulty, with 84 per cent saying a $300 monthly increase was no problem.However, real estate sales data from the autumn market showed that fewer houses have been listed and prices were largely unchanged from a year ago.
Capital Economics chief concern is that as the central bank raises rates, variable-rate mortgages become more expensive and homeowners could find themselves priced out of their homes.
Fixed-rate mortgages are tied to government bond yields, but would move in the same general direction. If a homeowner is already stretched financially, any hike could prove problematic.
However, a survey by the Canadian Association of Mortgage Professionals released late last year showed that Canadians are confident they could shoulder higher mortgage payments without too much difficulty, with 84 per cent saying a $300 monthly increase was no problem.
If prices do fall as far as Mr. Madani predicts, “the knock-on effects to consumer spending and housing investment could be significant and perhaps even strong enough to push the economy into another recession,” he said.
Capital Economics also warns that a crash in prices could cost Canada Mortgage and Housing Corp., which insures high loan-to-value mortgages, a loss of as much as $10-billion.
In January, the federal government shortened the maximum amortization period for mortgages to 30 years from 35 to rein in Canadians from taking on more debt at a time when it is at record highs.
While most private sector watchers expect the market to pull back in the second half of this year after a strong two-year run, the Capital Economics call for a 25-per-cent drop is the harshest.
After hitting record highs in May, the Canadian market did slow down, and ground to a halt across most of the country through the summer. Recent data from the Canadian Real Estate Association has many economists predicting a “soft landing,” however, with activity returning at a lower level and prices holding steady rather than rocketing higher each month as they have through the recovery.
Monday, January 31, 2011
URBANATION SAYS “FOURTH QUARTER FLURRY” DRIVES 2010 TORONTO CONDO MARKET TO NEAR-RECORD SALES
Q4 2010’s 6,280 new Toronto CMA unit sales were the 4th highest quarterly total
on record: with aid of robust resale activity, 2010 market powers to strong finish
FINAL – TORONTO – January 31, 2011…Urbanation Inc., the leading source of information
and analysis on the Toronto condominium market since 1981, today released its Q4-2010 market
overview.
For the second consecutive year, the Toronto CMA new-condominium market finished with a
bang. A flurry of sales activity in Q4-2010 resulted in 6,280 new condominium units sold in the
quarter. This represents an impressive rebound from the 3,805 new unit sales in the preceding
Q3-2010.
Said Urbanation Executive Vice President and Editor Ben Myers, “The Q4-2010 new unit sales
were much higher than expected, spurred by tremendous results at a number of new project
openings in the City of Toronto. In the end, 2010’s total annual new and resale condominium
sales of 37,041 units were just three per cent shy of the historic 2007 record of 38,306 units
sold.”
Compared to 2009, 2010’s sales represent an increase of 20 per cent over 2009’s 30,939 new and
resale condominium units sold. 2010 sales soared 27 per cent over 2008’s sales of 27,187 new
and resale volume.
Myers added, “Even more impressive than the sales results were the number of construction
starts, a Toronto CMA record of 18,221 high-rise condominiums started in 2010, more than
twice as many as 2009. There are now 34,548 units under construction in the CMA in 132
projects”.
The key to Q4-2010’s strength, and the overall 2010 annual sales success, seems to have been a
combination of developers continuing to restrain pricing at new project launches to appeal both
to the general market, and to investors looking to acquire suites as future rental properties.
A 2010 Urbanation survey of condominium industry professionals indicates that their major
concern with regard to 2011 sales levels will be affordability. In the Toronto CMA overall, the
unsold unit index price for new projects (the average asking price of available product per square
foot), rose eight per cent annually from $493 to $530 psf in Q4-2010. The unsold index price in
the former City of Toronto was $646 psf in Q4-2010 and $723 psf in the Downtown Core.
Pricing in the resale market has flattened in recent quarters, but has risen six per cent annually
from $352 psf in Q4-2009 to $374 psf in the fourth quarter of 2010. Resale index pricing in the
former City was $487 psf in Q4-2010 and $518 psf in the Downtown Core. There were 3,538
condominium apartment resale transactions in the fourth quarter in the CMA, with the average
unit selling for $339,000.
“Urbanation expects 15,000 to 17,000 new units to launch in 2011, with approximately 16,000
sales, representing a slight drop-off following the ‘boom’ conditions in 2010” said Myers,
“Moderate growth is expected in the resale condominium market, and Urbanation is forecasting
17,000 resales in 2011.”
ABOUT URBANATION
Urbanation is Canada's leading condominium market research company. Since 1981, Urbanation
has analyzed the Toronto condominium market, publishing the “industry bible” – Urbanation’s
Condominium Market Survey. This quarterly Report tracks new, resale and future condominium
projects. Urbanation also provides the development community with essential consulting
services, which include site and topic specific market studies and surveys.
on record: with aid of robust resale activity, 2010 market powers to strong finish
FINAL – TORONTO – January 31, 2011…Urbanation Inc., the leading source of information
and analysis on the Toronto condominium market since 1981, today released its Q4-2010 market
overview.
For the second consecutive year, the Toronto CMA new-condominium market finished with a
bang. A flurry of sales activity in Q4-2010 resulted in 6,280 new condominium units sold in the
quarter. This represents an impressive rebound from the 3,805 new unit sales in the preceding
Q3-2010.
Said Urbanation Executive Vice President and Editor Ben Myers, “The Q4-2010 new unit sales
were much higher than expected, spurred by tremendous results at a number of new project
openings in the City of Toronto. In the end, 2010’s total annual new and resale condominium
sales of 37,041 units were just three per cent shy of the historic 2007 record of 38,306 units
sold.”
Compared to 2009, 2010’s sales represent an increase of 20 per cent over 2009’s 30,939 new and
resale condominium units sold. 2010 sales soared 27 per cent over 2008’s sales of 27,187 new
and resale volume.
Myers added, “Even more impressive than the sales results were the number of construction
starts, a Toronto CMA record of 18,221 high-rise condominiums started in 2010, more than
twice as many as 2009. There are now 34,548 units under construction in the CMA in 132
projects”.
The key to Q4-2010’s strength, and the overall 2010 annual sales success, seems to have been a
combination of developers continuing to restrain pricing at new project launches to appeal both
to the general market, and to investors looking to acquire suites as future rental properties.
A 2010 Urbanation survey of condominium industry professionals indicates that their major
concern with regard to 2011 sales levels will be affordability. In the Toronto CMA overall, the
unsold unit index price for new projects (the average asking price of available product per square
foot), rose eight per cent annually from $493 to $530 psf in Q4-2010. The unsold index price in
the former City of Toronto was $646 psf in Q4-2010 and $723 psf in the Downtown Core.
Pricing in the resale market has flattened in recent quarters, but has risen six per cent annually
from $352 psf in Q4-2009 to $374 psf in the fourth quarter of 2010. Resale index pricing in the
former City was $487 psf in Q4-2010 and $518 psf in the Downtown Core. There were 3,538
condominium apartment resale transactions in the fourth quarter in the CMA, with the average
unit selling for $339,000.
“Urbanation expects 15,000 to 17,000 new units to launch in 2011, with approximately 16,000
sales, representing a slight drop-off following the ‘boom’ conditions in 2010” said Myers,
“Moderate growth is expected in the resale condominium market, and Urbanation is forecasting
17,000 resales in 2011.”
ABOUT URBANATION
Urbanation is Canada's leading condominium market research company. Since 1981, Urbanation
has analyzed the Toronto condominium market, publishing the “industry bible” – Urbanation’s
Condominium Market Survey. This quarterly Report tracks new, resale and future condominium
projects. Urbanation also provides the development community with essential consulting
services, which include site and topic specific market studies and surveys.
Friday, January 28, 2011
Starting a Social Media Campaign for your business
To help you create a social media campaign best suited for your business I will be blogging twice a week with information to assist you in your long term goal of an effective, low cost method of promoting you and your business for profit and even a bit of fun. So here goes.
First step in building an effective social media campaign is to start. It is that simple. Do not be intimidated that you cannot do it. Your campaign can be simple or broad. The simple fact is you must start.
Let's break down the most useful Social media components for you to use into the following categories:
- Blooging
- Microblogging
- Social Networking
- Social Bookmarking
- Multimedia
- Reviews and Opinions
- Wikis
Each of these unique techniques have specific elements that can be used to assist you in your approach. For instance in the Social Networking area Facebook has become the leader. Myspace is also a tool that can be used in this area as well.
Blogging has other tools, Blogger, TypePad and WordPress for instance. And so on.
This is the age of Internet 2.0. In Internet 1.0 interaction was one way. An Internet site was set up to inform people. Very little interaction occurred. You informed you clients and customers about you, your business and perhaps your success and achievements. People searched for you and only interacted by email or other one way communication techniques.
Today we expect more two way communication. In Facebook for instance we attempt to have a social experience. The largest growing group in Facebook is women over 55 years of age! This group uses Facebook to interact with children and grand children, friends and family! WOW! Who would have thought!
So let go of your fears, Change your mind set and enjoy the journey.
Next time - Blogging!
First step in building an effective social media campaign is to start. It is that simple. Do not be intimidated that you cannot do it. Your campaign can be simple or broad. The simple fact is you must start.
Let's break down the most useful Social media components for you to use into the following categories:
- Blooging
- Microblogging
- Social Networking
- Social Bookmarking
- Multimedia
- Reviews and Opinions
- Wikis
Each of these unique techniques have specific elements that can be used to assist you in your approach. For instance in the Social Networking area Facebook has become the leader. Myspace is also a tool that can be used in this area as well.
Blogging has other tools, Blogger, TypePad and WordPress for instance. And so on.
This is the age of Internet 2.0. In Internet 1.0 interaction was one way. An Internet site was set up to inform people. Very little interaction occurred. You informed you clients and customers about you, your business and perhaps your success and achievements. People searched for you and only interacted by email or other one way communication techniques.
Today we expect more two way communication. In Facebook for instance we attempt to have a social experience. The largest growing group in Facebook is women over 55 years of age! This group uses Facebook to interact with children and grand children, friends and family! WOW! Who would have thought!
So let go of your fears, Change your mind set and enjoy the journey.
Next time - Blogging!
Wednesday, January 26, 2011
Why a no-pet rental clause is unenforceable
Mark Weisleder, Toronto Star January 24, 2011
You’ve rented your home out, and there’s a “no pets” clause in the lease. Tenants sign, and move in, and soon two big dogs are living there too. Can you do anything about it?
In Ontario, unless this is a condominium whose declaration prohibits pets, there is little the landlord can do to remove the dogs.
The Ontario Residential Tenancies Act says that any provision in a lease preventing pets is void. In order to remove the pet, the landlord will have to prove that this pet is actually causing damage to the premises, interfering with the enjoyment of the landlord or the other tenants, is dangerous or perhaps causing an allergic reaction to the other tenants or the landlord.
You’ve rented your home out, and there’s a “no pets” clause in the lease. Tenants sign, and move in, and soon two big dogs are living there too. Can you do anything about it?
In Ontario, unless this is a condominium whose declaration prohibits pets, there is little the landlord can do to remove the dogs.
The Ontario Residential Tenancies Act says that any provision in a lease preventing pets is void. In order to remove the pet, the landlord will have to prove that this pet is actually causing damage to the premises, interfering with the enjoyment of the landlord or the other tenants, is dangerous or perhaps causing an allergic reaction to the other tenants or the landlord.
Third consecutive monthly price decline in November states Teranet-National Bank Composite Price Index
Canadian home prices in November were down 0.2% from the previous month, according to the Teranet-National Bank National Composite House Price Index™. This retreat followed monthly declines of 0.4% in October and 1.1% in September after a run of 16 consecutive increases. November prices were down from the previous month in four of the six metropolitan markets surveyed. Declines of 0.9% in Ottawa and 0.5% in Toronto were each the third in a row. The Calgary decline of 0.7% was the fourth in a row. Halifax prices were down 0.8%. Montreal prices were again flat from the month before. Prices in Vancouver were up 0.6%. After three consecutive months of decline in the composite index, Canadian home prices are still 4.8% above the pre-recession peak of August 2008.
To see the entire article click o nthe link above.
To see the entire article click o nthe link above.
Thursday, December 2, 2010
RECO outlines various questions you may have on The Competitions Agreement
Real Estate Council of Ontario
The following questions and answers are related to the Consent Agreement between the Canadian Real Estate Association (CREA) and the Commissioner of Competition filed with the Competition Tribunal on October 25, 2010 and the Real Estate and Business Brokers Act, 2002(REBBA 2002).
This document will be updated as additional questions may arise in the coming weeks.
The Consent Agreement
Under the Agreement, the CREA must allow “mere posting” of a listing by a broker or salesperson who is a member of CREA who has chosen or agreed not to provide services to a seller other than submitting the listing for posting on the MLS® system.
Application in Ontario
Regardless of the terms of the Consent Agreement, all persons registered to trade in real estate in Ontario must comply with the Real Estate and Business Brokers Act, 2002 and its Regulations including the Code of Ethics (Ontario Regulation 580/05).
Question: As the listing brokerage, if I provide a mere posting service on MLS® and do not provide any other services, am I obligated to verify the accuracy of the information in the listing?
Answer: Yes, the listing brokerage is obligated to verify the accuracy of the information before posting on MLS® and is responsible for its accuracy.
Question: Can I opt out of any of the requirements under REBBA 2002 or the Regulations?
Answer: No, REBBA 2002, including the Regulations, is provincial law and no one can opt out of a provincial statute or regulation.
Questions & answers related to REBBA 2002 and the consent agreement Published by the Real Estate Council of Ontario Real Estate Council of Ontario Tel: 416-207-4800 Toll Free: 1-800-245-6910 www.reco.on.ca asktheregistrar@reco.on.ca
Page 2 of 3 Nov. 9, 2010
Question: As a buyer representative, am I obligated to inform a buyer of properties that meet his/her criteria when the listing brokerage is not offering a commission or the seller is offering a commission lower than I expect?
Answer: Yes. As a registrant you are obligated to inform buyers of properties that meet their criteria regardless of the amount of commission or other remuneration, if any, being offered.
See Section 19 of the Code of Ethics (Ontario Regulation 580/05).
Question: If a seller is not being represented by a brokerage, except for a mere posting on MLS®, and I, as a buyer’s representative, have an offer that I wish to present to the seller, how do I ensure the details of my client’s offer remain confidential in a situation where the seller obtains multiple offers on the property?
Answer: You can attempt to have the seller enter into an agreement regarding the confidentiality of the offer; however, the unrepresented seller is not obligated to agree. Please remember that REBBA 2002 and the Regulations do not govern the conduct or actions of non‐registrants.
Question: If I merely post a property on MLS® and do not provide any further services to the seller, should I complete a Trade Record Sheet?
Answer: Yes. See sections 17 (Ontario Regulation 579/05) and 30 of the Code of Ethics. You should keep a record of the listing agreement, the listing information, receipt of remuneration and any other documents pertinent to the property.
Question: What if I am representing the buyer?
Answer: If you are the buyer’s representative, you are required to make a Trade Record Sheet where your client enters into an agreement of purchase of sale. See Section 17 (Ontario Regulation 579/05).
Real Estate Council of Ontario Tel: 416-207-4800 Toll Free: 1-800-245-6910 www.reco.on.ca asktheregistrar@reco.on.ca
Page 3 of 3 Nov. 9, 2010
Question: As a buyer’s representative how will I know whether I can contact the seller directly?
Answer: Refer to the listing for clear direction and if there is any question, contact the listing brokerage directly and obtain written consent to contact the seller. See Section 7 of the Code of Ethics (Ontario Regulation 580/05).
Question: Where a listing broker merely posts a property for sale and my buyer wants to submit an offer to purchase, who is the deposit payable to?
Answer: It is negotiable between the buyer and seller. You will want to inform the buyer of RECO’s insurance program which provides consumer deposit protection when a registrant holds a deposit.
Question: In a mere posting situation am I required to get the permission of both sellers and buyers of a property before I can advertise the sale?
Answer: Registrants are required to obtain permission of both buyers and sellers before advertising a sale. (Please refer to the Advertising Matters column in the Fall 2010 edition of For the RECOrd for further information.)
Question: If I have an agreement to merely post the property on MLS® that includes a payment to me of a flat fee and the seller at a later time, within the term of the agreement, decides they want me to provide other services on the same property, what remuneration arrangements can be made?
Answer: If a flat fee was charged for a mere posting a registrant could negotiate an amendment to the listing agreement to provide further services for further flat fees, if agreed to by the seller.
Question: What if I have further questions?
Answer: If you have further questions, please contact RECO at theregistrar@reco.on.ca.
The following questions and answers are related to the Consent Agreement between the Canadian Real Estate Association (CREA) and the Commissioner of Competition filed with the Competition Tribunal on October 25, 2010 and the Real Estate and Business Brokers Act, 2002(REBBA 2002).
This document will be updated as additional questions may arise in the coming weeks.
The Consent Agreement
Under the Agreement, the CREA must allow “mere posting” of a listing by a broker or salesperson who is a member of CREA who has chosen or agreed not to provide services to a seller other than submitting the listing for posting on the MLS® system.
Application in Ontario
Regardless of the terms of the Consent Agreement, all persons registered to trade in real estate in Ontario must comply with the Real Estate and Business Brokers Act, 2002 and its Regulations including the Code of Ethics (Ontario Regulation 580/05).
Question: As the listing brokerage, if I provide a mere posting service on MLS® and do not provide any other services, am I obligated to verify the accuracy of the information in the listing?
Answer: Yes, the listing brokerage is obligated to verify the accuracy of the information before posting on MLS® and is responsible for its accuracy.
Question: Can I opt out of any of the requirements under REBBA 2002 or the Regulations?
Answer: No, REBBA 2002, including the Regulations, is provincial law and no one can opt out of a provincial statute or regulation.
Questions & answers related to REBBA 2002 and the consent agreement Published by the Real Estate Council of Ontario Real Estate Council of Ontario Tel: 416-207-4800 Toll Free: 1-800-245-6910 www.reco.on.ca asktheregistrar@reco.on.ca
Page 2 of 3 Nov. 9, 2010
Question: As a buyer representative, am I obligated to inform a buyer of properties that meet his/her criteria when the listing brokerage is not offering a commission or the seller is offering a commission lower than I expect?
Answer: Yes. As a registrant you are obligated to inform buyers of properties that meet their criteria regardless of the amount of commission or other remuneration, if any, being offered.
See Section 19 of the Code of Ethics (Ontario Regulation 580/05).
Question: If a seller is not being represented by a brokerage, except for a mere posting on MLS®, and I, as a buyer’s representative, have an offer that I wish to present to the seller, how do I ensure the details of my client’s offer remain confidential in a situation where the seller obtains multiple offers on the property?
Answer: You can attempt to have the seller enter into an agreement regarding the confidentiality of the offer; however, the unrepresented seller is not obligated to agree. Please remember that REBBA 2002 and the Regulations do not govern the conduct or actions of non‐registrants.
Question: If I merely post a property on MLS® and do not provide any further services to the seller, should I complete a Trade Record Sheet?
Answer: Yes. See sections 17 (Ontario Regulation 579/05) and 30 of the Code of Ethics. You should keep a record of the listing agreement, the listing information, receipt of remuneration and any other documents pertinent to the property.
Question: What if I am representing the buyer?
Answer: If you are the buyer’s representative, you are required to make a Trade Record Sheet where your client enters into an agreement of purchase of sale. See Section 17 (Ontario Regulation 579/05).
Real Estate Council of Ontario Tel: 416-207-4800 Toll Free: 1-800-245-6910 www.reco.on.ca asktheregistrar@reco.on.ca
Page 3 of 3 Nov. 9, 2010
Question: As a buyer’s representative how will I know whether I can contact the seller directly?
Answer: Refer to the listing for clear direction and if there is any question, contact the listing brokerage directly and obtain written consent to contact the seller. See Section 7 of the Code of Ethics (Ontario Regulation 580/05).
Question: Where a listing broker merely posts a property for sale and my buyer wants to submit an offer to purchase, who is the deposit payable to?
Answer: It is negotiable between the buyer and seller. You will want to inform the buyer of RECO’s insurance program which provides consumer deposit protection when a registrant holds a deposit.
Question: In a mere posting situation am I required to get the permission of both sellers and buyers of a property before I can advertise the sale?
Answer: Registrants are required to obtain permission of both buyers and sellers before advertising a sale. (Please refer to the Advertising Matters column in the Fall 2010 edition of For the RECOrd for further information.)
Question: If I have an agreement to merely post the property on MLS® that includes a payment to me of a flat fee and the seller at a later time, within the term of the agreement, decides they want me to provide other services on the same property, what remuneration arrangements can be made?
Answer: If a flat fee was charged for a mere posting a registrant could negotiate an amendment to the listing agreement to provide further services for further flat fees, if agreed to by the seller.
Question: What if I have further questions?
Answer: If you have further questions, please contact RECO at theregistrar@reco.on.ca.
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