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Archive for June, 2016

June 27, 2016

geo2Real estate fraud is real and impacts thousands each year- this, unfortunately, is well known. Organizations from the police to regulatory bodies have made great strides in raising awareness about fraud prevention, and we too have always made this a mandate.

Uncovering and investigating potential real estate fraud on a deal can be like peeling away the layers of an onion. With each layer of due diligence you complete, you learn more which will help you make more informed decisions. We see this stage in 3 processes with 3 distinct actions that can mitigate the chances that a fraud can sneak by you.

Perform top level research. A property details report will tell you the property’s sales history, who owns the home and registered mortgages. This is usually enough to set-off alarm bells. Does something seem up? Proceed to step 2, validating information.

Validate up to the date in question: the homeowners and types and percentages of ownership. Too many transfers and transfers between related parties, even companies, may be problematic. Look at transfer dates and amounts but also what mortgages were registered. Check the property for liens. The best way to do this is through a Parcel Register* which derives data from the Province of Ontario Land Registry Information System – the most current and accurate source of housing data in Ontario. Something come up on your Parcel Register*? Proceed to step 3, checking registered documents.

Check registered documents. Something has come up on title and you want more information, such as who the registering party was. You can do this by obtaining an Instrument Image. An Instrument Image is an image of the document used to register the item and can be obtained by having the registration number of the item registered on the Parcel Register*.

At this point you:

  • Should be in a position to determine whether your suspicion is grounded. If fraud is present you should pass on the deal (and therefore take the necessary steps required to alert the appropriate institutions).
  • You are armed with more information and your client is able to explain the occurrence and provide you with satisfactory explanation to move forward.
  • You know more about the property you are selling because, if you uncovered this information, likely the buyer’s agent will too and it is your responsibility to disclose material facts to a transaction.

The great thing about doing your due diligence is that, when it turns out that your client is clear and there is no fraud present, your client can see that you are serious about what you do and protecting your clients and the public at large.

Get as much information as possible, as soon as possible. GeoWarehouse has the tools that make due diligence and preventing real estate fraud easy.

Find out more by visiting www.geowarehouse.ca.

*An official product of the Ontario government pursuant to provincial land registration statutes.

 

 

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Enriched Comparables Sales Report

Author: GeoWarehouse
June 21, 2016

The NEW GeoWarehouse brings a more interactive way of get insights into comparable sales for a property or a neighbourhood.

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geo1With a July rate announcement right around the corner the Canadian interest rate guessing game begins. It has been wildly reported that one of the things that could certainly smolder a hot real estate market would be rate hikes.

2015 was an interesting year. With talk that Canada was in a recession combined with the ever dropping oil prices and a dollar that hit the floor, the Bank of Canada reduced interest rates by .25% twice, leaving Canada’s lending rate at .5% which has only been seen twice prior to 2007, before the recession in 2008 hit.

In fact, we took a look back at the Bank of Canada’s past interest rate announcements since 2007 and the results were interesting:

  • Jan 2004 – 4.25%
  • Jul 2007 – 4.5%
  • Dec 2007 – 4.25%
  • Jan 2007 – 4%
  • Mar 2008 – 3.5%.
  • April 2008 – 3%
  • Oct 2008 – 2.25%
  • Oct 2008 – 2%
  • Dec 2008 – 1.5%
  • Jan 2009 – 1%
  • Mar 2009 – .5%
  • Apr 2009 – .25%
  • June 2010 – .5%
  • July 2010 – .75%
  • Sept 2010 – 1%
  • Jan 2015 – .75%
  • July 2015 – .5%

A few points to note:

  • Interest rates have not been as low as they are now since July 2010
  • Interest rates remained at 1% from Sept 2010 – Jan 2015
  • The Bank of Canada reduced rates twice in 2015, the first time since 2009 when the BOC reduced rates 3 times during the course of the year.

Where speculation is concerned, Canada is not currently in a recession (this acknowledges the issues in Alberta) and oil prices are increasing (see more at: http://oilprice.com/Energy/Energy-General/Why-Oil-Prices-Increased-Despite-Doha-Disaster.html). Could this mean a July 2016 interest rate increase or, as was the case with April’s announcement, will the Bank of Canada maintain the status quo?

There is no doubt, should interest rates get back to 2007 levels, that this will have an impact on the housing market. Look at urban centres like Toronto and Vancouver, where the average price of a single family detached home has surpassed 1 million dollars, where a mortgage on the same property at 2007 interest rates vs todays rates would cost significantly more to repay both in bottom line cost and in massive mortgage payments. This could certainly impact demand.

Also, what is interesting is that, should rates go up, depending on how the economy is performing, it could happen as rapidly as they went down – and we saw that they went from 4.5% in July of 2007 down to .25% in under 24 months.

What are your thoughts? Join the conversation on our social networks:

Facebook: https://www.facebook.com/geowarehouse

Twitter: https://twitter.com/GeoWarehouse

 

 

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Who Registered the Property Lien?

Author: GeoWarehouse
June 13, 2016

geo1You worked hard to land your deal and know you are excited to get the property sold. Now it’s due diligence time. You not only need to research the property, you also you need to look into your client. There is no better time to do so than at the very beginning!

You turn to your tools and begin looking at the property, sales history, sales comps and other initial checks and balances. Check. Check. Check. Things are looking good.

Now it’s time to vet the financial positioning on the property. The financial information on the property details report revealed that the client has 3 mortgages registered! Could these be a sign that the client has an underlying financial problem?

You decide to run a Parcel Register* and search and the worst outcome happens – there are 2 liens registered against the property. One lien indicates a company name and the other an individual’s name. You ask your client and they have no idea what you’re talking about. It is time to dig deeper. At this point, a consent for third parties to disclose information to you makes sense because further investigation will be needed and you don’t want to be blocked by third party privacy concerns.

Suddenly, you feel that you have been launched into a game of Deal or No Deal. Depending on what is potentially owed on the liens, there could be no equity left to pay you. What started out as promising has now become potentially problematic.

You have to find out who registered the lien and the amount required to get it discharged. The only way to find out who registered the lien is to get the details about the individual who registered it – this would be your starting point.

At this point, you have to go back to your tools. In the GeoWarehouse Store you can use the registration number of the lien to request an instrument image. This document will reveal the party who registered the lien, which is usually the lawyer who represents the person who is owed, as well as their contact information.

Now you can write to the other side to request what would be required to discharge the lien. Do not count on the amount registered on title, as the balance could be greater. If your client has not been making payments or the lien registrant has not been successful in collecting then expect new interest, potential penalties, legal fees and discharge fees to get the lien removed.

A registered lien can cause big problems throughout the process, and too much money owing elsewhere can lead to a client’s inability to pay you – which is always to be avoided. GeoWarehouse can help you identify issues at the very beginning.

Find out more by visiting www.geowarehouse.ca.

*An official product of the Ontario government pursuant to provincial land registration statutes.

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geo1When a real estate lawyer performs a property title search, one of the most critical documents they rely upon is the Parcel Register*. The Parcel Register* is a document that provides significant details about a property and its financial history. Real estate lawyers are not the only professionals who have access to Parcel Registers* – you do to.

While you likely would not perform a complete title search on a deal (that is the real estate lawyer’s role), requesting a Parcel Register* will give you great insight and enable you to identify potential problems with respect to your deal – problems that could surface later.

While there is so much information in a Parcel Register* that is useful, today we wanted to provide you with a 5 Point Parcel Register* check with some of the most important:

1. Legal Description of the Property – Verify the legal description of the property.

2. Property Ownership and Type of Ownership – Validate who is on title to the property as owners, as well as types and percentages of ownership. Sometimes other people can show up on title, even in a very small percentage of ownership, but if this happens it can present a real issue. Sometimes your client may honestly have forgotten that a parent or guarantor is on title.

3. Registered Mortgages – Review all registered mortgages, dates registered, amounts and who issued the mortgages. This can reveal if the property is encumbered which is an issue when it comes to paying closing costs from the proceeds of a sale. Discovering this at the point when a client is engaged enables you to make financial arrangements with your client.

4. Transfer History – Review the property’s transfer history to see the number of transfers, from/to information and transfer amounts. Too many transfers in a short period of time and many non-arms-length transfers could be a sign that, at the most, real estate fraud is present and, at the least, something is off and digging deeper makes sense.

5. Undischarged Encumbrances and Liens – Review the property for liens and if it seems that there are more mortgages on title than what the client told you, it could be that they are simply undischarged mortgages (not owing, but still registered). Undischarged mortgages can be a real pain because they will have to be discharged before your deal can close.

As you can see, a Parcel Register* is your frontline resource for discovery. Don’t get stuck not knowing – this could cost you time and money.

Hopefully you have found this blog helpful and please note that you can obtain a Parcel Register* right in the GeoWarehouse Store.

Not a GeoWarehouse customer? Find out why you should be! Visit www.geowarehouse.ca.

*An official product of the Ontario government pursuant to provincial land registration statutes.

 

 

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The NEW GeoWarehouse provides you with superior mapping and search capabilities to help you find the property of interest in no time!

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