Archive for November, 2017

Real estate sales professionals across Canada are sure to find new insights in the second edition of the Teranet Market Insights report. The November 2017 publication features up-to-date data on millennial home buying trends, age demographics and the impact on the Ontario real estate market, and Ontario residential sales volumes and conveyancing trends across Canada.

This is the first time demographic and real estate transactional data have been combined to derive new insights and, as expected, there is an interesting correlation that persists across generations.

 

 

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November 27, 2017

Real estate fraud is something every real estate professional wants to avoid; no one wants to get caught in the middle of a scam. Take the first step in avoiding fraud and educate yourself to spot the different types of fraud, and learn how to use the right technology to detect fraud before it’s too late.

We’re going to look at one particular type of fraud in this post: appraisal or valuation fraud. We’ve talked about fraud many times before, and how to detect appraisal fraud. It’s one of the many reasons for leveraging automated valuation model (AVM) technology. With an AVM report, you can independently audit any suspicious property appraisals you come across to ensure all the information checks out.

Your client will appreciate your efforts to dig deeper because it demonstrates your dedication as a real estate sales professional who follows a high code of ethics and professional standards, such as doing due diligence to weed out fraud.

There are all kinds of unethical homebuyers and sellers who are out to commit real estate fraud and scam their way into a bigger mortgage or better selling price. Greed, desperation, or opportunity drive scammers who have been caught inflating salaries on mortgage applications, posing as a legitimate property owner, or even taking out numerous mortgages and then dashing with the cash while the real owner is left to clean up the mess.

Here are some basic fraud prevention tips:

  • Know your client.
  • Know your market – heated markets are hubs for fraud.
  • Exercise due diligence in your research — property flips, sales/listing history, and exposure time can tell a story.
  • Issue letters of engagement with every assignment but particularly with unfamiliar clients.
  • Password-protect your reports and only give the password to your client.
  • Decline if it doesn’t feel right – providing a reliance letter to a new intended user is not a mandatory requirement; you have the right to decline – it is an extension of risk.

Appraisal fraud is often an effort to artificially and deliberately raise property value with an above-market appraisal. Maybe the appraiser is in on the scam, but often they are also unwitting fraud victims. Their report can be doctored after they’ve completed it, without the appraiser knowing.

Founded in 1938, the Appraisal Institute of Canada grants the Accredited Appraiser Canadian Institute (AACI™) and Canadian Residential Appraiser (CRA™) designations. To prevent valuation fraud, they suggest:

  • Looking for signs of altered data alteration such as: typed in data (value conclusions in the Direct Comparison Approach, Cost Approach or Income Approach, adjustments of comparable sales), blank fields or fields where information appears to have been “whited-out”;
  • Thoroughly reading the appraisal report to understand the data, the analysis and the comparable properties relied upon to arrive at the final value;
  • Engaging a professional appraiser to conduct an on-site inspection or drive-by of the property to validate information supplied as part of the mortgage application;
  • Asking the professional appraiser for a reliance letter if you are not the original client or intended user of an appraisal report. Reliance letters are critical to the mortgage process. They are issued by the author of the report/appraiser and provide a great cross-reference tool to validate the value conclusion and data from the original report.
  • Contacting the appraisal professional if you suspect any fraudulent activity.

Above is just a short list of behaviours that can occur that can mean fraud. Your ears might be ringing but here come the words again: due diligence saves the day, most of the time. Think of water, forcefully flowing from the tap as your deals, now think of the spatter that escapes the stream as representing these instances when something on a deal is off. Maybe in these cases it is better to dig a little deeper and perhaps pass on a deal rather than getting caught in the middle of a fraud scheme that can not only get you in trouble, but also put your relationships with your partners at risk.

Use GeoWarehouse to conduct this due diligence and stop real estate fraud and all the resulting consequences.

Visit www.geowarehouse.ca today.

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November 22, 2017

Please note, due to system maintenance, we will experience a service interruption affecting our Title products during this period:

Friday November 24th 9:00 PM to Saturday November 25th 8:00 AM

You will experience the following:

  • Inability to view or purchase Parcel Registers, Plan Images and/or Instrument Images in the GeoWarehouse Store.
  • Searching Instruments/Plans in the new GeoWarehouse will not yield any results.

If you have any questions please call us at 416.360.7542 or 1.866.237.5937 or email us at GeoWarehouseFeedback@teranet.ca.

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When marketing to millennials, it’s important to know who they are and what they want in real estate! In the real estate business, it’s critical to be able to quickly and efficiently respond to your clients’ wants and needs. Where do millennials and real estate meet? What do they want and how can you land them as clients?

Canada’s twenty-somethings are vocal about how they feel about the real estate market and their involvement, or if they’ll even bother. That’s not a stereotype of a lazy millennial, that’s borne out by a Huffington Post article showing that there are a record number of Canadian youth aged 20-34 still living at home with their parents. The main reason for this is that they don’t see an affordable housing market they can enter any time soon.

Then, a recent NBC News story stated that the largest group of homebuyers in the U.S., for the fourth year straight, is millennials. According to one of the largest real estate groups in the U.S., millennials are not just starting to buy homes, they are powering the U.S. housing market. (SOURCE: http://www.nbcnews.com/business/real-estate/who-s-powering-housing-market-surprise-it-s-millennials-n768196) Often where the U.S. market leads, the Canadian one will follow. Will that hold true for the Canadian millennial market? If it does, have you set your strategies for marketing to millennials?

It can be hard to adapt if you are used to selling to an older market. Millennials, like boomers and any other buyer, are looking for a professional they can trust. They value your experience and access to the tools and resources necessary to succeed in the real estate market. To effectively help your millennial clients, you need to know what they are looking for.

Here are seven tips for marketing to a millennial homebuyer:

  1. Master social media with a robust, active online presence, as millennials will go online first when looking for a real estate sales professional.
  2. Make your online personal brand more personal, don’t just post your listings. Post your day-to-day life. Millennials want to know more about who you are, not just what you do for a living.
  3. Get mobile and digitize as much paperwork as possible. Ultimately, millennials prefer the use technology to communicate, from email to text to Facebook messenger.
  4. Sell the neighbourhood – millennials are often looking for a good community and area to live in first, then the right home in that area.
  5. Guide, don’t push. They may be inexperienced, but they want to be heard just like any client.
  6. Millennials like variety and usually want to see different homes to help land on the right house.
  7. Transparency – keep them informed on everything that happens in the home selling process.

A happy millennial client is more likely to give you a good review online and boost your social media profiles. Remember, other millennials are checking out review sites and social media online when they’re looking for a real estate sales professional. Millennials are a very ‘connected’ generation with large social circles. When you do a good job, you can trust that they’ll share that with their network of influencers. Your efforts will come back in the form of future sales and referrals.

With GeoWarehouse on your side, you can leverage the tools and resources available to increase your marketing to millennials.

Find out more by visiting www.geowarehouse.ca today.

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Index Retreated 1% in October

Author: GeoWarehouse
November 15, 2017

In October the Teranet–National Bank National Composite House Price Index™ was down 1.0% from the previous month, a second consecutive monthly decline and the largest since September 2010. The retreat was due to a 2.8% drop of the index for the Toronto market, the country’s largest. Indexes were also down on the month for five other metropolitan areas of the composite index: Hamilton (−1.8%), Edmonton (−0.7%), Winnipeg (−0.7%), Ottawa-Gatineau (−0.3%) and Calgary (−0.2%). Indexes were up on the month for Halifax (1.3%), Vancouver (0.7%), Quebec City (0.6%), Montreal (0.4%) and Victoria (0.1%). For Toronto’s index it was the third straight monthly decline and for Hamilton’s the second, in both cases following 18 consecutive monthly gains. The declines of the Calgary and Edmonton indexes ended runs of six monthly gains, that of the Ottawa-Gatineau index a run of five gains. The Vancouver, Victoria and Montreal indexes were at record highs in October.

The index for Vancouver dropped after the August 2016 implementation of a tax on acquisitions by foreigners. But the market remained tight and by the beginning of this year the index had regained the lost ground. It has risen to new records in each of the last six months. Victoria’s has risen to a new record for an eighth straight month.

Teranet-National Bank National Composite House Price Index™

Among 14 markets not included in the countrywide composite index, indexes were down on the month for all but one of the 12 in Ontario, the exception being Kingston.

In October the composite index was up 10.0% from a year earlier, the smallest 12-month rise since June 2016. It was the third consecutive deceleration from the record 12-month gains of 14.2% in both June and July. The October 12-month rise was led by Toronto (13.4%), Hamilton (15.7%), Vancouver (12.0%) and Victoria (14.4%). With this result Vancouver has rejoined the ranks of markets whose indexes have risen more than the countrywide average. The 12-month advance was much smaller in Montreal (6.5%), Ottawa-Gatineau (5.0%), Halifax (1.9%), Calgary (1.8%), Edmonton (0.8%), Quebec City (0.6%) and Winnipeg (0.1%).

Index values were up from a year earlier in all 14 of the markets not included in the composite index, though the 12-month increase ranged widely – from 1.0% in Thunder Bay to 23.6% in St. Catharines–Niagara

For the full report including historical data, please visit: www.housepriceindex.ca

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Unfortunately, it seems that someone is always scamming seniors – and title fraud is one of the more common real estate scams among the older generation of homeowners in Canada. Often, older homeowners are mortgage-free or fairly close, and that makes older adults a bonanza for fraudsters.

Title fraud can happen in one of two ways:

  • Steal identities – scammers use stolen or fake identification or documents to pose as the legitimate homeowner and get one or more mortgages on the property, then walk away with the cash.
  • Register forged documents – this allows fraudsters to discharge any existing mortgages and transfer the property to themselves, register a new mortgage against the property’s clear title, and cash in.

While title fraud can be rare, the results are, without a doubt, financially and personally devastating, especially for seniors, many who bank on their mortgage-free home as their retirement investment. However, over the last number of years, title fraud has become more common. Unfortunately, people who are scamming seniors through title fraud have been successful in some cases, and they’re getting smarter.

This Globe and Mail article explores some of horror stories of seniors scammed by title fraud: https://beta.theglobeandmail.com/globe-investor/retirement/title-fraud-how-mortgage-free-seniors-can-become-a-target/article22517580/?ref=http://www.theglobeandmail.com&.

Why are seniors so often targeted?

  • They are often more trusting.
  • They can be isolated or lonely.
  • They may have more assets than most.
  • Most seniors have spent their lives building credit and stocking retirement funds.

How can seniors avoid title fraud? While title fraud can be difficult to prevent, it can be relatively easy to avoid. The single most important thing older homeowners can to do protect against title fraud costs is absolutely nothing: don’t sign any document that you do not completely understand. The most difficult thing to overcome is your own signature.

Being vigilant also helps – all homeowners should regularly check with the provincial land registry office to ensure that the title of their home is still in their name, and they should review their credit report annually to ensure everything is correct. If they don’t already have it, homeowners should consider purchasing title insurance as it’s the most secure way of preventing title fraud.

In your ongoing efforts to position yourself as an expert real estate sales professional, and as part of your community networking efforts, you may want to consider running a free title fraud workshop to help identify situations with people scamming seniors. Not only can you demonstrate your real estate expertise, but they’ll remember your concern and regard for senior citizens when they decide to choose a real estate sales professional to sell their home and buy their next one.

From mitigating risk to helping seniors buy a home, find out how GeoWarehouse provides access to a variety of reports and information that will give you the competitive edge.

Find out how you can be the expert by subscribing to GeoWarehouse today at www.geowarehouse.ca!

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Are desperate homebuyers being pushed into sidestepping Canadian mortgage rules in favour of shadier methods of financing? Some Canadians may be having a harder time buying a home due to the change in mortgage rules last year.

Now that the Bank of Canada has raised the overnight rate, and new federal mortgage rules have made it that much harder for customers looking for short-term mortgages, home renovation loans, or debt consolidations, many homebuyers or home refinancers may be forced to consider turning to riskier alternatives for financing their home.

Canada’s financial watchdog is advising regulated subprime mortgage providers to avoid partnerships with unregulated providers who may skirt the rules that were put in place to end risky lending in the first place! The Office of the Superintendent of Financial Institutions (OSFI) recently suggested banning co-lending arrangements, or bundled mortgages, that sidestep rules designed to stamp out risky lending.

Lenders can offer combined mortgages worth up to 90 percent of a property’s value with a “bundled loan” or co-lending agreement with an unregulated rival. However, federal rules prohibit regulated lenders from lending more than 65 percent of the value of a home to borrowers with bad or no credit. They also can’t lend more than 80 percent even to borrowers with good credit without government-backed insurance.

However, with “bundled loans”, lenders can offer borrowers up to 90%, circumventing rules on how much mortgage providers can lend against a property. As Canadian regulators tighten lending standards to shield borrowers in case a decade-long housing boom goes bust, these arrangements have increased in number.

Under Canadian mortgage rules, all high-ratio insured homebuyers are required to take a ‘stress test’ to qualify for mortgage insurance at a rate that is greater than their contract mortgage rate or the Bank of Canada’s conventional five-year fixed posted rate. With the rising level of debt amongst Canadian consumers and the rising costs of houses, this means more people may not qualify for a mortgage and choose risky lending alternatives. Now, the OSFI is proposing requiring stress tests for all uninsured mortgages and adjusting maximum lending amounts for local market conditions.

Are buyers with poor or no credit left with no choice but “bundled loans”? Do they put Canada’s real estate market at risk? Are the new rules helping at all, and if so, how? As a real estate professional, tell us how the recent changes to Canadian mortgage rules and rate increases have changed the way you do business. Join the conversation @GeoWarehouse.

To learn more about the tools and resources available with a GeoWarehouse subscription, visit www.geowarehouse.ca.

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