NOT across the industry!!

shutterstock_135232376I’m not worried about the CBC Marketplace report showing that some sales representatives or brokers are offering to break rules in order to double end a deal because I would not have been filmed doing this. This practice is illegal. There’s a big difference between Customer Service and Agency and we MUST be experts in knowing who we are talking to and what secrets we are giving away. CBC hasn’t named the people caught on tape breaking the rules, but hopefully our regulating body (RECO) will be able to get the names and punish the offenders appropriately. CBC’s reason for not giving up the names was that “experts told Marketplace the problems are not specific to individuals but exist across the industry”. I disagree.  During the past few years, I’ve been to hundreds of offer presentations on behalf of my Buyer clients and I can say that the majority of professionals are just that … professional.  Once in a while, we’ll come across someone who seems as if they may be breaking rules, but there’s not a lot we can do about it because of the secret nature of the multiple offer process.

The bottom line is that I would NEVER be filmed making these promises to potential buyer clients because I would NOT do this. If I am already representing the Sellers, I usually explain to any potential buyers that they will be treated as a customer. They’ll get honesty and fairness, but I will not divulge secrets.

We did have one situation where we listed a house and then our current Buyer clients wanted to make an offer. Pat sat with the Sellers and I sat in another room with the Buyers. I didn’t offer price advice to the Buyers but did follow their directions to improve their offer. I had no idea what the other offer was. My Buyers were very keen to get this house, likely had more money to spend, and they offered enough so that the Seller preferred their offer.  The only reason that these Buyers were treated as clients was because they were already clients. But that meant that neither Pat nor I could advise them about what price to offer. Nor could we advise the Sellers about what price to accept from these particular Buyers. This is Real Estate 101 and all of us should know this inside and out.

That doesn’t mean that Buyers aren’t under the impression that there is something to be gained by “going through the listing agent”.  A month ago I was sitting in a Tim Horton’s with some buyers who came through my Open House. We were going to be putting together an offer. They asked me to help them out with price … to give them a hint about what the Seller would accept.  I clearly explained, again, that the Sellers were the clients and that while I was very happy to be honest with these buyers, any fiduciary duties were owed to my Sellers, which means I would keep their secrets.  These buyers asked me if they should just get their own agent and I suggested that it might be the best idea. I got home an hour and a half later than I was supposed to, didn’t get the other side of that commission, but I did my job and I did it properly. My Sellers were well represented.  And if I had provided customer service to these buyers, I would have followed the rules to the letter.

If everyone understood Agency and followed the rules, we wouldn’t have to change a thing. Changing the rules so that Multiple Representation is no longer allowed wouldn’t stop what was recorded from happening. These offenders could just refer the Buyers to a friend who was in on the scam. The best way to handle this situation is to punish the offenders and the only way that RECO can investigate is if they have names.  It’s likely that these people would no longer be allowed to trade in Real Estate and that would be the best outcome.

Marketplace Story

 

Did you read Schedule B?

 

Schedule B.jpg

Someone asked why photos of the home they had purchased were still posted on-line and Joseph Richer, the Registrar of RECO, answered as follows: “once ownership of the home has been transferred to you — the new owner — a seller’s representative can’t make any reference to the property in advertising without your written consent. That includes posting photos of the home on their website or anywhere else.”

Mr. Richer went on to add that “before publishing an ad that contains the selling price, closing date or other details about the deal, a sales representative needs to obtain written consent from both you and the seller, regardless of who owns the property at the time of the advertisement.”

Have you given written consent to the listing brokerage to advertise these details of your agreement?  Look through your agreement for the listing brokerage’s Schedule B.

Most brokerages include clauses in a schedule to cover under what terms interest will be payable on your deposit. Other items are also included. I like to include a limit of one hour on any revisits and agreement that the deposit will be a bank draft. Sometimes there are clauses where the Buyer and Seller both agree that they have not received any professional advice from either brokerage like legal, engineering or environmental advice.

But there is a troublesome clause that I always adjust for my buyers, and that’s this one:

“In accordance with the Privacy Act (PIPEDA), the Buyers and Sellers hereby agree to allow the Listing Brokerage and their Representatives to distribute information pertaining to the sale of the property in future marketing material upon this Agreement becoming firm and binding. Such information may include the price but shall not include the names or personal information about the Buyer or Seller.”

There is no end date in this clause so I always add “until completion only” which gives permission to advertise the sale details until the closing date only.  It makes sense that a Listing brokerage will want to be able to advertise that they successfully sold the house and that usually includes the price or some sort of identifying information about the price – like 102% of asking or $50,000 over asking.  If this is not acceptable to you as a Buyer, ask your representative to get rid of the entire clause.

Be warned that changes to this clause shouldn’t negatively affect you in a multiple offer situation because this won’t affect the Seller’s bottom line, but this will depend on how the change is explained to the Seller.    Click the link below to read the article.

See Toronto Star Article here

Rent Control

Rent Control does NOT apply to every rental unit.  If the property was occupied on or after November 1, 1991, rent control does not apply.  It still makes sense to charge rent that is within the current market rates so that your rental unit remains competitive.

Here’s a link to the Ontario Government Rent Increase Guideline for 2016

Increasing the rent at the rent control amount gives you an opportunity to clear up interest that is accruing on the last month deposit. The interest rate and the increase guideline amount are now the same. In 2016 this is 2%.  So if you increase the rent by 2%, you automatically top up the last month deposit (on paper) by 2% by applying the interest amount to the last month deposit rather than paying it out by cheque.

Any rent increase has to follow specific rules. The notice must be delivered to the tenant 90 days before the rent increase.

Here’s a link to the instructions for a rent increase for a unit that was first occupied after November 1, 1991: N2 – Unit not under rent control

And here’s a link to the instructions for a rent increase for a unit that is under rent control: N1 – Unit under rent control

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Coffin in The Family Room

We thought this was the coolest thing ever – a sarcophagus that holds DVDs. But it was over $700!  A few years later, we were passing by the same store and they had a “Going out of business” sale. The sarcophagus was marked down to just over $100.  We received some very strange looks while wheeling it through Erin Mills Town Centre.  Family and friends think it’s amazing. My Dad was startled one evening when it opened … slowly … on its own, so it may even be haunted.  Did I mention that it’s life size? sarcophagus

So here’s the question: If we ever sell our house, do we keep it in the room or put it in storage? It is a coffin after all, so maybe it would scare some buyers off.  On the other hand, it may give people something to talk about.  But do we really want buyers walking around talking about the huge coffin in the family room when they should be talking about the gorgeous windows and the lovely floors?

When a home is listed for sale, it should be as neutral as possible, and I’m not just referring to colour.  We have a crucifix and a sacred heart above two doors that would be packed up before listing even though they are very small. It’s not that people are offended by religion, we would just prefer that the home is front and centre and not our religious affiliation. And buyers have to be able to picture themselves living in your house.

It’s important to note that some sellers need to keep certain elements in place in order for them to practice their religion.   We have come across many Hindu prayer closets and buyers understand that the Seller will most definitely be taking all of the contents of the closet with them when they move.

But a coffin in the family room?  I think not.

Custom built and custom finished

We’re really excited about this listing that should be coming to the market within the next few weeks.  It’s a custom built by Fernbrook home on a ravine in a great neighbourhood. What’s custom about it? Well, the main floor has 10 foot ceilings which was NOT part of the standard Schedule for that subdivision. Oil rubbed bronze long plate levers are on the three panel solid doors with steeple tipped hinges. 9″ baseboards and 4″ casing and backband are made of solid poplar and not pine or MDF.   The windows have sills and aprons. The doors to the den are pocket french doors.

The kitchen was a custom design from Downsview and includes a panelled Sub-Zero Refrigerator, Wolf Dual Oven/Stove, Miele dishwasher, Sharp drawer style microwave, wine fridge, Travertine floor and marble backsplash, and Blanco sinks including an island sink.

The stairs are made of maple with open risers and Victorian pickets. The hardwood is Cherry. The tiles in the hallway and bathrooms are travertine and there’s Cornice moulding throughout the home.

The master bedroom has a balcony, a fireplace and ceiling speakers and the ensuite cabinetry is from Downsview with fixtures from Grohe.

Outside is  fully landscaped and includes a gazebo and a putting green in the extra long backyard. This is the longest lot on the street.  The garage has new flooring and a hot/cold sink with finished walls and ceiling.  Security cameras, pot lights and floodlights are also included. The shingles were upgraded and some of the roof is copper.

The finished basement has a walkout to the backyard and includes a wet bar, wine room, exercise room, home entertainment area, hardwood floors, potlights and Cornice moulding.

We can’t wait to show you the home in person.

 

Nightmare Tenant Strikes Again

Her real name is Nina Willis but she used the name Nay Lancelot to apply to rent from two seniors in Toronto who are owed over $9,000.  The seniors checked her references and say that everything looked fine.  The references were probably provided by Nina.

I did a Google search for Nay Lancelot and all that came up were quotes from King Arthur.  When I added tenant, three hits to stories in the Star and Metro News came up but this would have been too late for the seniors.

If I was screening this tenant this would have been a huge red flag.  It is very rare that anyone is anonymous on social media these days.

I’m guessing there was no credit check.  Please, please do NOT rent to anyone without running them through some kind of a credit check. All kinds of alias names show up on these checks. If someone tries to provide their own credit report, just say no!

This is the 8th rental that Nina has been involved with.  She was convicted of fraud and was sentenced to 6 months in jail.  But she’s still at it.  Here’s the story:

Click here for Metro News Story

Click here to read my blog about being a Landlord Detective

 

 

Landlord or Detective

You’ve really got to be a bit of both to make sure you get a great tenant.  A great tenant is easy to approve.

  • DetectiveCredit score is over 720
  • No aliases.
  • Employment letter with a name that’s easy to  confirm on LinkedIn.
  • Better yet, the tenant is on LinkedIn and actually works at the company shown on the employment letter.
  • Current Landlord actually owns the building where the tenant says she lives.

The easiest check for me to do is to verify that the Landlord name as listed on the rental application actually owns the building that the tenant says they are renting.  This isn’t as easy to verify when the tenant is currently renting through a large corporation, but it is easy enough to verify over the phone.  Rather than phone the number on the application, I look up the person who signed the letter on-line and phone the number that’s listed for the company.  But if the tenant is renting a house from a private owner, I look up the owner’s name. It’s easy for me to do this because my membership with several real estate boards gives me access to the Land Registry system.  I can easily find out who owns the house.

Last week, while checking a tenant’s application, I found that the name on the application did not match the owner of the home.  I found the owner’s number and left a message.  I also phoned the “landlord” that was listed on the application. She phoned me back the next day.  I asked her if she owned the house.  She said yes.  I told her that her name wasn’t on land registry.  Her story changed then. She said that she was sub-leasing to the applicant that I was phoning about.  We didn’t rent to this couple.

In our 25 years experience in renting out homes, we’ve made some mistakes.  The one that has cost the most was renting to people who would eventually stop paying rent or who would pay later and later each month. Each situation can be traced back to when I was reviewing an application and found red flags.  An inaccuracy on an application is one of the best reasons for turning away a prospective tenant.  So now, rather than call and ask the tenant about the false information, I do my own detective work and then sometimes I just say no.  An extra month vacant is less expensive than missing a few months rent and then having to go to the tribunal for an eviction order.  I like to start with great tenants.  Some may run into difficulties at some point, but they all start out as great tenants!