S e r v i c e . I n t e g r i t y . R e s u l t s .

TREB – Economic Commentary – May 2010

Summary:

Canadian Housing starts climbed in April, reaching a
seasonally adjusted annual rate of 201,700 units – a 1.3 per cent
increase from the upwardly revised rate of 199,200 units recorded in
March. Multiple-family starts drove the increase, rising 27 per cent to
98,600 units. Single-detached starts dipped 12.7 percent to 83,900
units, breaking an 11-month streak of gains. Within the GTA, starts
rose 25 per cent to an annual rate of 32,800 units. This increase was
also on the back of a strong multiple-family starts.

Download PDF :Canadian Housing Starts April 2010

Changes in the MLS system? – Q & A for Real Esate Consumers

The recent public debate over proposed amendments and the upcoming Competition Tribunal review have created some level of uncertainty and confusion in the marketplace. To that effect, we have prepared this communication, which includes key messages and answers to questions We hope it proves helpful to you in addressing some of the concerns or misunderstandings with respect to the proposed amendments and upcoming Competition Tribunal review.

1. REALTORS® are committed to delivering the utmost value to their clients.

• Working with a REALTOR® provides Canadian buyers and sellers with access to real estate insight, marketing expertise, expert counsel and industry search tools such as the MLS system.

• REALTORS® are bound by obligation to uphold CREA’s Code of Ethics and Standards of Business Practice and have completed the necessary entry requirements to join and maintain their membership under CREA.

• REALTORS® have experience and expertise in this field and can be a source of great advice — help clarify and interpret information gathered online and through various other sources, help navigate through complexities of real estate transactions and ensure consumers make the right decisions.

2. The MLS system is a proprietary, member-to-member platform that is monitored and managed by the Canadian Real Estate Association and regional real estate Boards.

• Access to the MLS platform is earned by REALTORS® – REALTORS® must meet educational requirements and abide by the highest ethical standards of conduct in the industry.

• The MLS platform offers consumer protection through a set of listing and usage criteria and rules, unlike a variety of publicly operated platforms, which are not bound by the same rules (Kijiji, Craigslist, etc).

• The MLS consumer portal, www.realtor.ca, is only one facet of this member-to-member system, which provides REALTORS® with a variety of business tools that they use to deliver client services.

3. The MLS consumer portal, www.realtor.ca is the most visited real estate site in Canada. Together with www.royallepage.ca, these are the trusted sources of online real estate information for Canadian consumers.

• The MLS’ robust platform allows users to access the most listings Canada – tens of thousands – in a user-friendly online environment

• The MLS database is multi-purpose offering a wide variety of services to REALTORS® and contains both member-only and publicly accessible information.

4. Consumer protection and trust are the hallmarks of our business

• The real estate market in Canada is highly competitive, and includes a wide variety of companies with diverse and innovative business models and price structures that are available to all consumers.

• As in the past, there are other channels through which buyers and sellers can participate in the market, including online and do-it-yourself options.

Frequently Asked Questions addressing client queries

Are recently passed MLS® amendments good for consumers? What’s in it for me?

No change. The recently passed MLS® amendments clarify the existing rules to address concerns of the Competition Bureau. Prior to these amendments, customers had access to thousands of REALTORS® who could post on MLS® and offered a variety of fee structures. Ultimately, the agreement between a REALTOR®and his/her client has not changed.

Can I post my own home on the MLS® system?

No. The MLS®system is a proprietary, member-to-member platform that is monitored and managed by the Canadian Real Estate Association.

• Access to the MLS® platform is earned by REALTORS® – REALTORS® must meet educational requirements and abide by the highest ethical standards of conduct in the industry.

• The MLS® platform offers consumer protection through a set of listing and usage criteria and rules, unlike a variety of publicly operated platforms which are not bound by the same rules (Kijiji, Craigslist, etc).

• The MLS consumer portal, www.realtor.ca, is only one facet of this member-to-member system, which provides REALTORS® with a variety of business tools that they use to deliver client services.

Can I just pay a REALTOR® to post my listing on the MLS® System?

As in the past, you can find a REALTOR® who will agree to do that. However, we believe that the assistance of a knowledgeable and experienced REALTOR® can help you make more informed and better purchasing or selling decisions on what is often the largest financial transaction consumers will make in their lifetime.

• REALTORS® have much experience and expertise in this field and can be a source of great advice. They help clarify and interpret information gathered online and through various other sources

• Help consumers negotiate and obtain the best price for their homes

• Help consumers navigate through this complex process

• Provides reassurance to consumers that they are dealing with ethical and experienced professionals (REALTORS® meet strict CREA and local boards requirements)

• Offer consumers recourse in the event of unlawful behaviour (insurance, licensing, etc)

If the rules are going to change, should I wait to sell my house?

No. Buying or selling a home is very much a personal decision based on a consumer’s needs and timeline. There are a number of factors that determine the best timing and your REALTOR® is there to help you and advise you through this process.

Furthermore, it is not possible to predict the outcome of the Tribunal review. We will not even know the outcome until the end of the year at the earliest. At that time, it could also be appealed, extending the process further. There are many other market factors that clients would be best advised to discuss with their REALTORS® before making any purchasing or selling decision. These factors include seasonality, anticipation of future interest rates, market conditions, etc.

• REALTORS® understand their clients’ needs and use their expertise to help determine the right time to buy or sell a home.

Are fees charged by REALTORS® going to be affected by current or potential changes to MLS® Rules?

No. As always, fees are negotiated between the REALTOR®and the client. Changes to the MLS® Rules do not relate to fees.

Mortgage News Update – Changes in Canadian Financing Structure

As you may have heard this morning, Federal Finance Minister Jim Flaherty announced changes to mortgage insurance rules intended to come into force on April 19, 2010, as follows;

1. All borrowers must meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term –  As a TD Mortgage Specialist,  we already are in the practice of qualifying clients based on the 5 year fixed rate, and coach clients to structure their payments at this rate when opting for variable rate products, or shorter term mortgages.
2. The maximum amount one can withdraw in refinancing their mortgage will be reduced to 90% from the current 95% of the value of one’s home – Very rarely will a 95% refinance situation come into play.
3. Non-owner occupied properties will require a minimum down payment of 20% – To avoid additional costs i.e. premiums, most clients have 25% for down payment on Income properties.  If a client only has 20% for down payment, the premium that CMHC charges is 2.5%. All income property qualifications are based on 25 year amortization. This has not changed.
4. There were not any changes to down payment requirements or amortization for owner occupied properties.