Social media, on the other hand, allows brokers highly-personalized branding

Neil Sharma
Mortgage Broker News

It’s safe to say traditional marketing is going the way of the dodo.

Social media, on the other hand, allows brokers highly-personalized branding—specifically, a curated look into their private lives that’s spliced with mortgage-topical information their followers find interesting.

Alex McFadyen, known online as The Mortgage Pug—because Ernie, a faithful companion of 11 years featured in almost every posting—is one of the industry’s most active Instagram users and says social media, if used for marketing, should be extensions of who brokers are as people.

“The biggest misconception around social media is it’s something you have to figure out,” he said. “It’s an extension of who you are and the focal point should be on a particular part of yourself. The pug was pretty natural; it came from an inside joke with my wife where we have a pug that’s famous among our group of friends. Ernie embodied what I wanted to do in the industry with my brand.”

McFadyen has advice for beginners: as a springboard, ask those who know you best what makes you interesting.

“It shouldn’t just be about what you think is interesting, but ask people what they think of you, and not just your business self but who you are personally,” he said. “Don’t be as focused on making things clean and polished; focus on being transparent and educational. You don’t have to be too open all the time, but let who you are come through.”

McFadyen began fusing social media with his business about five years ago, and while he’s active on other platforms, including Facebook, his brand is immensely popular on Instagram.

“It comes down to how you want to run your day-to-day social media,” he continued. “Facebook is useful for long conversations, but on Instagram I don’t have to spend as much time on individual conversations and I can communicate with people more efficiently. This doesn’t apply to everyone but you have to find your home and live in that home. I think Facebook is a great place, but I decided to go all-in on Instagram.”

Daniel Johanis, a broker with Rock Capital Investments, moonlights as a vlogger , frequently posting on Instagram and Facebook because, as he describes it, traditional advertising isn’t as impactful as social media. Moreover, not everybody is convinced they even need the former and often gravitate to the latter.

“In this industry, we’re similar to real estate agents in that the question becomes ‘what differentiates you from the next agent? Clients want to work with you because there’s a connection and they feel comfortable. You can leverage social media to create a relationship with someone you’ve never met before.”

In addition to vlogging, posting on Facebook and sharing Instagram stories, Johanis sends out newsletters, which he added is especially effective in generating emails from prospective clients.

“The content ranges from mortgage brass tacks to what’s going on in the industry,” he said. “I’m newer to the vlogging community, but I talk about what I’m passionate about, including my dog. Her name is Friday and she’s a Samoyed.”

In lieu of traditional metric trackers, the number of likes and messages garnered from each post is an accurate reflection of how well followers engage with content.

While McFadyen and Johanis are prolific social media users, the latter noted that the Canadian mortgage industry has an inexplicable aversion to online marketing.

“A lot of people don’t even have their own webpages,” said Johanis. “It’s definitely taken people a while to embrace social media, but I don’t know why that is.”

Copyright © 2019 Key Media

Homeowners not knowing enough about home insurance

Steve Randall
REP

A worrying share of Canadian homeowners may be risking serious financial consequences by not knowing enough about their home insurance.

Almost a quarter of respondents to a recent survey said they had not read their home insurance policy and 3 in 10 said the matter was like their daily commute – tedious but necessary.

Nearly 10% of respondents to the poll by belairdirect said they did not know if their home is covered for animal damage, from rodents for example.

Four-in-ten Canadians with home insurance believe their policies automatically protect all of their valuables, while only 36% believe they are covered for a sewer back-up.

Cannabis impact

Almost 1 in 5 Canadians believes they can grow pot at home without any impact on their home insurance.

Many also believe the cannabis they grow is covered by their home insurance policy but belairdirect says that the rules vary by province. The insurer has a limit on recreational cannabis products under home insurance policies in Ontario, Alberta, and British Columbia while no coverage is provided for plants growing outdoors.

Overall, 52% of respondents said they find their home insurance policy hard to understand.

Copyright © 2019 Key Media Pty Ltd

BC home sales down 11% in June

Steve Randall
Mortgage Broker News

Home sales in British Columbia continue to be constrained with a year-over-year decline to 6,960 units in June.

The 11.8% decline reported by the British Columbia Real Estate Association continues the recent trend and comes as prices ease and listings increase. Meanwhile, buyers continue to be challenged by finances.

“BC home sales moderated lower in June after a stronger showing in May,” said BCREA Deputy Chief Economist Brendon Ogmundson. “While mortgage rates offered by lenders have moved below 3%, a static qualifying rate has limited the impact of the lower cost of borrowing.”

The average MLS® residential price in the province was $687,584, a decline of 4% from June 2018. Total sales dollar volume was $4.8 billion, down 15.3% year-over-year.

Total MLS® residential active listings were up 18.6% year-over-year to 42,625 units but were essentially flat on a seasonally adjusted basis compared to May.

Year-to-date, BC residential sales dollar volume was down 23.4% to $24.5 billion, compared with the same period in 2018.

Residential unit sales decreased 18.7% to 35,679 units, while the average MLS® residential price was down 5.8% to $688,080.

Copyright © 2019 Key Media

Little change in June home sales

Steve Randall
Mortgage Broker News

After a few months of increases, Canadian home sales took a pause in June with little change from the previous month.

The latest stats from the Canadian Real Estate Association (CREA) show a 0.2% decline in sales month-over-month in June while year-over-year activity on an unadjusted basis was up 0.3%.

MLS sales had increased month-over-month in March, April, and May.

Markets were split in June with the largest gains in Quebec and Southern Ontario, while several markets saw declines including Greater Vancouver, Calgary, Halifax-Dartmouth, and Newfoundland and Labrador.

“There’s a growing divergence in Canadian housing market trends between eastern and western Canada,” said Gregory Klump, CREA’s Chief Economist. “While sales activity in Canada’s three westernmost provinces appears to have stopped deteriorating, it will be some time before supply and demand there becomes better balanced and the outlook for home prices improves.”

Listings rise, prices flat

There was a 0.8% rise in new listings in June and there was 5 months of supply, the lowest since January 2018 but nearing the long-term average of 5.3 months. The national sales-to-new listings ratio was 57.1%, down from the 57.7% posted in May.

CREA says that 80% of local markets were balanced in June, the largest share in over 3 years.

Prices were essentially flat with the seasonally adjusted Aggregate Composite MLS® HPI up 0.3% month-over-month. It was down by 0.3% year-over-year on an unadjusted basis.

Prices were flat on a month-over-month basis on Vancouver Island and in Calgary, Edmonton, Regina, Saskatoon and Moncton. Material declines were limited to the GVA (-1.3%), the Fraser Valley (0.8%) and the Okanagan Valley (-0.5%).

By contrast, monthly gains were posted in Barrie (+1.4%), Hamilton (+1.3%), Niagara (+1.2%), Guelph (+1.1%), Ottawa (+0.7%), Greater Montreal (+0.7%), the GTA (+0.6%) and Oakville (0.3%).

Copyright © 2019 Key Media

Torontonians moving to rural areas for housing

Natalka Falcomer
REM

Maybe it’s the new flight service by Porter Airlines to Muskoka or maybe it’s the smog that’s prompting Torontonians to move from the hustle and bustle of the city to set up a life in cottage country. Or maybe (and more likely) it’s the cost of a home in the city.

Some Torontonians are opting out of the market to find greener (literally) pastures in the rural parts of Ontario. The math makes sense even if you decide to buy in rural Ontario and rent in Toronto. How? Homes, and therefore mortgages, outside of our urban centres are significantly cheaper than the urban core.  As an article reported in Toronto Life, if you Airbnb your cottage when you’re caught in the city, you will more than cover your mortgage and your Toronto rent.

There are, however, some caveats and critical legal and practical issues that may affect your decision.

Short-term rentals:

If you plan to put your cottage on Airbnb, be aware of noise regulations and open fire rules and your neighbours, who may not be pleased with short-term renters partying throughout the summer months. Especially if they’re out there to relax. Zoning restrictions, and not just noise by-laws, may also be in store for parts of cottage country. And don’t forget that your insurance will be sky high because you’re not living in the cottage and because you’re renting it out.

Financing:

Some other things to consider: many banks will only permit financing if the cottage has a furnace, a heated water line from the lake during winter months and a foundation in the ground and not on cinder blocks. Also, as further described below, ensure that the roads are maintained all year and that the property has a proper septic system and clean drinking water. If not, your lender may back out at the last minute. One wonders also wonders about the impact of insurance on homes near the water due to the flooding in Muskoka … stay tuned!

Easements:

Easements and rights of way are deceptively complex legal concepts and often the cause of litigation between neighbours. The point of most easements or rights of way is to ensure that adjacent properties are accessible or that views are protected. Sometimes these easements are noted on title, while in other cases they’re granted by legislation or arise out of implication. Often when there’s nothing in writing or on title, neighbours will litigate over whether or not such access rights exist. As such, if you intend on buying a cottage that needs access to its neighbouring property or if you want to protect a view, don’t assume these rights are protected. Confirm if these rights are registered on title. If not, you may be exposing yourself to unhappy neighbours or a lawsuit.

Unregistered hydro easements:

Unregistered hydro easements can be highly problematic because they permit the hydro authorities to cut through your land and prohibit you from building on the hydro easement. Case law and Hydro One’s policy requires homeowners to be financially responsible for the maintenance of wires and poles found on or near their property. To complicate matters further, such hydro easements are not found on title! You must contact the appropriate hydro authority to determine such easements.

Waterfront improvements:

Never operate under the assumption that the existing cottage or dock on a property is in line with bylaw mandates. Take, for example, a dock. The provincial Public Lands Act and federal Fisheries Act will apply if the construction of a dock impacts both the shoreline waters and fish habitat. This means that the construction of a dock may require not only municipal approval, but also federal and provincial approvals and permits. Ensure that these permits are in place before you purchase any oasis.

Property insurance:

Proximity to a fire hall can impact the rate charged for fire insurance. Typically, insurance companies focus on whether the structure is within five miles of a responding fire hall. In certain locales, insurers may not provide coverage, given lack of adequate fire protection. Get this information before an offer goes in.

Seasonal zoning:

While you may want to escape to your cottage year-round, it doesn’t mean that this is an option. Some rural residential properties are zoned “seasonal”, which means roadways are not maintained during the winter. Apart from no access during certain seasons, you may also be on the hook to provide and pay for maintenance. Seasonal zoning means that the municipality may not provide emergency services in the wintertime, which is cause for concern if you have elderly visitors or grandchildren.

Water supply:

If the water supply for the cottage is municipally provided, you’re in luck. Unlike most cottages that are supplied by well water, you don’t have to be concerned with potability. This is because there is no reliable potability certificate for well water, or water drawn from lakes or a cistern.

Wells supplying multiple properties may be subject to the Ontario Clean Water Act, and easements for pipes from neighbouring wells (if registered) may violate the Ontario Planning Act. As always, request applicable certificates and obtain warranties from the seller that the water supply is in accordance with all federal, provincial and local regulations.

Septic:

Septic systems require approval by the municipality or the Ministry of Natural Resources. Ask the sellers for such documentation. If you plan to make any additions to the cottage that affect the septic system, you are likely required to get additional approval to satisfy regulatory requirements. If you plan to rebuild and expand the cottage you plan to buy, ensure that such growth is permissible.

© 2019 REM Real Estate Magazine

Stress test cut sales by 10 per cent

Neil Sharma
Mortgage Broker News

Without the mortgage stress test, home sales in British Columbia would have been 10% higher, claims the province’s real estate association.

In a new report analyzing B-20’s impact on the provincial housing market in 2018, the British Columbia Real Estate Association asserts the province lost out on 7,500 sales worth about $500 million in economic activity. While B.C. wasn’t the only province to experience a steep decline in sales—the entire country did—a slew of policies implemented by the provincial government, which were designed to curtail rapid price escalation, could have also caused the market to seize.

“When we look at markets across Canada, it appears that the outsized decline in B.C. may have more to do with relatively stretched affordability in B.C. compared to the rest of the country,” said the report. “Expensive markets in other areas, most notably those near Toronto, also experienced significant declines in 2018.”

Using a baseline of 90,500 B.C. home sales in 2018, BCREA estimates that there were 13,000 fewer sales in 2018 than during the previous year, but concedes “market forces such as rising interest rates, deteriorating affordability and a slowing economy” were also factors.

“Given that home sales in 2018 were 78,346, this means that factors outside of those explicitly controlled for in the model need to explain about 12,000 additional lost sales,” continued the report.

“We estimate the lost sales due to B-20 in 2018 to be a range of 5,300 to 11,500 units, with an average of 7,500 units. On average, we estimate that B-20 accounted for about 30% of the total downturn in B.C. home sales observed in 2018 and cost the province approximately $500 million in spin-off activity related to MLS home sales.”

Copyright © 2019 Key Media

Former Realtor.com VP joins Class Valuation

Candyd Mendoza
other

Class Valuation has added Vijay Taneja to its leadership team as chief data scientist to enhance the company’s collateral risk analysis platform.

Taneja has 20 years of experience in top-down data architecture and strategy. Most recently, he served as vice president at Realtor.com, where he also held various senior leadership roles at the data engineering department for seven years.

“At Class Valuation, we believe our computer vision and innovative technology suite will change the way data is utilized in our industry, going much further than traditional collateral risk and valuation models,” Class Valuation Chief Executive Office Mike Detwiler said. “By bringing Vijay on board, we will become far more sophisticated in how we think about differences in properties, running powerful analytics against a broader, more holistic data set.”

“Spending the past several years in the real estate industry, I have seen firsthand how data can be harnessed for home value analysis,” said Taneja. “No one has considered real-time data and advanced technology to create true machine learning tools that drive accuracy. Class Valuation is the only company thinking about the bigger picture, and I look forward to being a part of bringing that picture to life.”

Copyright © 2019 Key Media Pty Ltd

Appetite for environmentally-friendly homes is expected to surge

Neil Sharma
REP

Appetite for environmentally-friendly homes is expected to surge in the years ahead, but incorporating green technologies still requires outside-of-the-box thinking. 

“The next generation of buyers will flock to it,” said Tom Storey of The Storey Team with Royal LePage Signature. “The average buyer in Canada is 32 years old and the next generation is coming soon and it’s more focused on the environment than previous generations. For them, environmentally-sustainable developments will be attractive.”

But the problem is that eco-friendly developments have yet to proliferate the real estate market and, because of their cutting-edge technologies, existing ones are more expensive than standard builds.

However, Subterra Renewables is a thermal energy company that pays developers to install its technology in their buildings in lieu of conventional equipment, like natural gas boilers. In doing so, developers reduce both their greenhouse gas output and capital costs, and save residents money.

“The incentive is for developers to spend as little as possible when they’re building these things,” said Lane Theriault, president of Subterra Renewables. “We look for a way to make it a net benefit for the developer. The way to do that is, rather than putting in conventional equipment, they forego the expense of putting that in because we’re the ones who pay for our system. And because our system is so efficient, we can sell energy back to the residents at a price that’s comparable to what they would have paid if they’d used a conventional system, so everybody wins.”

Incorporating green technologies could also buy developers some grace with city planners, which could positively impact their bottom lines.

“They don’t have to spend money putting in boilers and cooling towers, so right away that expense comes off the project budget,” he said. “If the building code gets tighter, this is a way to meet the code, which is often measured in an energy efficiency number of greenhouse gas per square foot, and you spend our money to do it instead.

“The last one is around zoning and density: If you eliminate the mechanical penthouse for the conventional equipment, the city oftentimes looks very favourably on the use of renewables in the building and they’ll let you repurpose that space for an additional sellable area. In Toronto, some of these places are getting up to $1,500 per square foot, so if you can recover that 2,500 square feet of mechanical penthouse space, that’s a few million bucks.”

While Subterra pays developers to use its technology, it makes its money back on 30-year amortization payments from residents.

“We sell energy back to residents with a fixed payment, so they perfectly hedge their energy costs and know all their payments going into the future,” said Theriault. “The total cost is about equal to what they would have paid in a conventional situation.”

Copyright © 2019 Key Media Pty Ltd

Until April 1974, Ontario didn?t have a land transfer tax

Bill Johnston
REM

Until April 1974, Ontario didn’t have a land transfer tax. Then our (Conservative) government of the day gently introduced LTT to property buyers.

April 10, 1974:

• 0.3 per cent up to $35,000 and 0.6 per cent on the balance
• Average house price was $52,806
• Average LTT was $211.84

Five years later, it got worse.

April 11, 1979:

• 0.4 per cent up to $45,000, 0.8 per cent on the balance
• Average house price was $70,830
• Average LTT was $386.64

Seven years later, it got worse.

Jan. 1, 1986:

• 0.5 per cent up to $55,000, one per cent on the next $195,000 and 1.5 per cent on the balance
• Average house price was $138,925
• Average LTT was $1,114.25

Three and one-half years later, it got worse.

June 1, 1989:

• 0.5 per cent on the first $55,000, one per cent on the next $195,000, 1.5 per cent on the next $150,000 and two per cent on the balance
• Average house price was $273,698
• Average LTT was $2,580.47

Nineteen years later, it got far worse for Torontonians.

Spring 2008:

• In addition to the provincial LTT, Toronto home buyers were saddled with the Municipal LTT: 0.5 per cent on the first $55,000, one per cent on the next $345,000 and two per cent on the balance
• Average house price was $379,347
• Average LTT was $7,683.68

Nine years later, it got worse for some Torontonians.

March 2017:

• 2.5 per cent on the portion of purchase price over $2 million

Today, Toronto has by far the highest land transfer tax rates in Canada. Ball-parking the average home price today of $700,000, the average LTT is $20,200!

So, while average prices have gone up 1,325 per cent since 1974, LTT has gone up 9,528 per cent! That is seven times faster than house prices.

Keep in mind that home buyers get absolutely no benefit from paying the tax. It is simply a cash grab at a time when buyers typically are under the financial pressure that accompanies a move.

Remember too that buyers are paying the tax in after-income-tax dollars, as is the case with HST, and gas and liquor taxes.

Generally speaking, property taxes should be levied equally on the beneficiaries of municipal and provincial services. Land transfer tax is a windfall for the city and the provincial government with absolutely no benefit to the buyer who pays it.

© 2019 REM Real Estate Magazine