Toronto Real Estate and Neighbourhoods Blog | Move Smartly

Manitoba Simplifies Seller Disclose Form

Bob Aaron in Legal, Home Selling, Real Estate Trends

The seller property disclosure statement remains a hot topic in the real estate community as Manitoba has now made them compulsory, while Britain has gone in the other direction to repeal the law requiring them in every transaction.

Effective Aug. 1, 2011, the Manitoba Securities Commission has mandated that its own version of the Property Disclosure Statement must be used by real estate agents when they prepare agreements of purchase and sale.

The major difference between the disclosure form created by the Manitoba Real Estate Association and the Ontario Real Estate Association version is their length and complexity. The Manitoba form has 19 questions, the basic Ontario form has 48.

I am a devout opponent of these forms, but given a choice, I would take the Manitoba form any day.

Turf War Over Who Names Neighbourhoods

Bob Aaron in Real Estate Trends, Toronto Neighbourhoods

Toronto residents who are proud to live in areas such as Harbourfront, Davisville Village, Leslieville, Chaplin Estates, Hogg’s Hollow and Corktown are bound to be disappointed to learn that their neighbourhood names have been wiped off the map by the City of Toronto and the Toronto Real Estate Board.

This also applies to the neighbourhoods of Baby Point, Rathnelly, Brockton, Seaton Village, the Distillery District, Christie Pits and others.

The confusion arises in the wake of a decision by the Board in July to replace its old district map to simplify searching for properties on the Multiple Listing Toronto Real Estate Service (MLS) and its public site, www.realtor.ca.

As a result, there are now at least four different authoritative sources for naming and defining Toronto neighbourhoods and none of them completely agrees with any of the others.

 • The “official” Toronto neighbourhood maps are published by the City of Toronto and available on the city’s website at www.toronto.ca. According to the city’s listing, there are 140 Toronto neighbourhoods.

 • The newly adopted Toronto Real Estate Board maps are found at www.torontomls.net/BingCommunitiesMap/map.html. TREB says that there are 144 Toronto neighbourhoods. In scrapping its old district names like C11, TREB intended to use commonly known names and geographical areas, but I find it more confusing than ever.

 • In his landmark (but now out-of-print) 2003 book Your Guide to Toronto Neighbourhoods, David Dunkelman provides a detailed description of 158 Toronto neighbourhoods.

 • In my view, the most up-to-date, accurate and detailed listing is the brainchild of Toronto real estate broker John Pasalis at www.realosophy.com. Hundreds of hours of effort have gone into dividing the city up into an incredible 167 discrete areas and mapping them out. Each one shows an overview, homes for sale, home data, demographics, description and “walk score” rating.

The Realosophy terminology uses area names that are in common use by real people — not ones invented by a TREB committee or municipal bureaucrats.

Why Realosophy isn’t a Technology Company (Hint: It's All About Steve Jobs)

Urmi Desai in Realosophy News, Real Estate Trends, Entrepreneurism

Realosophy was in the Toronto Star over the weekend which was great fun. It was particularly exciting that the piece focused on our innovative business model in the context of a changing industry (it also profiled an adorable family, Realosophy clients, that found our Neighbourhood Match service very helpful to them).

In the article I’m quoted as saying that “[w]e take what we call the Steve Jobs approach — we adapt technology to solve consumer problems in real estate,” and I’ve been asked about this since. Hubris aside, it captures my belief that it’s the adaptation and application of technology to very basic (but not simple) human problems that matters – often more than the technology itself. Roger Martin of the Rotman School of Management at the University of Toronto articulates this very well in his recent post on invention (scientific R&D) vs. innovation (efforts to add value for consumers). 

While we tend to be wowed by the Googles of the world, Martin cites some Canadian examples to illustrate his point that heavy R&D and high tech isn’t behind most business success stories – Four Seasons Hotels based its model on the belief that service matters more than grand architecture, Cirque du Soleil realized that consumers were bored with the traditional circus and Harlequin standardized the number of pages in their books to lower printing costs.

The End of Realtor.ca?

John Pasalis and Urmi Desai in Real Estate Trends

If you thought Round One was interesting, Round Two will blow you away.

After reaching a settlement with the Canadian Real Estate Association (CREA) to allow flat fee/For Sale By Owner (FSBO) brokerage listings on realtor.ca, ushering in DIY home selling to Canada, the Competition Bureau now wants the Toronto Real Estate Board (TREB) to allow brokerages to publish detailed listing info on their own websites.

We find that most consumers don’t understand what this means for them, so here’s some background.

The Multiple Listing Service (MLS) is a database that real estate agents use to market homes for sale and research historical sales of properties.  Most people think realtor.ca is the MLS, but the MLS database has a lot more information about properties currently available for sale along with all historical sales info which allows agents to research the market value of a particular property. This info is currently unavailable on realtor.ca.

You may be surprised to learn that today Realosophy (a brokerage) can’t publish all detailed Toronto listing info on our website (the rich MLS database stuff). If our clients want access to this info, they need to come down to our office where we can log them into TREB’s password protected website. 

Now imagine we could give our clients and website visitors a username and password to log into our Realosophy website where they can browse all the same information that agents have access to. More importantly, we could help consumers find the info they want in a smart, fun way – the Realosophy way.

If Competition Commissioner Melanie Aitken has her way, this is exactly what Toronto’s real estate industry is going to look like soon.

In U.K., 1 in 10 Move Due to Nasty Neighbours

Bob Aaron in Real Estate Trends, Legal

At any given time, at least some of the courts in Ontario are occupied with disputes between neighbours. Based on the current law reports that come across my desk, these disputes usually involve noise, boundary disputes, weeds, garbage, animals, harassment, smoking, or parking issues.

If polite attempts fail to resolve the disputes, and the aggrieved party is unable or unwilling to look to the courts — or tried it and failed — there is always the ultimate solution to escaping nasty neighbours: move. But how many would resort to this extreme step just to get rid of neighbours?

It came as a surprise to me to read a report from Halifax Home Insurance in the U.K. last year, which concluded that more than 360,000 Britons moved home in one year due to irritating neighbours.

The study by ICM Research revealed that almost one in 10 people moved due to poor neighbour relations. In fact, this reason was cited as being a bigger motivator for relocating than being nearer to family, or a good school, or downsizing.

Who's getting rich off Rich Dad?

MoveSmartly blogger Bob Aaron was featured on CBC's Marketplace as host Erica Johnson invistigated complaints regarding "Rich Dad" real estate seminars.

View the complete episode on the Marketplace website.

Robert Kiyosaki, best-selling finance author of Rich Dad, Poor Dad, has spun-off his book into a self-help empire of TV shows, board games and investment seminars — a string of which are scheduled across Canada. But rumblings are being heard from the hundreds of hotel ballrooms across North America where Kiyoaski's Rich Dad seminars are staged. The complaints? That initial Rich Dad sessions focus less on education and more on marketing and upselling further sessions that cost up to $45,000.

Competition in the Real Estate Industry – This Entrepreneur’s Perspective

John Pasalis in Toronto Real Estate News, Real Estate Trends

In case you missed the headlines earlier this week, after a two-year investigation into Canada’s real estate brokerage industry, the Competition Bureau concluded that Multiple Listing Service (MLS) rules established by the Canadian Real Estate Association (CREA) restrict consumer choice and limit the scope of alternative business models.

To really understand what this decision means we need to step back a few years to see how this investigation started.

Several years ago, the real estate industry started to take a closer look at a new kind of discount real estate brokerage that was making its way into the market.  These new brokerages were charging sellers a flat fee to upload their property listing to the MLS, but were doing very little outside of simply posting the listing.  In many cases, the real estate agent responsible for uploading the listing hadn’t even visited their client’s house before uploading the listing to the MLS.

The industry argued that these minimum service brokerages were compromising the integrity of the MLS trademark. In 2006, CREA decided to put an end to these upstart brokerages by changing the MLS rules to set minimum services standards that all realtors must meet before uploading a listing to the MLS. These minimum service standards included:

• Inspecting the property
• Posting the listing
• Maintaining a continuous agency relationship while the contract is posted on an MLS system
• Receiving and advising on offers
• Sharing compensation by and through the listing broker

The minimum service standards CREA put in place put an end to the brokerages that were running under the minimum service discount model.  The former discount brokerage RealtySellers launched a $100 million lawsuit against CREA and the Toronto Real Estate Board for introducing rules that effectively put them out of business.

So You Want to Be a Landlord

John Pasalis in Real Estate Trends

CEP News interviewed me several weeks ago for a story about a home buyer who decided to purchase a house with a rental unit as a way to spend a little more for his home than he qualified for without the rental income.   

Income is one of the most important factors banks look at when qualifying you for a mortgage.  If you decide to purchase a home with a legal rental unit, lenders will typically take that rental income into account when qualifying you for a mortgage.  The additional income usually means that you can spend more on your home.

Even if you’re not looking to spend more on your home, buying a house with a rental unit is a great way to pay down your mortgage faster.  The additional income can cut the life of your mortgage in half.

If you are thinking of buying a house with a rental unit, here are a few things you should consider:

Twice as Many Canadians Are Buying US Properties

John in Real Estate Trends

Now we know why the real estate market is cooling in Canada; Canadians are flocking to the US to buy properties.  From today's Wall Street Journal:

...Canadians started to snap up property in the U.S., drawn by the buying power of the newly strong Canadian dollar and the depressed prices of American real estate. The largest proportion of foreign buyers of U.S. homes from May 2007 to May 2008 -- 24% -- were Canadian, double the percentage a year earlier, according to a recent report by the National Association of Realtors.

Most Canadian buyers head for the Sunbelt, with Florida accounting for a third of all of their purchases, the report said. The Realtor group estimates there were 7,200 Canadian buyers of Florida homes in the period covered by the report, more than double the 3,500 a year earlier. In some Florida resort communities, so many Quebec residents have bought second homes that French is now commonly spoken.

French speaking Canadians are so common in many condo communities that association newsletters and community announcements are all written in French and English.  But not all Americans are ready to give up their burgers and fries for baguettes, pâtés and crudités.

From the WSJ:

That bothers Ethelreda Farnsworth, a retired fashion coordinator from Pittsburgh who has spent winters at Hawaiian Gardens since 1985. She says she no longer attends events like the annual New Year's Eve celebration because she doesn't speak French and doesn't know what her neighbors are talking about. Instead, she and the remaining American residents gather for a party in her two-bedroom condo. "We feel like outsiders," she says.

Not only are American's property values plummeting, but they now feel like outsiders in their own community.  That has got to hurt.

John Pasalis is a sales associate at Prudential Properties Plus in Toronto and a founder of Realosophy. Email John

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Home Sales Rise 3.1% in the US?

John in Real Estate Trends

I read a couple of reports about US real estate sales in July that at first glance appear to be at odds.  CEP News reports that existing home sales in the US increased by 3.1% in July. 

U.S. existing home sales rose more than expected to 5.00 million units in July, a 3.1% gain in the month, following June's revised sales figure of 4.85 million. With that gain the index rebounded to the highest level in five months, although the range in the past 11 months has been relatively narrow, according to the National Association of Realtors (NAR).

Inman News reported that sales in July dropped by 13.2%.

The sales rate for of U.S. resale homes dropped 13.2 percent in July compared to the same month last year, and the national median price dropped 7.1 percent, the National Association of Realtors reported today.

So who's right?  Both. The CEP News article is referring to seasonally adjusted data from the NAR.  Seasonal adjustment is a statistical method for removing the seasonal effects on real estate sales.  When data is seasonally adjusted we can compare June sales to July sales because the seasonal factors that would normally cause one month to have more sales than the other have been eliminated.  The CEP News article is reporting that seasonally adjusted sales increased 3.2% from June to July.

The Inman News article is not using seasonally adjusted data which is why they are comparing sales in July 2008 to sales in July 2007.  In this case sales actually fell 13.2% over last year.

I personally don't focus too much of my attention on seasonally adjusted data because the data is only going to be as good as the statistical algorithm used to seasonally adjust the data.  By looking at actual sales figures I can ensure that nothing is getting lost in the seasonal adjustment. 

In the case of July's sales in the US, I think the more important story of the two is that sales were down 13.2% over last year. 

John Pasalis is a sales associate at Prudential Properties Plus in Toronto and a founder of Realosophy. Email John

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