Time to Amend the Code of Ethics ~ RECO Election 2012

Candidate Brian Madigan LL.B.

Ontario Real Estate Source


By Brian Madigan LL.B.


As many of you know, I have offered to let my name stand as a candidate for election as a Director of the Real Estate Council of Ontario for a three year term commencing in June 2012.

Let's look at an issue which I believe is topical for the 2012 election?

There are offers commonly known as “Bully offers” which present a problem for the industry. Few participants are on the winning end. As part of the process, the existing ethical obligations apparently suggest that by placing the client in a higher position than the profession as a whole, that the consumer is well-served.

To me, the result is the opposite. The consumer loses faith in the integrity of the system. Those who breach the rules are encouraged and those who follow the rules become disgruntled.

Consumers and the public understand the rule of law and the basic system of fairness. What they do not understand is the bully offer loophole.

In my view, there are times when a professional must honour a professional code of ethics first and follow the client's instructions thereafter. This occurs every day in the legal and medical professions. It is a matter that should be honoured here too.

As the real estate business moves from an "industry" to a "profession", the Professional Standards and Code of Ethics need to form the primary responsibilities of the registrants.

While it is always possible to contact a lawyer for legal advice on such matters, I would suggest that appropriate amendments to the Code of Ethics be made under the Real Estate and Business Brokers Act, 2002 be made to ensure that a professional's responsibilities are primary.

The related and important consequence would be the elimination of the bully offer loophole. This will add to the inherent integrity of the system, ensure fairness and encourage the consumer to respect the registrants and the profession.


A seller would then be able to set up rules related to the presentation of offers, and everyone would be obligated to follow those rules, without the risk that a “bully offer” might arrive earlier. There should be no breach of ethical obligations if the registrant simply followed the seller’s rules and guidelines.


Here's the political promise: if I am elected I will support the appropriate amendments to the Real Estate and Business Brokers Act, 2002, to place adherence to the Professional Code of Ethics as the primary duty of the registrants.

The effect in my view will be "increased professionalism".
Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through RE/MAX West Realty Inc., Brokerage 416-745-2300.
www.OntarioRealEstateSource.com

Brian Madigan ~ Candidate 2012 RECO Board of Directors

RECO Election 2012 ~ Region 1

Ontario Real Estate Source

By Brian Madigan LL.B.

I recently announced my candidacy for election to the Board of Directors of the Real Estate Council of Ontario (RECO) in Region 1 being "Central Ontario".

I have received a number of inquiries concerning the location of the Region 1. The three regions together are of approximately equal size.

So here they are:

REGION 1 Central Ontario

Brampton Real Estate Board

Durham Region Association of REALTORS®

Mississauga Real Estate Board
Oakville - Milton & District Real Estate Board

Orangeville & District Real Estate Board

Toronto Real Estate Board


REGION 2 Western & Southern Ontario

Brantford Regional Real Estate Association Inc.

Real Estate Board of Cambridge Inc.

Chatham-Kent Real Estate Board

REALTORS® Association of Grey Bruce Owen Sound

Guelph & District Association of REALTORS®

Huron Perth Real Estate Board

Kitchener-Waterloo Real Estate Board Inc.

London & St. Thomas Association of REALTORS®

Niagara Association of REALTORS®

REALTORS® Association of Hamilton-Burlington

Sarnia - Lambton Real Estate Board

Simcoe & District Real Estate Board

Tillsonburg District Real Estate Board

Windsor - Essex County Real Estate Board

Woodstock-Ingersoll & District Real Estate Board


REGION 3 Eastern, Northeastern & Northern Ontario

Bancroft District Real Estate Board

Barrie & District Association of REALTORS®

Cobourg - Port Hope District Real Estate Board

Cornwall & District Real Estate Board

Georgian Triangle Real Estate Board

Kawartha Lakes Real Estate Association Inc.

Kingston & Area Real Estate Association

Muskoka & Haliburton Association of REALTORS®

North Bay Real Estate Board

Orillia & District Real Estate Board

Ottawa Real Estate Board

Parry Sound Real Estate Board

Peterborough & Kawarthas Association of REALTORS®

Quinte and District Real Estate Board

Renfrew County Real Estate Board

Rideau - St. Lawrence Real Estate Board

Sault Ste. Marie Real Estate Board

Southern Georgian Bay Real Estate Association

Sudbury Real Estate Board

Thunder Bay Real Estate Board

Timmins Real Estate Board

The RECO elections for 2010 are among the most important ever held. There are a number of new and significant issues facing the industry. There will likely be more changes within the next 5 years than there have been over the last 50 years.

Registrants in all Regions are encouraged to carefully consider the candidates. Please make an informed decision and exercise your right to participate by voting for a candidate of your choice.

Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through RE/MAX West Realty Inc., Brokerage 416-745-2300.
www.OntarioRealEstateSource.com

TREB Predictions for 2012

TREB Review of 2011 and Predictions for 2012

Ontario Real Estate Source

By Brian Madigan LL.B.

The Toronto Real Estate Board just released its most recent Marketwatch, on 5 January 2012.

In essence, it says:

2011 was up 8%

2012 will be up 4%

Now, the prediction for 2012 is all guesswork. Everyone would agree with that. And, rarely would anyone be held responsible for a bad prediction.

But, let’s look at the 8% increase in 2011. It certainly doesn’t work on the January to December numbers. That would be 4.02%. So, if you want a better number, you had better use a different calculation. Have a look at the TREB report in full (below) and note the explanation for the 8%. That only works if you take all of the 2011 numbers, average them, and compare that to the similar average number for 2010.

What is the actual increase (my calculations) if you start with $411,931 at the start of 2010 and end with $451,436 at the end of 2011? It works out to 10.46%. Divide it in two (without annual compounding) and that’s 5.23% per year over that last two years.
Here’s the TREB report:

"Second-Best Year on Record for Sales

Toronto, January 5, 2012— Greater Toronto REALTORS® reported 4,718 transactions through the Toronto MLS® system in December 2011. The December result capped off the second-best year on record under the current Toronto Real Estate Board (TREB) boundaries. Total sales for 2011 amounted to 89,347 – up four per cent in comparison to 2010.

“Low borrowing costs kept Buyers confident in their ability to comfortably cover their mortgage payments along with other major housing costs,” said TREB President Richard Silver.

“If Buyers had not been constrained by a shortage of listings over the past 12 months, we would have been flirting with a new sales record in the Greater Toronto Area,” added Silver.

The average selling price in December was $451,436 – up four per cent compared to December 2010. For all of 2011, the average selling price was $465,412, an increase of eight per cent in comparison to the average of $431,276 in 2010.

“Months of inventory remained below the pre-recession norm in 2011. Very tight market conditions meant substantial competition between Buyers and strong upward pressure on selling prices,” said Jason Mercer, TREB’s Senior Manager of Market Analysis.

“TREB’s baseline forecast for 2012 is for an average price of $485,000, representing a more moderate four per cent annual rate of price growth. This baseline view is subject to a heightened degree of risk given the uncertain global economic outlook,” continued Mercer."

COMMENT

Look at the numbers and follow the trends. Prices in the GTA are increasing at about 5% per annum, year after year, and that appears to be continuing.

The ORES Real Estate Index documents that level of return over the last 7 years. Historical data also supports 5% returns in real estate over the longer term.

So, this year’s prediction by TREB at 4%, seems both conservative and realistic.


Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through Royal LePage Innovators Realty, Brokerage 905-796-8888
www.OntarioRealEstateSource.com

Toronto Condo Market in 2012

What’s Happening ~ Toronto Condo Market 2012

Ontario Real Estate Source

By Brian Madigan LL.B

Although the world is filled with pessimists and a lot of them see the Toronto condo market going bust, the facts and the figures don’t seem to support that conclusion.

There are two major driving forces behind the most active condo market in the world:

1)     net new immigration, and
2)     low interest rates.

Condo developers are just reacting to the demand. A lot of people are moving into the GTA each year, actually upwards of 100,000. They have to live somewhere!

Affordability is relatively attractive, so they are buying.

The condo lifestyle is becoming more popular. It works for several different groups:

·        New and first-time homebuyers
·        Trade up Buyers
·        Empty nesters
·        Investors
·        Out of town buyers

Each of these different and rather diversified groups will find a developer catering to their needs.

Prices of condos have kept pace with single family homes. Both have increased over the last few years at about 7% per annum. Compare that to the stock market or the return on bonds or bank accounts.

Newspapers often sponsor articles that spell the doom for the condo market but the fact of the matter is that other than a “hunch”, they don’t have any other supporting facts. The real facts seem to suggest otherwise. The Toronto condo market will be hot well into 2012.

Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through Royal LePage Innovators Realty, Brokerage 905-796-8888
www.OntarioRealEstateSource.com

Financial Resolutions for Individuals

Financial Resolutions for Individuals

Ontario Real Estate Source

By Brian Madigan LL.B.


This is the time of the year for Resolutions.

I received a some resolutions from a friend and colleague, Mr. David Predovich an Investment Advisor with TD Waterhouse at the Mississauga offices. Naturally, these are Financial Resolutions. David can be contacted through TD Waterhouse at:

905-501-8661
david.predovich@td.com

So, here’s the start, and it’s all good basic advice:

“The New Year is a time when we often reflect on the changes we need to make and create resolutions to help guide us. If you are looking for a financial-related goal, perhaps one of your commitments could be to update your estate plan. Here are some components to consider when conducting this review:

Update Your Will — A review of your Will will ensure that it is reflective of your current situation, especially if you have had significant changes in your circumstances. Make sure that you are still comfortable with your choice of estate trustee(s) and that the instructions for the distribution of your assets to the beneficiaries of your Will are reflective of your current wishes.

Don’t forget to let your trustee(s) know where the signed copy of your Will is kept for safekeeping and where they can find the contact information of your lawyer.”

Comment

This article raises five important points.

1) Up-to-date Will

Many people simply sign a Will, and because “contemplating death” is a rather unpleasant task, just leave it. Once it’s done, it’s done. But, that approach can certainly be worse than having no Will at all.

Consider Bob’s case. He was married to Harriet, divorced and has joint custody of his three year old daughter. He has now taken up residence with Marge, who has two children from a prior marriage.

His Will was signed at the time of his divorce, but his situation has changed abruptly and his intentions may not be carried out. If he marries Marge, his Will is revoked and he has no Will at all.

So, as unpleasant as it may be, this IS the time for Bob to head off to the lawyer’s office and up date his Will. Then, when he marries Marge, it will be time for him to go back and sign a new one.

2) Estate Trustee

Bob appointed Harriet as his Estate Trustee. He though that he would be dead, so Harriet would be fine, since he was leaving everything to Harriet in trust for his three year old daughter, Ruby.

Let’s rethink this situation. There is now a clear conflict if Marge is to receive anything. Perhaps Bob has someone who would be more suitable?

3) Distribution Instructions

This is the part that everyone thinks about when they contemplate signing a Will. Does it still make sense?

Now that Bob lives with Marge, should Marge receive something? And, what about her two children, now that they have become partly dependent upon Bob for support?

4) Will Location

There is really not much point to having a Will, if absolutely no one knows where it is. Or, by the time it’s actually found, your estate has been long since administered.

So, tell someone! Tell a few people. Don’t keep this a secret. Mention it to those who have a vested interest in finding it.

5) Lawyer Contact Information      

You should indicate the name of the lawyer who acted for you concerning the preparation of the Will. That lawyer may have retained the original.

Or, perhaps that lawyer knew where you intended to place it.

Do you have a safety deposit box? Is it in your name alone? Should someone else have access?

Assuming that you have no place whatsoever to place this document, it can be filed in safekeeping with the Surrogate Court. This is not a common practice but it can work for some people.

And, don’t forget, there should be copies. The disposition should not really come as a surprise to anyone. The time to offer an explanation if there would be any “hard-feelings” would be now, while you’re still alive. Explain it, and have the participants accept it, rather than be concerned about your decisions for the remainder of their lives. That’s most unfair.

Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through Royal LePage Innovators Realty, Brokerage 905-796-8888
www.OntarioRealEstateSource.com