Home Inspections – Should REALTORS® Be There?

  For the past several years, home inspections have become an integral if not standard procedure with respect to the sale of residential real estate.  In addition, as insurers and lenders have become more selective about what properties they will or will not finance and or insure, they too often send someone out to inspect a property before making any commitment.

  The Real EstateCouncil of Ontario (RECO)  has received several questions of late regarding home inspections and who should be present during the inspection as well as how client instructions should be handled.

  First, there is no section in the Real Estate and Business Broker’s Act 2002 (the Act) that specifically requires that a REALTOR® must be in attendance at the time that a home inspection takes place. However, if a registrant has no written directions as to who will be in attendance at the time of the inspection, problems could arise that could lead to allegations of violations of specific sections of the Act.

  Here’s an example from RECO of just such a potential problem: A REALTOR® representing a seller arranges to let a home inspector into the seller’s home for the purpose of an inspection while the seller is at work. The REALTOR® representative of the seller leaves the home inspector alone in the house for three hours to attend other business. When the seller returns that evening they complain about a number of things such as mud being dragged into the home, damage to the home having occurred, or that objects have been stolen from their home.

The seller complains to RECO that their brokerage/REALTOR® representative has acted unethically because they were not looking out for the best interest of the seller and/or were not conscientious and competent in their service. According to RECO, these allegations could in fact lead to a disciplinary hearing under the Code of Ethics or any of the other remedies available to RECO under the Act.

  In response to these and other similar complaints involving home inspections where alleged conduct in contravention of the Act occurs, RECO offers these guidelines.

  In order to satisfy the Code of Ethics, REALTORS® are obligated to follow the instructions of their clients and to use their common sense in the course of trading. Both the sellers' representative and the buyers' representative should act in accordance with their clients' lawful instructions.

  In order to avoid any potential problems it would be wise for a registrant to obtain written instructions from their respective clients (buyer/seller) on how the clients would like the inspection to be conducted, (e.g. who would be in attendance and when).

  Always have written instructions regarding what will happen at a home inspection or any other service being performed in order to avoid such problems. The representation agreement with a buyer and/or seller would be a suitable document to use for this purpose.

  Keep in mind that some clients may prefer that their REALTOR® be present, although some home inspectors may prefer otherwise.  If you are there during the inspection process it may create some concerns if you become actively involved in inspection activities that are beyond your knowledge, competence or comfort level.

 I myself have always been present at home inspections that are being performed on behalf of a buyer client that I am representing.  Further, I always recommend the buyer attend as well and in most cases they have.  On some occasions I have also attended an inspection at one of my listings where the seller has requested me to attend for security purposes and or to answer any questions about the property that may arise.

  Although as licensed REALTORS® we are not technically required by law to be present at a property for home inspections, what is now being suggested is to obtain written consent from the client, buyer or especially a seller, acknowledging that our presence is not required.  

  If you have your property currently listed for sale and the need for a home and or other visitation by a non-REALTOR®  is required, make sure you cover this with your real estate representation in order to establish a protocol that makes you feel the most comfortable with whom is entering your property.

  If you have any questions or need some specific advice on this or other real estate related topics please feel free to Contact Me.   

Summer Long Weekends, Real Estate Boom or Bust?

With the somewhat cool wet weather we have been having in recent weeks it’s easy to forget we are more than halfway through June.  The Canada Day long weekend is looming on the horizon and many of those with homes to sell may be looking to their REALTORS® for open houses.

  When I first entered the real estate field many years ago, I often viewed the long weekends as ideal opportunities to hold open houses at my listings.  I’d busy myself setting a schedule of properties to show and placed ads in the local papers.  The result?  Time and time again I’d sit there, the weather outside was beautiful, no one came in and I’d say to myself what’s happening?

  After a couple of years of the same results, I came to the conclusion that when it came to long weekends in the summer, real estate was at the bottom of everyone’s agenda.  Essentially I learned that the long weekends is a time for families to enjoy the time together especially in this area where we have many recreational amenities to partake in.  Whether it’s going to the beach, hiking or biking on the area’s various trails, playing golf or whatever, real estate open houses have a lot of competition.

  As it turns out, this is not a phenomena unique to this area.  I follow the activities and blogs a couple of high profile, successful U.S. REALTORS® that I have met in recent years.  Just this past week one of them mentioned that the three slowest weekends for real estate in the U.S. are Memorial Day, the 4^th of July and Labour Day.  Having lived in the U.S. for four years I wasn’t surprised.  Memorial Day offers the Indy 500.  The 4^th of July?  Well what can I say, we all know how patriotic Americans are and the 4^th of July is typically a four day weekend.  As far as Labour Day?  It’s the end of the summer, kids are heading back to school etc. so it’s not surprising that real estate takes a back seat to these other priorities.

  If you are currently a home seller and your REALTOR® is looking to hold an open house on the upcoming July long weekend go ahead.  Far be it for me to discourage you or them but don’t be surprised if they have less than stellar attendance from the public.

Upper End Residential Property Sales

Most of us would agree that the gap between the "haves" and the "have nots" is getting larger.  Wealth seems to be getting concentrated within a smaller segment of high net worth individuals yet at the same time that segment is increasing as the middle case seemingly gets smaller.

  This social transition obviously has a profound impact on a variety of things including real estate.  Here in the southern Georgian Bay region we have witnessed over the past several years, a steady increase in the number of upper end residential properties.  Not so many years ago, a sale over $1 million was a rarity in the area that happened a couple of times a year.  More recently, the annual number of sales above $1 million is two dozen or more. 

  ReMax Canada has recently published a report on upper tier residential sales across Canada.  As with any segment of the market, upper end home sales vary greater from one area of the country to another.  Taking some of the statistics published in the ReMax data, I have prepared the attached graph which shows 1st quarter 2013 luxury home sales in major markets across the country compared to the 1st quarter of 2012.  To this I added the 1st quarter upper end property sales for the Georgian Triangle in order to see how we stack up against the rest of the nation.  In most of these centres, $750,000 and higher is the financial threshold that constitutes an "upper end" residential property and these are often properties that fall within the top 10% of that particular market's price ranges. 

  As you will note, Oakville, Hamilton/Burlington and Calgary are the current hot markets for upper end residential properties with all of these cities having 1st quarter sales that are equal to or significantly higher this year versus the 1st quarter of 2012.  Here in the Georgian Triangle, sales above $750,000 in the 1st quarter were slightly ahead of 2012 with 14 this year compared to 13 in the first three months of 2012.  Conversely, upper end 2013 residential sales activity in Toronto, Vancouver and Montreal are well off the pace of 2012, at during the 1st quarter.

  As of this posting, there are 192 properties currently listed on the MLS®

system of the Georgian Triangle Association of REALTORS® for sale in our market priced $750,000 and higher.  That represents approximately 3.5 years of inventory.  Above $1 million there are currently 117 active MLS® listings which represents 4.8 years of housing inventory in this price range.

Personally I have listed and or sold numerous properties in the upper tier segment of our market.  This is clearly a different realm of real estate and in my next posting I will summarize what I have learned when dealing with both high net worth buyers and sellers.

Area Real Estate Sales Rebound in May

  Area real estate sales in May posted some strong if not unexpected gains over May of 2012, the question remains can it be sustained?

  Unit sales for the month of May as reported through the MLS® system of the Georgian Triangle Association of REALTORS®, reflected a 7% gain over the number of properties sold one year ago. A total of 216 properties sold throughout the area in May compared to 202 in May of last year. Dollar volume for the month was $66.2 million up a healthy 20% from the $55.4 million worth of properties sold through MLS® in May 2012. The high dollar volume gain was driven by increased sales of properties priced $350,000 and higher. Four sales from $800,000 to over $1.5 million were reported in May whereas there were no sales in this price range during May of last year. 

  Year-to-date single family home sales continue to lag behind 2012. To the end of May, 545 single family MLS® home sales have been made which is a drop of 3% from the 561 single family homes sold in the first 5 months of 2012. Conversely, MLS® condominium sales total 137 units which represents an

increase of almost 4% over last year while vacant land sales which have been

lackluster for the past couple of years are up 27%.

 

  Notwithstanding the fact that year-to-date MLS® unit sales are up 3% and total dollar sales reflect a 5% increase from last year, most area municipalities are seeing individual residential sales in 2013 that are below those for the first five months of 2012. MLS® residential sales in the Blue Mountains are up 25% to the end of May while Wasaga Beach is showing just over a 2% increase. Other year-to-date sales results by municipality are as follows: Collingwood -2% Township of Clearview -5%, Municipality of Meaford -6% and Grey Highlands -30%.

 

  While there is still an abundance of properties listed for sale. The number of new MLS® listings that have come to market this year totals 2,961 individual properties, a drop of 5% over the same period last year. At the same time, the number of expired listings has increased by 4% with many sellers electing to take their properties off the market for the present time.  This has lead to more balanced market conditions overall which should continue for the balance of the year.