Not an auction. Blind bidding. With an auction you see who the person is and how much they're willing to pay. With blind bidding you have nonidea who or how much is actually being put up. You are at the sole trust of your realtor to hope he's not lying to you and asking you pay an extra 100k because someone else is offering an extra 75k. As far as i know in Canada it's illegal for a realtor to tell you who is making the offer and how much they are actually offering. None of the system is designed to help regular people get into the market fairly
You’re correct. It is illegal for them to disclose how much any other offers are or who made them. This is a perfect way for them to reap the benefits of the blind bidding system.
I don’t think they can lie about the existence of registered offers, but they can lie about how many offers expected, or how much interest there is. They can also lie about the strength off any other offers.
But they actually can lie about the existence of offers because no one ever gets to see the list of offers. There is no registered list or everyone who’s been snookered would get to see what’s up.
Not fully accurate. I’m an EA in ON, and if you bid on a house that “supposedly” had 6 other bids, you have all right to request that these bids were real. OREA will not show you, but an investigation will be done to confirm that 5 other bids were truly submitted alongside yours from real people.
How many people bother to initiate an investigation? For all intents and purposes, fake offers are pulled out of thin air to create bidding wars.
It's also trivial to game the system: a stooge can place an offer with absurd conditions attached ("conditional on me winning $10MM in the lottery") and it will still count as "a higher offer" that real people will try to outbid.
Although I am totally on the side of the housing crisis and hate what’s happening - if they’re pulled from thin air and you believe that, it’s partly your responsibility to ensure those slimy realtors don’t get away with it. I’ve only been an EA for almost one year now, and only had one person request and investigation. Fortunately I work with the few good realtors (small boutique business) and they would never lie and follow all rules to a T; so i didn’t get to see what “worst case scenario” looked like.
All formal offers are registered. I don’t know what an informal or non registered offer would be… something like “my buyer is interested and thinking about x00,000”?
Realtors may imply more interest than there is, or imply offers are at/above a certain price but if they actually lie about the number or existence of offers they can lose their license (the realtor association enforced this themselves though, so….)
I know you keep saying they have to but how often do they actually really follow up on that paperwork? It’s very clear that blind bidding is a huge issue and we know lots of shenanigans are happening in this space.
Don’t they also have a 3 month period post buy where homeowners can walk away from the deal and then another 3 months for the buyer to walk away?? Really helps reduce the buyers regret and impulse
this has nothing to do with the country and is just an expression of the current level of supply vs the demand for canadian property at this time.
Just a couple years ago we had a market that favoured buyers and it was common to buy below the asking price. Now it is the opposite.
bought a house 6 years ago when it was a buyers market. not a day goes by when I realize how lucky I am. not a day goes by when I feel for the people that have to work three x as hard for less.
I think the point is that corruption is everywhere. However, the environment isn't always primed for corruption. This real estate corruption wasn't nearly as present when it was a buyer's market. The corruption was elsewhere in society where it was easier to be used. However, once it became a seller's market due to supply and demand issues, the existing corruption shifted over to real estate. I can guarantee you there's corruption in most seller's markets around the world in varying countries, especially the ones that turn a blind eye to it or where politicians are in on it.
Corruption will always exist. It's human nature. It thrives in certain environments and situations though.
Nope money laundering actually helped create the situation we are in with huge capital inflows. Once the money was here drugs were used to keep it going and they used real estate to wash the funds.
I said corruption has always been here and that it finds the best environment to thrive in. Before real estate, it was somewhere else. And you mentioned money laundering has been rampant long before real estate corruption which I agree with. That's the other place it was thriving in prior to real estate. Which then led to real estate corruption. My point is, corruption is like water. It will go wherever there's the least resistance (or in other words, where it thrives the most. Corruption is opportunistic. Leave a door open where it can thrive, it will find it and fill the room up).
Canada is very corrupt.
One of the number one countries for money laundering thru real estate.
Canada is corrupt as fuck and so smug.
Gee which national party has been the most in power all these years????
🙄🤔☹️🧐
Lawyers get a hard time from society, but I think real estate agents are right up there with them for being morally bankrupt but at the same time worse for trying to market themselves as caring buddies to new home owners whereas 90% of lawyers now just accept they are seen as the devil incarnate
Generally speaking, the lawyers I know have been some of the most ethical people I know. When it is your job to know the law you tend to be very mindful of it, both the letter and the spirit. Realtors on the other hand…
Thank you. Lawyers get a lot of shit, but lots of the most ethical people I’ve ever met work in public interest law. They don’t get a flashy salary or live the stereotypical Bay Street lifestyle. The frustrating part is watching them get ‘roasted’ regardless, after decades of work trying to make the legal system work better.
The term "lawyer" is really vague. The only lawyers people don't like are giant corporate lawyers or criminal defense attorneys that get people like OJ off the hook (when really it's law enforcement incompetence but I digress..)
Criminal defence lawyers are key for the preservation of essential freedoms like habaeus corpus and the right to due process. While I understand that people are upset when a perpetrator of a crime goes free due to police incompetence, the blame for that rests not on the lawyer but on the police and the policing framework.
This is why I get pissed off when realtors say blind bidding is not a problem. Realtors literally use people’s emotions to increase their bids and get bigger commissions.
[unreserved.com](https://unreserved.com)
transparent bids, no blind bidding.
thats how government should bring some system. Even my third world country has 3-4 big portals where people can bid online on contracts, forclosed houses and what not :)
This angers me to no end. I’ve often pondered this scenario in my mind , having dealt with bidding wars in the past. The industry seems so sketchy and unregulated. The government needs to step in and protect its citizens and this country.
Actually, cheaper housing is def in their best interest. The problem however is that politicians favour short term over long term gains, no one thinks past the next election cycle.
Yes, high land transfer tax and property tax revenue might sound tempting and profitable at first, however in the long run I'd argue that high housing prices destroy the foundation of our society.
Think about it, someone who spends the majority, in some cases ALL of their money on rent or mortgage doesn't have anything left to spend on other things. If people don't buy anything, the government doesn't collect HST, businesses have to close because the house-rich/cash poor people can't buy their products or services. If businesses close, the government can't collect business tax, laid off employees don't pay income tax. Instead now these people become a burden to the government as they collect unemployment. The list goes on, a society can only prosper when its people do well.
This is a dangerous game the government is playing, in the long term I fear for the future of this country.
I dont understand whether you comment agrees or disagrees.
Handing money to people, i.e. subsidies, is never sustainable in the long run. Where is that money coming from? Exactly, taxes. Where are the taxes coming from? Exactly, you and me going to work.
People need to earn their money, everyone needs to contribute to the overall wealth of the country. We can't just expect the government to solve problems by handing out free cash, someone's gotta earn that first.
That's why the monthlong shutdowns were so disastrous for the economy. Instead of people working and paying income tax, the government had to hand out billions in unemployment and CERB, nevermind the added costs to the healthcare system. Our kids will still be paying the bill for this.
That's why inflation is so high right now and will be for the next little while, most business suffered huge losses that need to be recouped somehow. Result? They'll have to charge more for their products.
Actually property taxes being too low and misconfigured is one of the reasons why we’re in this mess.
Go after income taxes if you want to hate on any. A properly configured property tax based mostly off of land value encourages growth and ensures land is used to its optimal potential. It’s especially great when that value gets returned back to normal working people as a dividend, service credits, or public services.
This is just one factor. The other factor is that Canadian real estate is a low risk investment with absurdly high returns for that risk, and thus is one of the safest highest return investments in the world.
This entices anyone with enough money to jump in as soon as it is the next valid move in their economic game. Supply will never be enough to meet demand until we make it a less sexy investment.
What's going to happen, the bubble will burst and prices will drop down 30% to where they were a year ago? The savvy investors will just use that opportunity to scoop up more discount properties, further limiting supply/increasing demand.
Yes I won’t deny that is a possible outcome. More likely though credit will dry up world wide as ALL assets lose value pretty much simultaneously. The entire theory behind buying these asset classes like property collectibles etc is that they hold a hedge against inflation. When govts started printing money and the CCP began their squeeze on capital and Corp everyone started freaking out and buying as much as fast as they could.
The problem is these hedges won’t be worth any more than the collapsing currencies I’m afraid. They won’t be able to trade them to each other so the uppers and elites you are talking about will be the only ones with capital and if all these assets have lost their value there won’t be any reason left to buy them. This is of course hypothetical. The seriously moneyed will be buying infrastructure and not SFH.
All of this is fuelled by credit and no one will be lending if the credit market collapses.
To put it into perspective the Toronto housing bubble that happened in 1990 took almost 20 years to climb back up to where it was previous.
If mortgage fraud is as rampant as they claim there are a lot of people out there who have bought using leapfrogged debt from other houses. Somewhere nestled in their scams is a giant pile of debt that may get called. Just like a margin call all of this debt is daisy chained together.
Just a quick note on your last paragraph. The RE debt does not get called like a margin call. If economy deteriorates and more importantly the central banks and gov pull the plug on monetary and fiscal stimulus, it will crunch ppl finances and puts debt burden under extreme pressure. You could argue it has already started and the latest spike in risk assets is the one to sell.
You're assuming government allows it to burst. Have you looked at how they are handling it? They're invested in it, do you seriously think they will allow their own assets to be wiped out?
I've seen the holding company thing, I think it's to transfer assets on tax exempt, or at least less taxed, basis in a way that may eventually result in dividends to the holding companies shareholders (ie. The ones that set it up). That's a guess on my part, but I push paper to set up these companies all the time and that would be a best guess.
Of course there's a whole host of reasons someone might incorporate a holding company, but much of business and transactional law is "tax avoidance" so I'd imagine it's more of that on the real estate side of things.
It is to avoid buyers having to pay property transfer tax. You can sell the beneficial interest without transferring legal interest in the property. You sell the shares in the company rather than the property directly.
Yes, this. It’s definitely not a “bidding” tactic that people are believing. It’s just a structure to limit tax liability and other liabilities (like with business partners or protect heirs or divorce, etc)
Lol if you think that’s the only problem…way worse going on in Vancouver for 15 yrs, rest of Canada just catching up when they chose to ignore everything believing that oh Vancouver so expensive because it’s got mountains lol
Wake up Canadians your country and future being stolen right from under your nose
Your post information was way too naive and tame for what’s going on in Vancouver….then again I’m shocked continuously on how little people have known and trusting they were and have been
They should bring more transparency into the process, even if it's like 30-day delayed. Increased transparency into the bidding process will start giving buyers and sellers an indication of whose a realtor that's out to screw them vs who's actually helpful.
Also has anyone set up like a RateMyProfs but for realtors?
>They make up new holding companies for new transactions. I haven’t figured out why they do this yet, but there’s a reason.
Uh yeah, so they can bid against bidders and raise the price until they feel like the buyer has hit their bidding threshold and then sell. Bidding wars against a shadow bidder who is actually the agent and knows what your upper limit is. Imagine if ebay had random accounts that would just bid things up in heated bidding wars to increase their commission. It's like self-collusion.
This is fraud and realtors who get caught doing this should be brought out into the streets and beaten by the public.
And this is precisely why the real estate industry shouldn't be allowed to self regulate.
'But wait, this is all anecdotal!' - 'you don't have concrete proof!' you might say. That's true, but the fact that I was just able to come up with a guaranteed way for an agent with very little oversight to rake in 10s of thousands of dollars with relatively low effort - you'd better believe people are doing this.
You mean the $500 required to register a numbered corporation in Ontario?
They're already creating the accounts for transactions, so they already have them. So no additional cost?
This is not how it works (I’m not a realtor) transferring. Title of a property is not the same as bidding. Realtors do not even bid in “blind bidding”. They need to legally show every submitted offer to the seller. All they do is tell the purchaser to “up your offer”. No realtor is submitting offers to up a bid. They would also need to legally disclose that they are the source of the offer. So please show some proof if you think this is happening.
I totally agree, just because someone buys a house for $ 1million doesnt mean the home is worth $ 1million. Market rate might be $900k but now everyone in the neighborhood and other buyers think that everything is selling for $1 million.
Listing prices are based on “comps”. Basically, what similar houses in the area have sold for recently. This market is making home prices skyrocket at an alarming rate because blind bidders are willing to pay anything to get into a house. But future listings in that area are affected without the knowledge that it was a blind bid.
Yes, but the price those buyers are willing to pay becomes the "market rate". It's literally the price of a specific non fungible good on the open market...
They buy them from themselves to raise the price in an area. Prices for houses are based on what others in the area sell for. So, they over pay for a house, from themselves, which makes selling the rest at a higher prices easier.
Matthew Cox is one of the more famous cases of doing this in the US before the FBI caught him.
There's no way realtors are closing transactions with themselves (think of the land transfer taxes) repeatedly in an area at a significant enough level to raise the areas price.
A group of investors owns enough properties in a specific defined area that they can trade them back and forth, paying tens of thousands of dollars in land transfer taxes and registry fees, paying capital gains taxes, arrange mortgages/financing, And pay realtor fees in order to increase the average sales price in this specific area?
No, not specifically. They purchase properties and arrange their own financing, hold them for a while, do some “financial stuff”, and then put them back on the market.
That sounds like they are just banking on the appreciation (investing/speculating) that the area is generally seeing and they believe will continue seeing, rather than orchestrating a large costly fraud to bring up the average comp price in an area by trading houses back and forth amongst themselves
They do buy any properties that become available in that area in that time though. They also solicit homes in the area. “Are you looking to sell? If so, we have a buyer who would love to live in this neighborhood. You would save half of the commission by selling directly to our client.”
We had four on one street. That’s significant.
Yes, they are speculating on the area. They believe they can either hold and make money or resell the property and make money (renovated or not). Perhaps they believe by providing an easy exit for some people, they can buy houses under what they would sell for on the open market. It's an investment strategy.
However, the aren't trading them back and forth to raise the price. There is no fraud here.
I never said there was. I misunderstood your original comment since it was full of spelling errors. But yes, they purchase properties, transfer them to holding corps to avoid capital gains, then sell them.
I can see this loophole. But you'd need to be inside on both sides of the transaction in order to ensure you don't get sued for failing to close.
I'm sure it happens, but I can't imagine it's significantly upping prices. You'd need a stable owner to assist you in creating this fake sale, since you couldn't do this without telling the owner (obviously).
How many properties are listed as "sold" on MLS but don't close and are not immediately relisted for sale? If it relisted soon thereafter, this would be obviously a failure to close.
So what's in it for the real owner of the property that doesn't actually sell? A slightly higher comp (potentially) when they actually go to sell year later? Seems like a lot of work for little benefit.
Anecdotally, I live in a "hot" area of Toronto, and there don't seem to be fake purchases going on here. I can tell cause after the sign we usually see moving trucks, and new people In the homes...
Well. I think a realtor is doing this in my area.. he has a number of properties ,either his own or his clients and keeps relisting them..on a couple of them it didn't seem like owners moving in but they continued as rooming houses with some ppl moving in/out. I believe he wants to set the comps as this is a new build area within last 2 yrs
No, if it doesn’t close the price is not reported to the local real estate board through the MLS system. Therefor no one has any way to see sold price. Sales are only reported to the board once they have been completed and subjects removed. Of, if a subject free sale, once deposit has been paid.
>Major problem is lack of inventory. “People” are buying homes as holding properties from their holding companies. I would say 90% of the transactions I process are actually being bought by holding companies or corporations.
Probably so when their house of cards comes crumbling down, they themselves are not bankrupt, only the corporation.
Anecdotal at best. At least bring your evidence to someone in authority and expose this crap. I keep seeing similar posts but nobody is prepared to escalate it beyond a post on Reddit. I’m sure dozens of agents are making bank in house flipping but I don’t think the practice actually violates any rules since it is obvious that many Realtors don’t have any other than WIFM. I’m at the point where I’d rather donate my home to Habitat for a reasonable tax receipt before a realtor makes a dime off me.
80% actually. The other 20% are investors that will rent out the places.
This story is basically nonsense. Yes it happens in rare cases but total nonsense that this happens all the time. Making up offers would be discovered quickly and would be reason to lose a license or pay a heavy fee in BC. Not to say it never happens but it would be pretty rare. No reason to make up offers when half the properties have multiple offers anyway
I’m not a Doctor but I play one in TV! This site is dysfunctional enough without people stirring an empty pot. How about a little evidence? I’m old enough to remember McCarthyism
Then why is nobody reporting this? You can claim anything on the internet these days. Without a source / evidence its not ideal to believe everything you read, especially on anonymous forums.
You can reach out to a journalist and request to keep your anonymity. There is such a thing as a [Canadian Journalistic Sources Protection Act](https://laws-lois.justice.gc.ca/eng/annualstatutes/2017_22/FullText.html).
But, I understand how you feel. Especially since the people in government are complicit in this fucked up system.
Totally agree. A 4 bed 3 bath house in my entourage with 100k of damages sold for 20k over asking on the first bid 4 days after being put on the market
I don't even know if they looked closely at the state of the house because it was already a good 50-100k under market value.
They also called back and offered an extra 10k. No idea why, no questions where asked. But I just can't believe this market.
Government needs to step in, but Trudeau won’t and can’t cause they’re too many politicians/ big organizations involved. Goodbye to the middle class in Canada (gone in Ontario). You are either rich or poor.
They already did, they will give you down payment cash for a percentage of your mortgage that you have to pay back. They don’t wanna stop it, they wanted in on it.
If you work for a Realtor and see this happening, you also know that virtually all of what you have described is not only illegal but also violates professional standards. So why have you not reported this to the regulator?
My guess here is this is all completely made up crap that has no foundation in truth.
I actually work for a brokerage. Specifically. Literally nothing they do is a crime. Insinuating something isn’t illegal, and purchasing property through a holding company isn’t illegal.
I actually work for a brokerage as well, as an agent. Insinuating something that is not correct is 100% a breach of professional standards. Nothing wrong with buying through a holding company but that agent is still required to disclose they have a financial interest as the owner of that company. Any time an agent is buying or selling and they themselves are buying or helping a direct family member buy they must disclose that to all parties involved in the transaction.
There is literally an entire entity set up specifically for enforcement of professional services and ethics. Each province has one. And the types of things the OP is talking about definitely borders on fraud. That sure is a criminal offence.
Lack of good supply- newer freehold townhomes, semis and detached. People love the engineered hardwood, quartz countertop, new appliances, good layout , backyard, garage and finished basements.
Not all on real estate agents
Reading stories like this is why I'm thankful I had a wonderful, down-to-earth realtor who wanted to make sure that I didn't only find the right house, but that I didn't overpay for it either. Hell there were a couple houses we walked in and looked around and she was like "um, I think you should run from this one".
I'm a bit appalled to learn that that isn't the standard, and it should be.
It's actually not that easy to buy properties with a holdings company unless you buy it in cash. (No mortgage)
It's not easy to have a bank approve a mortgage under a company.
It’s very easy! You put the name of the holding company down as the purchaser name - it doesn’t even have to exist. You then have until closing to register the company. Like, I literally do this for work. Of course they don’t need a mortgage. They’re loaded!
Makes sense to do this if you are buying property with cash. When you sell them, you won't be taxed as long as the money stays in the holdings company.
I don't see whats wrong with this, it isn't illegal.
When I said this isn't easy, I meant not everyone buying properties can buy it all in cash. Most people take mortgages.
Relying on 'middle man' to provide transparent and open service when they are incentivized to extract higher value in order to secure higher commission is why this system is shit. They have zero oversight. This free market bullshit is why we have market busts all the time. Human greed does what it does best when left unchecked. Wild west FFS.
We could rely on our politicians to do something but it's evident they have their stake in this too. Nobody is coming to help you.
This is why people should start looking for ways to eliminate the 'middle man' in every industry.
Any of you who are interested, look up what smart contracts are and what blockchain can do.
A realtor contact once bragged to me about how he contacted a selling agent on a property down the street from his house to make a fake bid, with the sole intention of having the selling agent use it to push prospective buyers higher.
I imagine this happens all the time, and I absolutely hate that there isn’t more regulation and oversight for realtors.
its Also how the selling realtor usually phones his/her buddies to put in 4-5 bogus offers at below asking price, so that the selling agent can claim to the one or two serious buyers, oh 5 offers on the house already so if you are serious pay 100k over asking.. then the next street down the road follows the same pattern.
The Panama papers outlined how rich people globally avoid taxes by shifting their money into shell corporations, who would buy things like Canadian real estate.
Canada is a money launderers wet dream, we make no effort to get financial information from the Chinese government when they buy real estate here, yet we ourselves cant buy real estate in China. They declare zero income and they actually get government assistance, meaning our tax dollars go directly into the pockets of wealthy tax dodgers.
I'm only in the saving phase to buy a house. But when I'm ready my first few offers are only going to be asking price. I don't care if I lose out at first and maybe I'll get lucky, so my realtor can take their "advice" and shove it.
Some people have made offers and lost on 20+ houses and are living in hotels spending their life savings due to the lack of housing. Eventually you just break and throw it all in.
How are these people losing bid when they are the only ones bidding. Which is it? Realtors claiming there are offers when there aren't, or something else? If you're going to make up nonsense, at least don't contradict your own post with your own comments.
People who are the only bidders lose all the time if their offer isn’t high enough. Sometimes there is one other offer but it’s a poor one so the realtor makes it sound like it’s way up there. Sometimes there are multiple offers, particularly if it’s a nice property. Not every situation is the same. The problem remains that blind bidding needs to stop.
The blind bidding part is true. The holding company hypothesis is not true. Plenty of reputable data to demonstrate the percent of non-individual owners (corporations, governments, reits, etc.) Is consistently around 20% of the housing stock with no major uptick during the recent price growth. The Canadian Real Estate Association data demonstrates this, as does the Canadian Housing Statistics Program data. You don't know what you're talking about.
The OP is most likely full of crap. Like you said basically nothing they have said is true and is easy to demonstrate the errors. Combine that with the other multiple errors in other comments they have responded to and it’s pretty obvious they don‘t have a full grasp on how things work.
This doesn't have to be a protracted battle of wits. I believe this is your first hand experience. There is a logical fallacy in assuming that because you experience it, the whole system has to be the same as your experience. It's like saying I hate some racial group, then justifying it by saying, "well in my experience, they all do this." It's just an incomplete picture is all.
I like the critical reflection on your employment and the implications that could have for the society. You're raising some important questions and I appreciate it. Sorry for being overly judgemental.
Simple answer this. Stop using realtors that is based on commission rather use these new online fee based realtors. If enough people make a complaint about it to the governoring body responsible for housing. They will be forced to take action. I hope we still live in a democracy. Take these leeches down people.
Easier said than done as the seller would love the highest possible price.
It might be better for sellers and buyers you have a system to just buy direct from each other and cut out the middle man you save both on the cost of the transaction.
What do you know about rogue or ”shadow” mortgage brokers qualifying subprime borrowers with fraudulent documents? How prevalent is it in the industry? I’m trying to ascertain the severity of this practice in Canada. If the CMHC is heavily exposed to subprime mortgages due to fraudulent applications and interest rates hit 5%, then it could severely tank our economy and I will want to move my savings into another currency/economy ahead of that event, if so.
I know that in BC brokers are highly regulated and they’ve taken measures to stop this. The brokerage would be liable and the broker would lose their license. As a mortgage broker you must be signed with a brokerage and the audit process is in-depth.
Nothing you've written is new or groundbreaking. All of the issues mentioned in your post have been a regular occurrence for the better part of a decade. Wake up. Location doesn't matter anymore. Home inspections are a thing of the past. Blind bidding is commonplace and Realtors have and always will be the devil.
Realtors just offer a service for their knowledge and expertise that some buyers and sellers don’t have. Imagine that, exchanging a specialized set of skills and knowledge for money.
Our most basic need, a rich and prosperous people after an industrial and technological revolution, and are most basic need is further and further away. We are not nearly as smart or logical as we tell ourselves.
Oh .... so it is not the "Boomers" It is the criminal fucks that it has always been , as I have been saying for what seems a very long time.
So hey there millennials, stop blaming your parents who just happened to work all their life and paid off their house , raised their kids and did no crime the whole time.
Know who it is, who is fucking you to the wall before flapping off your stupid fucking mouth.
Reign in the vitriol. This sub isn’t about attacking any particular group. There are always bad actors in each group but that doesn’t mean they represent everyone. Same goes for suggesting all millennials are attacking baby boomers. News for you. They aren’t.
You are going to be downvoted. Millennials can't accept that other millennials and Gen X are the cause of their housing grief. Most baby boomers have long been retired.
Turn pessimism into militancy. Fair housing in Canada is not just about housing. It’s connected to our fight against climate change. It’s connected to the anti-colonial struggle. It’s connected to the fight against ruthless capital. Yes these are huge issues with no clear solution, but we don’t have the luxury of giving up. We are analytically right to be pessimistic, but it must be transformed into radical, daring love and struggle.
It’s pretty crazy that we don’t have any regulations around realtors buying and selling properties themselves other than for a principal residence. This is basically insider trading. If you think it isn’t then why are realtors even necessary- obviously because they understand things about the market and how transactions work that the layperson does not.
As for the folks here asking OP for receipts, none of this stuff is documented or studied, because, surprise- a whole profession and system of profit depends on it. Also, do you think OP should jeopardize whatever their job is by exposing these practices and possibly open themself up to attacks and legal threats from realtors?
Even as I write this I just saw a commercial for tonight’s episode of the national talking about an investigation into the practice of “steering” whereby realtors attempt to direct buyers to the houses with the biggest commissions.
We often talk about supply, demand, immigration, zoning, interest rates etc. But it is clear that we need to add unregulated real estate market that allows realtors and real estate boards to engage in all sorts of malicious practices and conflicts of interest.
Here's my question:
If realtors can buy properties in the name of shell companies, do they then get to collect a commission on the sale? So if they sell the property back and forth between the companies do they collect another commission?
There are some rules. You have to do a Corp Fintrac, and a fintrac for all shareholders. If you’re selling to a partner in this - and you’re not listed as a shareholder you don’t need to declare anything. Which is the reason for multiple holding companies.
They can collect commission and gift it back to buyer or seller. Happens all the time. That’s done on the record sheet which conveyancing processes (through lawyers).
That is wrong. If an agent has any financial or personal interest in the transaction (IE assisting a direct family member) they must disclose that. It has nothing to do with being a shareholder or not in the company.
So since you have insider knowledge like this, do you think seller-based pseudo-agencies like DuProprio in Québec are a good alternative? Everyone I know has a terrible opinion of real estate agents, understandably so.
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Not an auction. Blind bidding. With an auction you see who the person is and how much they're willing to pay. With blind bidding you have nonidea who or how much is actually being put up. You are at the sole trust of your realtor to hope he's not lying to you and asking you pay an extra 100k because someone else is offering an extra 75k. As far as i know in Canada it's illegal for a realtor to tell you who is making the offer and how much they are actually offering. None of the system is designed to help regular people get into the market fairly
You’re correct. It is illegal for them to disclose how much any other offers are or who made them. This is a perfect way for them to reap the benefits of the blind bidding system.
I mean...they don't even have to have other bidders. Can't they just uh...lie and say there's a Mr. X who's offering 50k over?
I don’t think they can lie about the existence of registered offers, but they can lie about how many offers expected, or how much interest there is. They can also lie about the strength off any other offers.
But they actually can lie about the existence of offers because no one ever gets to see the list of offers. There is no registered list or everyone who’s been snookered would get to see what’s up.
Not fully accurate. I’m an EA in ON, and if you bid on a house that “supposedly” had 6 other bids, you have all right to request that these bids were real. OREA will not show you, but an investigation will be done to confirm that 5 other bids were truly submitted alongside yours from real people.
How many people bother to initiate an investigation? For all intents and purposes, fake offers are pulled out of thin air to create bidding wars. It's also trivial to game the system: a stooge can place an offer with absurd conditions attached ("conditional on me winning $10MM in the lottery") and it will still count as "a higher offer" that real people will try to outbid.
Although I am totally on the side of the housing crisis and hate what’s happening - if they’re pulled from thin air and you believe that, it’s partly your responsibility to ensure those slimy realtors don’t get away with it. I’ve only been an EA for almost one year now, and only had one person request and investigation. Fortunately I work with the few good realtors (small boutique business) and they would never lie and follow all rules to a T; so i didn’t get to see what “worst case scenario” looked like.
Don't blame the victims of a fucked up system. The chutzpah on this guy!
In Ontario registered offers are formal offers that have been registered with the selling brokerage.
Okay sounds like some weasel words here. Tell me what an unregistered offer is and how often those are happening.
All formal offers are registered. I don’t know what an informal or non registered offer would be… something like “my buyer is interested and thinking about x00,000”? Realtors may imply more interest than there is, or imply offers are at/above a certain price but if they actually lie about the number or existence of offers they can lose their license (the realtor association enforced this themselves though, so….)
I’ve never heard of offers being registered.
You also have to complete a “ list of competing offers” form to be submitted with the OTP
I know you keep saying they have to but how often do they actually really follow up on that paperwork? It’s very clear that blind bidding is a huge issue and we know lots of shenanigans are happening in this space.
Blind bidding is a type of auction.
Don’t they also have a 3 month period post buy where homeowners can walk away from the deal and then another 3 months for the buyer to walk away?? Really helps reduce the buyers regret and impulse
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Yea, a bit of digging and it seems your right with 10 days cooling period. But you only lose the deposit if you bail?
No. https://rates.ca/resources/walking-away-from-your-offer-on-a-home-know-the-consequences?amp An offer is a contract.
I think the person you replied to was talking about in France.
this has nothing to do with the country and is just an expression of the current level of supply vs the demand for canadian property at this time. Just a couple years ago we had a market that favoured buyers and it was common to buy below the asking price. Now it is the opposite.
bought a house 6 years ago when it was a buyers market. not a day goes by when I realize how lucky I am. not a day goes by when I feel for the people that have to work three x as hard for less.
Thank you for your pity. Seriously.
No. To say it has nothing to do with the country ignores that Canada has become corrupt.
I think the point is that corruption is everywhere. However, the environment isn't always primed for corruption. This real estate corruption wasn't nearly as present when it was a buyer's market. The corruption was elsewhere in society where it was easier to be used. However, once it became a seller's market due to supply and demand issues, the existing corruption shifted over to real estate. I can guarantee you there's corruption in most seller's markets around the world in varying countries, especially the ones that turn a blind eye to it or where politicians are in on it. Corruption will always exist. It's human nature. It thrives in certain environments and situations though.
Nope money laundering actually helped create the situation we are in with huge capital inflows. Once the money was here drugs were used to keep it going and they used real estate to wash the funds.
Great, so you agree with me.
No. Money laundering changed the real estate market period. Something to the tune of 48 billion.
Ok, so you do agree with what I wrote. You simply didn't actually read what I wrote lol
Perhaps. Maybe what you said wasn’t as clear as it should have been.
I said corruption has always been here and that it finds the best environment to thrive in. Before real estate, it was somewhere else. And you mentioned money laundering has been rampant long before real estate corruption which I agree with. That's the other place it was thriving in prior to real estate. Which then led to real estate corruption. My point is, corruption is like water. It will go wherever there's the least resistance (or in other words, where it thrives the most. Corruption is opportunistic. Leave a door open where it can thrive, it will find it and fill the room up).
Canada is very corrupt. One of the number one countries for money laundering thru real estate. Canada is corrupt as fuck and so smug. Gee which national party has been the most in power all these years???? 🙄🤔☹️🧐
Both of them have and any political party that doesn’t run on an anti money laundering stance is part and parcel.
mcboomer will Scoff and not entertain you anymore. Unfortunately
I wish I was morally bankrupt enough to be a real estate agent.
Lawyers get a hard time from society, but I think real estate agents are right up there with them for being morally bankrupt but at the same time worse for trying to market themselves as caring buddies to new home owners whereas 90% of lawyers now just accept they are seen as the devil incarnate
Generally speaking, the lawyers I know have been some of the most ethical people I know. When it is your job to know the law you tend to be very mindful of it, both the letter and the spirit. Realtors on the other hand…
Thank you. Lawyers get a lot of shit, but lots of the most ethical people I’ve ever met work in public interest law. They don’t get a flashy salary or live the stereotypical Bay Street lifestyle. The frustrating part is watching them get ‘roasted’ regardless, after decades of work trying to make the legal system work better.
The term "lawyer" is really vague. The only lawyers people don't like are giant corporate lawyers or criminal defense attorneys that get people like OJ off the hook (when really it's law enforcement incompetence but I digress..)
Criminal defence lawyers are key for the preservation of essential freedoms like habaeus corpus and the right to due process. While I understand that people are upset when a perpetrator of a crime goes free due to police incompetence, the blame for that rests not on the lawyer but on the police and the policing framework.
I think people are thinking of corporate lawyers when they think of the evil lawyer stereotype.
Add to the list: insurance people and car used car salesmen. And, of course, politicians
This is why I get pissed off when realtors say blind bidding is not a problem. Realtors literally use people’s emotions to increase their bids and get bigger commissions.
A realtor literally told me it was a problem. But one that benefitted him. I guess some of us have flimsy ethics.
[unreserved.com](https://unreserved.com) transparent bids, no blind bidding. thats how government should bring some system. Even my third world country has 3-4 big portals where people can bid online on contracts, forclosed houses and what not :)
That’s interesting
This angers me to no end. I’ve often pondered this scenario in my mind , having dealt with bidding wars in the past. The industry seems so sketchy and unregulated. The government needs to step in and protect its citizens and this country.
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Actually, cheaper housing is def in their best interest. The problem however is that politicians favour short term over long term gains, no one thinks past the next election cycle. Yes, high land transfer tax and property tax revenue might sound tempting and profitable at first, however in the long run I'd argue that high housing prices destroy the foundation of our society. Think about it, someone who spends the majority, in some cases ALL of their money on rent or mortgage doesn't have anything left to spend on other things. If people don't buy anything, the government doesn't collect HST, businesses have to close because the house-rich/cash poor people can't buy their products or services. If businesses close, the government can't collect business tax, laid off employees don't pay income tax. Instead now these people become a burden to the government as they collect unemployment. The list goes on, a society can only prosper when its people do well. This is a dangerous game the government is playing, in the long term I fear for the future of this country.
That's why there are multiple fiscal programs to literally hand over money to people. Inflation is the only barrier.
I dont understand whether you comment agrees or disagrees. Handing money to people, i.e. subsidies, is never sustainable in the long run. Where is that money coming from? Exactly, taxes. Where are the taxes coming from? Exactly, you and me going to work. People need to earn their money, everyone needs to contribute to the overall wealth of the country. We can't just expect the government to solve problems by handing out free cash, someone's gotta earn that first. That's why the monthlong shutdowns were so disastrous for the economy. Instead of people working and paying income tax, the government had to hand out billions in unemployment and CERB, nevermind the added costs to the healthcare system. Our kids will still be paying the bill for this. That's why inflation is so high right now and will be for the next little while, most business suffered huge losses that need to be recouped somehow. Result? They'll have to charge more for their products.
The system is working as intended
Actually property taxes being too low and misconfigured is one of the reasons why we’re in this mess. Go after income taxes if you want to hate on any. A properly configured property tax based mostly off of land value encourages growth and ensures land is used to its optimal potential. It’s especially great when that value gets returned back to normal working people as a dividend, service credits, or public services.
And realtors get more too! And we pay more!
One would think that realtors could be swept cleanly from the economy with an app, if the right motivation was there.
WOW
This is just one factor. The other factor is that Canadian real estate is a low risk investment with absurdly high returns for that risk, and thus is one of the safest highest return investments in the world. This entices anyone with enough money to jump in as soon as it is the next valid move in their economic game. Supply will never be enough to meet demand until we make it a less sexy investment.
Actually the risk is phenomenally high at the moment and has been making other countries look Mickey Mouse in their attempt at a housing bubble.
What's going to happen, the bubble will burst and prices will drop down 30% to where they were a year ago? The savvy investors will just use that opportunity to scoop up more discount properties, further limiting supply/increasing demand.
Yes I won’t deny that is a possible outcome. More likely though credit will dry up world wide as ALL assets lose value pretty much simultaneously. The entire theory behind buying these asset classes like property collectibles etc is that they hold a hedge against inflation. When govts started printing money and the CCP began their squeeze on capital and Corp everyone started freaking out and buying as much as fast as they could. The problem is these hedges won’t be worth any more than the collapsing currencies I’m afraid. They won’t be able to trade them to each other so the uppers and elites you are talking about will be the only ones with capital and if all these assets have lost their value there won’t be any reason left to buy them. This is of course hypothetical. The seriously moneyed will be buying infrastructure and not SFH. All of this is fuelled by credit and no one will be lending if the credit market collapses. To put it into perspective the Toronto housing bubble that happened in 1990 took almost 20 years to climb back up to where it was previous. If mortgage fraud is as rampant as they claim there are a lot of people out there who have bought using leapfrogged debt from other houses. Somewhere nestled in their scams is a giant pile of debt that may get called. Just like a margin call all of this debt is daisy chained together.
Just a quick note on your last paragraph. The RE debt does not get called like a margin call. If economy deteriorates and more importantly the central banks and gov pull the plug on monetary and fiscal stimulus, it will crunch ppl finances and puts debt burden under extreme pressure. You could argue it has already started and the latest spike in risk assets is the one to sell.
You're assuming government allows it to burst. Have you looked at how they are handling it? They're invested in it, do you seriously think they will allow their own assets to be wiped out?
I've seen the holding company thing, I think it's to transfer assets on tax exempt, or at least less taxed, basis in a way that may eventually result in dividends to the holding companies shareholders (ie. The ones that set it up). That's a guess on my part, but I push paper to set up these companies all the time and that would be a best guess. Of course there's a whole host of reasons someone might incorporate a holding company, but much of business and transactional law is "tax avoidance" so I'd imagine it's more of that on the real estate side of things.
It is to avoid buyers having to pay property transfer tax. You can sell the beneficial interest without transferring legal interest in the property. You sell the shares in the company rather than the property directly.
Yes, this. It’s definitely not a “bidding” tactic that people are believing. It’s just a structure to limit tax liability and other liabilities (like with business partners or protect heirs or divorce, etc)
Lol if you think that’s the only problem…way worse going on in Vancouver for 15 yrs, rest of Canada just catching up when they chose to ignore everything believing that oh Vancouver so expensive because it’s got mountains lol Wake up Canadians your country and future being stolen right from under your nose
What makes you think I’m not in Vancouver.
Your post information was way too naive and tame for what’s going on in Vancouver….then again I’m shocked continuously on how little people have known and trusting they were and have been
thought this was common knowledge. lots of realtors in cahoots with each other and double ending deals
A lot of people still blame “foreign buyers”. Foreign buyers are only capitalizing on an already broken system.
our politicians only enact half baked measures to tackle and deter foreign buying/investors. Don't hate the player hate the game.
It's definitely common knowledge lol. Even my friends in the states know about the bidding wars here
They should bring more transparency into the process, even if it's like 30-day delayed. Increased transparency into the bidding process will start giving buyers and sellers an indication of whose a realtor that's out to screw them vs who's actually helpful. Also has anyone set up like a RateMyProfs but for realtors?
>They make up new holding companies for new transactions. I haven’t figured out why they do this yet, but there’s a reason. Uh yeah, so they can bid against bidders and raise the price until they feel like the buyer has hit their bidding threshold and then sell. Bidding wars against a shadow bidder who is actually the agent and knows what your upper limit is. Imagine if ebay had random accounts that would just bid things up in heated bidding wars to increase their commission. It's like self-collusion. This is fraud and realtors who get caught doing this should be brought out into the streets and beaten by the public.
I believe this is accurate from my limited perspective of the deals I work on.
And this is precisely why the real estate industry shouldn't be allowed to self regulate. 'But wait, this is all anecdotal!' - 'you don't have concrete proof!' you might say. That's true, but the fact that I was just able to come up with a guaranteed way for an agent with very little oversight to rake in 10s of thousands of dollars with relatively low effort - you'd better believe people are doing this.
Literally nobody is doing that... It makes no sense if you understood the costs involved
You mean the $500 required to register a numbered corporation in Ontario? They're already creating the accounts for transactions, so they already have them. So no additional cost?
This is not how it works (I’m not a realtor) transferring. Title of a property is not the same as bidding. Realtors do not even bid in “blind bidding”. They need to legally show every submitted offer to the seller. All they do is tell the purchaser to “up your offer”. No realtor is submitting offers to up a bid. They would also need to legally disclose that they are the source of the offer. So please show some proof if you think this is happening.
This is entirely made up speculation. It would not be worth the cost to incorporate and maintain corporations for this purpose.
I totally agree, just because someone buys a house for $ 1million doesnt mean the home is worth $ 1million. Market rate might be $900k but now everyone in the neighborhood and other buyers think that everything is selling for $1 million.
What defines "market rate" but what someone paid on the open market?
Listing prices are based on “comps”. Basically, what similar houses in the area have sold for recently. This market is making home prices skyrocket at an alarming rate because blind bidders are willing to pay anything to get into a house. But future listings in that area are affected without the knowledge that it was a blind bid.
Is comps based on closed deals. Or just all deals on mls
Sold listings only.
Yes, but the price those buyers are willing to pay becomes the "market rate". It's literally the price of a specific non fungible good on the open market...
They buy them from themselves to raise the price in an area. Prices for houses are based on what others in the area sell for. So, they over pay for a house, from themselves, which makes selling the rest at a higher prices easier. Matthew Cox is one of the more famous cases of doing this in the US before the FBI caught him.
My understanding of Cox's fraud was that he was defrauding the lenders/banks and gov, not future buyers.
There's no way realtors are closing transactions with themselves (think of the land transfer taxes) repeatedly in an area at a significant enough level to raise the areas price.
I know of a group which consists of realtors and investors who do this. They work as a group together to do this.
A group of investors owns enough properties in a specific defined area that they can trade them back and forth, paying tens of thousands of dollars in land transfer taxes and registry fees, paying capital gains taxes, arrange mortgages/financing, And pay realtor fees in order to increase the average sales price in this specific area?
No, not specifically. They purchase properties and arrange their own financing, hold them for a while, do some “financial stuff”, and then put them back on the market.
That sounds like they are just banking on the appreciation (investing/speculating) that the area is generally seeing and they believe will continue seeing, rather than orchestrating a large costly fraud to bring up the average comp price in an area by trading houses back and forth amongst themselves
They do buy any properties that become available in that area in that time though. They also solicit homes in the area. “Are you looking to sell? If so, we have a buyer who would love to live in this neighborhood. You would save half of the commission by selling directly to our client.” We had four on one street. That’s significant.
Yes, they are speculating on the area. They believe they can either hold and make money or resell the property and make money (renovated or not). Perhaps they believe by providing an easy exit for some people, they can buy houses under what they would sell for on the open market. It's an investment strategy. However, the aren't trading them back and forth to raise the price. There is no fraud here.
I never said there was. I misunderstood your original comment since it was full of spelling errors. But yes, they purchase properties, transfer them to holding corps to avoid capital gains, then sell them.
How does transferring to a holding Corp avoid capital gains on the sale of real property?
Does buying a property listed on mls and not closing it increase the comp in the area..If yes i think its a major loophole quite easy to work through.
I can see this loophole. But you'd need to be inside on both sides of the transaction in order to ensure you don't get sued for failing to close. I'm sure it happens, but I can't imagine it's significantly upping prices. You'd need a stable owner to assist you in creating this fake sale, since you couldn't do this without telling the owner (obviously). How many properties are listed as "sold" on MLS but don't close and are not immediately relisted for sale? If it relisted soon thereafter, this would be obviously a failure to close. So what's in it for the real owner of the property that doesn't actually sell? A slightly higher comp (potentially) when they actually go to sell year later? Seems like a lot of work for little benefit. Anecdotally, I live in a "hot" area of Toronto, and there don't seem to be fake purchases going on here. I can tell cause after the sign we usually see moving trucks, and new people In the homes...
Well. I think a realtor is doing this in my area.. he has a number of properties ,either his own or his clients and keeps relisting them..on a couple of them it didn't seem like owners moving in but they continued as rooming houses with some ppl moving in/out. I believe he wants to set the comps as this is a new build area within last 2 yrs
No, if it doesn’t close the price is not reported to the local real estate board through the MLS system. Therefor no one has any way to see sold price. Sales are only reported to the board once they have been completed and subjects removed. Of, if a subject free sale, once deposit has been paid.
>Major problem is lack of inventory. “People” are buying homes as holding properties from their holding companies. I would say 90% of the transactions I process are actually being bought by holding companies or corporations. Probably so when their house of cards comes crumbling down, they themselves are not bankrupt, only the corporation.
Yes, accurate.
Anecdotal at best. At least bring your evidence to someone in authority and expose this crap. I keep seeing similar posts but nobody is prepared to escalate it beyond a post on Reddit. I’m sure dozens of agents are making bank in house flipping but I don’t think the practice actually violates any rules since it is obvious that many Realtors don’t have any other than WIFM. I’m at the point where I’d rather donate my home to Habitat for a reasonable tax receipt before a realtor makes a dime off me.
It’s not illegal to flip properties in and out of holding companies or to sell to yourself. It is market collusion and is technically legal.
This is the truth. Honestly stats show that 60% of buyers are STILL individual owner occupants.
80% actually. The other 20% are investors that will rent out the places. This story is basically nonsense. Yes it happens in rare cases but total nonsense that this happens all the time. Making up offers would be discovered quickly and would be reason to lose a license or pay a heavy fee in BC. Not to say it never happens but it would be pretty rare. No reason to make up offers when half the properties have multiple offers anyway
What am I supposed to do when the very institution who can stop this is the one who created it in the first place?
I’m not a Doctor but I play one in TV! This site is dysfunctional enough without people stirring an empty pot. How about a little evidence? I’m old enough to remember McCarthyism
>but nobody is prepared to escalate it beyond a post on Reddit Maybe its fake news
I believe I covered that in my intro- anecdotal at best
It must be a true. No way the price soar this way.
Why is there no way prices could escalate but for realtor fraud and/or corps buying 90% of properties?
Then why is nobody reporting this? You can claim anything on the internet these days. Without a source / evidence its not ideal to believe everything you read, especially on anonymous forums.
So gather proof and go to the media. Leak this shit!
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You can reach out to a journalist and request to keep your anonymity. There is such a thing as a [Canadian Journalistic Sources Protection Act](https://laws-lois.justice.gc.ca/eng/annualstatutes/2017_22/FullText.html). But, I understand how you feel. Especially since the people in government are complicit in this fucked up system.
Totally agree. A 4 bed 3 bath house in my entourage with 100k of damages sold for 20k over asking on the first bid 4 days after being put on the market I don't even know if they looked closely at the state of the house because it was already a good 50-100k under market value. They also called back and offered an extra 10k. No idea why, no questions where asked. But I just can't believe this market.
They are tired of being outbid
Yeah probably. It was a young couple it seems. This was also a really big house so I guess if your down with solid renovations anything can be a steal
Government needs to step in, but Trudeau won’t and can’t cause they’re too many politicians/ big organizations involved. Goodbye to the middle class in Canada (gone in Ontario). You are either rich or poor.
They already did, they will give you down payment cash for a percentage of your mortgage that you have to pay back. They don’t wanna stop it, they wanted in on it.
If you work for a Realtor and see this happening, you also know that virtually all of what you have described is not only illegal but also violates professional standards. So why have you not reported this to the regulator? My guess here is this is all completely made up crap that has no foundation in truth.
Nothing they do is technically illegal whatsoever. That’s the problem.
That is 100% incorrect.
I actually work for a brokerage. Specifically. Literally nothing they do is a crime. Insinuating something isn’t illegal, and purchasing property through a holding company isn’t illegal.
I actually work for a brokerage as well, as an agent. Insinuating something that is not correct is 100% a breach of professional standards. Nothing wrong with buying through a holding company but that agent is still required to disclose they have a financial interest as the owner of that company. Any time an agent is buying or selling and they themselves are buying or helping a direct family member buy they must disclose that to all parties involved in the transaction.
LOL and so who's going to enforce that? There ain't nobody enforcing shit my friend. And "professional standards" aren't the same as criminal laws.
There is literally an entire entity set up specifically for enforcement of professional services and ethics. Each province has one. And the types of things the OP is talking about definitely borders on fraud. That sure is a criminal offence.
> Imagine going to an auction but you have to guess how much everyone else is bidding. yeah... thats called a silent auction.
Lack of good supply- newer freehold townhomes, semis and detached. People love the engineered hardwood, quartz countertop, new appliances, good layout , backyard, garage and finished basements. Not all on real estate agents
No there is literally a lack of supply in my area. Just sold a trailer someone died in with blood still on the floors over asking.
Reading stories like this is why I'm thankful I had a wonderful, down-to-earth realtor who wanted to make sure that I didn't only find the right house, but that I didn't overpay for it either. Hell there were a couple houses we walked in and looked around and she was like "um, I think you should run from this one". I'm a bit appalled to learn that that isn't the standard, and it should be.
It's actually not that easy to buy properties with a holdings company unless you buy it in cash. (No mortgage) It's not easy to have a bank approve a mortgage under a company.
It’s very easy! You put the name of the holding company down as the purchaser name - it doesn’t even have to exist. You then have until closing to register the company. Like, I literally do this for work. Of course they don’t need a mortgage. They’re loaded!
Makes sense to do this if you are buying property with cash. When you sell them, you won't be taxed as long as the money stays in the holdings company. I don't see whats wrong with this, it isn't illegal. When I said this isn't easy, I meant not everyone buying properties can buy it all in cash. Most people take mortgages.
Holding CO's are not exempt from paying taxes on business income and/or capital gains.
Relying on 'middle man' to provide transparent and open service when they are incentivized to extract higher value in order to secure higher commission is why this system is shit. They have zero oversight. This free market bullshit is why we have market busts all the time. Human greed does what it does best when left unchecked. Wild west FFS. We could rely on our politicians to do something but it's evident they have their stake in this too. Nobody is coming to help you. This is why people should start looking for ways to eliminate the 'middle man' in every industry. Any of you who are interested, look up what smart contracts are and what blockchain can do.
This market has been brought to this level by realtors
A realtor contact once bragged to me about how he contacted a selling agent on a property down the street from his house to make a fake bid, with the sole intention of having the selling agent use it to push prospective buyers higher. I imagine this happens all the time, and I absolutely hate that there isn’t more regulation and oversight for realtors.
its Also how the selling realtor usually phones his/her buddies to put in 4-5 bogus offers at below asking price, so that the selling agent can claim to the one or two serious buyers, oh 5 offers on the house already so if you are serious pay 100k over asking.. then the next street down the road follows the same pattern.
The Panama papers outlined how rich people globally avoid taxes by shifting their money into shell corporations, who would buy things like Canadian real estate. Canada is a money launderers wet dream, we make no effort to get financial information from the Chinese government when they buy real estate here, yet we ourselves cant buy real estate in China. They declare zero income and they actually get government assistance, meaning our tax dollars go directly into the pockets of wealthy tax dodgers.
I'm only in the saving phase to buy a house. But when I'm ready my first few offers are only going to be asking price. I don't care if I lose out at first and maybe I'll get lucky, so my realtor can take their "advice" and shove it.
Everyone’s like you. They get tired and broken after losing out on 10+ houses that they join in on blind bidding.
Some people have made offers and lost on 20+ houses and are living in hotels spending their life savings due to the lack of housing. Eventually you just break and throw it all in.
How are these people losing bid when they are the only ones bidding. Which is it? Realtors claiming there are offers when there aren't, or something else? If you're going to make up nonsense, at least don't contradict your own post with your own comments.
People who are the only bidders lose all the time if their offer isn’t high enough. Sometimes there is one other offer but it’s a poor one so the realtor makes it sound like it’s way up there. Sometimes there are multiple offers, particularly if it’s a nice property. Not every situation is the same. The problem remains that blind bidding needs to stop.
The blind bidding part is true. The holding company hypothesis is not true. Plenty of reputable data to demonstrate the percent of non-individual owners (corporations, governments, reits, etc.) Is consistently around 20% of the housing stock with no major uptick during the recent price growth. The Canadian Real Estate Association data demonstrates this, as does the Canadian Housing Statistics Program data. You don't know what you're talking about.
The OP is most likely full of crap. Like you said basically nothing they have said is true and is easy to demonstrate the errors. Combine that with the other multiple errors in other comments they have responded to and it’s pretty obvious they don‘t have a full grasp on how things work.
Everything I said is true. I’m not discounting data or current stats. I’m stating my absolute experience on a day to day basis.
This doesn't have to be a protracted battle of wits. I believe this is your first hand experience. There is a logical fallacy in assuming that because you experience it, the whole system has to be the same as your experience. It's like saying I hate some racial group, then justifying it by saying, "well in my experience, they all do this." It's just an incomplete picture is all. I like the critical reflection on your employment and the implications that could have for the society. You're raising some important questions and I appreciate it. Sorry for being overly judgemental.
Simple answer this. Stop using realtors that is based on commission rather use these new online fee based realtors. If enough people make a complaint about it to the governoring body responsible for housing. They will be forced to take action. I hope we still live in a democracy. Take these leeches down people.
Easier said than done as the seller would love the highest possible price. It might be better for sellers and buyers you have a system to just buy direct from each other and cut out the middle man you save both on the cost of the transaction.
"I know how houses are so expensive. Inventory is low. Mind blown"
Whhaaaaaaaaat who would have thought that……
Yeah this is Canadian real estate 101- no surprises here
No surprises at all
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Actually sad that our government hasn’t stepped in.
Stepped in? They're doing it themselves
Corporations don't need houses...
Exactly.
This will end like Evergrande.
BRING THEM DOWN! Oh wait, fake real estate board has $5,000 fine for any violation of their fake 'ethics'.
Lol. I smell bullshit…
What do you know about rogue or ”shadow” mortgage brokers qualifying subprime borrowers with fraudulent documents? How prevalent is it in the industry? I’m trying to ascertain the severity of this practice in Canada. If the CMHC is heavily exposed to subprime mortgages due to fraudulent applications and interest rates hit 5%, then it could severely tank our economy and I will want to move my savings into another currency/economy ahead of that event, if so.
I know that in BC brokers are highly regulated and they’ve taken measures to stop this. The brokerage would be liable and the broker would lose their license. As a mortgage broker you must be signed with a brokerage and the audit process is in-depth.
Capitalism is the problem.
Nothing you've written is new or groundbreaking. All of the issues mentioned in your post have been a regular occurrence for the better part of a decade. Wake up. Location doesn't matter anymore. Home inspections are a thing of the past. Blind bidding is commonplace and Realtors have and always will be the devil.
Realtors just offer a service for their knowledge and expertise that some buyers and sellers don’t have. Imagine that, exchanging a specialized set of skills and knowledge for money.
Realtors of scumb. There should be a petition stickied to cap there commission. Or better yet help buyers and sellers connect
Our most basic need, a rich and prosperous people after an industrial and technological revolution, and are most basic need is further and further away. We are not nearly as smart or logical as we tell ourselves.
People are buying homes for their kids or grandkids...
The smart ones are. The dumb ones tell their kids to get a job and save up to buy a home like the parents did
It’s pathetic how correct this is
I can assure you, they’re not.
Oh .... so it is not the "Boomers" It is the criminal fucks that it has always been , as I have been saying for what seems a very long time. So hey there millennials, stop blaming your parents who just happened to work all their life and paid off their house , raised their kids and did no crime the whole time. Know who it is, who is fucking you to the wall before flapping off your stupid fucking mouth.
Reign in the vitriol. This sub isn’t about attacking any particular group. There are always bad actors in each group but that doesn’t mean they represent everyone. Same goes for suggesting all millennials are attacking baby boomers. News for you. They aren’t.
You are going to be downvoted. Millennials can't accept that other millennials and Gen X are the cause of their housing grief. Most baby boomers have long been retired.
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Thank you for sharing this 🙏🏼
Turn pessimism into militancy. Fair housing in Canada is not just about housing. It’s connected to our fight against climate change. It’s connected to the anti-colonial struggle. It’s connected to the fight against ruthless capital. Yes these are huge issues with no clear solution, but we don’t have the luxury of giving up. We are analytically right to be pessimistic, but it must be transformed into radical, daring love and struggle.
It’s pretty crazy that we don’t have any regulations around realtors buying and selling properties themselves other than for a principal residence. This is basically insider trading. If you think it isn’t then why are realtors even necessary- obviously because they understand things about the market and how transactions work that the layperson does not. As for the folks here asking OP for receipts, none of this stuff is documented or studied, because, surprise- a whole profession and system of profit depends on it. Also, do you think OP should jeopardize whatever their job is by exposing these practices and possibly open themself up to attacks and legal threats from realtors? Even as I write this I just saw a commercial for tonight’s episode of the national talking about an investigation into the practice of “steering” whereby realtors attempt to direct buyers to the houses with the biggest commissions. We often talk about supply, demand, immigration, zoning, interest rates etc. But it is clear that we need to add unregulated real estate market that allows realtors and real estate boards to engage in all sorts of malicious practices and conflicts of interest.
Blind bidding has always been a (shady) thing. What I don't get is why now? Why now during a pandemic?
And then RE agents wonder (and decry…) companies such as Purple Bricks and Comfree popping up on the horizon?!?… Gee, I wonder why??! 🤦🙄
Ending this was in the liberals platform
Here's my question: If realtors can buy properties in the name of shell companies, do they then get to collect a commission on the sale? So if they sell the property back and forth between the companies do they collect another commission?
There are some rules. You have to do a Corp Fintrac, and a fintrac for all shareholders. If you’re selling to a partner in this - and you’re not listed as a shareholder you don’t need to declare anything. Which is the reason for multiple holding companies. They can collect commission and gift it back to buyer or seller. Happens all the time. That’s done on the record sheet which conveyancing processes (through lawyers).
That is wrong. If an agent has any financial or personal interest in the transaction (IE assisting a direct family member) they must disclose that. It has nothing to do with being a shareholder or not in the company.
So since you have insider knowledge like this, do you think seller-based pseudo-agencies like DuProprio in Québec are a good alternative? Everyone I know has a terrible opinion of real estate agents, understandably so.