Blog

The Ontario Real Estate Market Can Sometimes be the Wild West

It was back in early July when we first wrote about the problem of “phantom bidding,” an issue that Garry Marr of The Financial Post, described as a scam involving sales agents hinting to prospective buyers there are other bids, as a way to coax them to bid higher. Starting on July 1, the Real Estate Council of Ontario stated that they will be enforcing new rules in order to address the problem. The new rules will make it so that brokerages keep an offer, or an equivalent summary, on record for one year. A brokerage cannot suggest or imply that the home sellers have an offer unless it can be shown in writing.

As it turns out, phantom bidding is not the only suspicious activity currently being investigated in the Ontario real estate market. Jamie Sturgeon, Consumer Affairs Reporter at Global News, sheds light on an issue involving mortgage brokers and the issuing of fraudulent home loans. Gerald Soloway, chief executive of Home Capital (the largest non-bank mortgage lender in the country), said on a conference call Thursday, that after an internal review showed that several dozen independent brokers it did business with lied about customers’ income levels to get home loans approved, that they immediately alerted authorities. The brokers in question originated roughly $1 billion in home loans primarily in Ontario before being cut off by the lender between September and March of this year.

Most recently, the provincial government has been considering revising the laws that govern condominium living in Ontario. The province has over 1.3 million residents living in condos, and it wants to try and balance the scales so that condo owners have more rights to battle condominium boards and property management. According to Tamsin McMahon of The Globe and Mail, the plan is to compel condo boards to be more transparent about their finances to owners and prospective buyers, require mandatory education for condo directors and create two new condo authorities, one that will license and regulate the province’s 2,500 property managers, along with a tribunal that will resolve disputes between condo boards and owners.

And finally, CBC News recently reported a cautionary tale, involving Tom Mason from Orangeville, Ontario. Having very little luck, even in the rental market, Mason decided to post an ad on Kijiji, to which he received a quick reply from a rental property owner named Richard.  Richard’s offer was for $1,000 a month to rent a home that he had initially listed for sale after relocating to Iowa. He now wanted to rent it because, he said, the home had failed to attract a buyer after several months on the market. Mason admitted later that he thought the offer was too good to be true, and suspicion arose when Richard asked for a wire money transfer soon after, which raised red flags. Mason contacted the real estate agent who had the listing, only to discover that Richard was not the true owner. Shawn McIntyre, a community relations manager at Kijiji, stated that this is an example of how buyers should meet with a seller in person before making a deal.