Change is in the Air | Issue 181 Guelph Weekly Sales Report
November 22, 2019 Sales Summary:
Change is in the Air
The last update to the legislation that governs how real estate is sold in Ontario was in 2002. A lot of water has passed under that bridge called the Real Estate and Business Brokers Act. The update is long overdue and from our corner it’s a welcome update. The current legislation is in need of modernizing, to best address how much the industry has changed since 2002. The internet and the ready access to vast amounts of information are just two reasons among many why the legislation needs an update.
The new act, called the Trust in Real Estate Services Act, will address and modernize the rules for real estate brokerages and the 86,000 registered sales representatives throughout the province.
The highlights of the proposed legislation include:
More choice and enhanced disclosure that will permit brokerages and salespeople to disclose (more) details of competing offers at the seller’s choice.
Improve the code of ethics that govern real estate professionals and brokerages. This legislation will also update the powers of the Registrar to impose higher fines and the ability to revoke or suspend the registrations of those professionals that violate the code of ethics.
Give the Registrar authority to require brokerages and professionals to provide transaction data to support risk-based enforcement.
Give real estate professionals the ability to incorporate and be paid through the corporation and still maintain high levels of consumer protection.
Update regulations and streamline some of the regulatory procedures.
Update language to make it more consistent with other laws.
The government spent the first quarter of the year in consultation with consumers, industry professionals, and other stakeholders in order to determine what will best serve the consumers and the industry. Over 7,000 responses were recorded, of which 39% came from consumers.
Some of the key findings show that consumers feel the amount of disclosure around offers, and in particular multiple offers, needs to be addressed. In addition, the industry identified that it wanted the Registrar to have enhanced powers to penalize professionals that violate the Act and the code of ethics.
In my opinion, if all this updated legislation does is make it easier to identify and remove the registrants that are unethical and clearly not acting in the best interests of the consumer, then it will be mission accomplished. You might recall over the past couple of years there were some high profile real estate salespeople that were found to have violated our code of ethics and taken advantage of consumers. In one case, it took years for the government to revoke that agent's license. In the most recent case, a paltry fine was issued and that Realtor is still trading despite the damage caused.
The interesting proposed amendment will be the disclosure of the offer details at the seller’s option. There have been a lot of questions around multiple offers and consumers rightly feel disadvantaged when trying to purchase a home and competing with other buyers at the same time. The more transparency we can bring to the buying and selling process while being fair to all parties in the transaction, the easier it will be for the consumer to have confidence in our market and system.
We’ll be following this legislation throughout the process and look forward to the positive changes it will help bring forward.
LAST WEEK IN THE GUELPH MARKET
Despite the cold and wet, the market kept up the pace with 45 homes reported sold - that's 2 more than last year.
Of those 45 homes sold, 14 or 31% sold at or above the list price. Compared to the previous year when 17 or 39.5% sold above list.
The median house looked like the following:
3 beds, 2 baths, 1,347 square feet and sold for $518,000 or $367.10/sqft. The median home took 22 days to sell, 2 more days than the same week last year. Sellers were able to negotiate 97.94% of their original list price.
While the number of homes sold and the sales price was up from 2018, the time it took to sell was slightly longer (2 days) and sellers received a lower proportion of their list price (97.94% vs 99.18% in 2018). Not a huge amount of difference between the two weeks on those metrics. There was a $28,000 difference in sales price between the two weeks, which amounts to a 5.7% increase in price.
Our takeaway? Situation normal. The sales price differential is what we’ve tracked and predicted for this year. This kind of price growth is in line with the historical numbers for our market. We’ll start to see these numbers slow even more over the next 12 weeks as we enter into the winter doldrums. Keep in mind that many sellers are now consulting and investigating which brokerages they will be listing their homes with in the coming spring market and will be in the pre-listing stage. Now is a good time for buyers to be scouting the remaining inventory for good homes that have been forgotten in the marketplace. These homes are or were overpriced, or didn’t appeal aesthetically to buyers. One of our buyers was recently able to pick up one of these properties at 96% of the list price vs the norm of 99%, and that $20K saving will pay for a lot of flooring when this buyer moves in!
If you’re looking for the opportunities in our marketplace, you owe it to yourself to have a consultation with one of our team members.
Enjoy the weekend & thanks for reading.
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