Century 21 Awards

The Federal Budget 2009 and REALTORS®

2009 Canadian Federal Budget is out. Announced by the Federal Conservatives and Stephen Harper’s minority government, we have all seen what the “Budget Fallout” has been. From the New Foundland Premier’s comments about Prime Minister Stephen Harper, to the official opposition Liberal party leader Michael Ignatieff’s press briefing and to NDP leader Jack Layton’s allegation of Harper and Ignatieff’s “new coalition”.

But what does the Federal Budget mean for the REALTORS® and the Canadian real estate consumer.

It could be said that the lobbying efforts of REALTORS® have achieved significant victories. In particular, the expanding the RRSP Homebuyers’ Plan to make it more useful for homebuyers is a significant step forward. The federal budget proposes to increase the withdrawal limit for first-time homebuyers using the Homebuyers Plan from $20,000 to $25,000 (per individual). Under this program, first-time homebuyers are allowed to withdraw funds from their RRSP, tax-free, to put towards the down payment on a home. Amounts withdrawn under the Home Buyer’s Plan must be repaid over a 15-year period, starting the second year following the year of the withdrawal.

Since 1992, an estimated 2 million Canadians have used the Home Buyers’ Plan to purchase approximately 900,000 homes, making this program a huge success. Unfortunately, as time has passed, the usefulness of this program eroded because withdrawal limits were not adjusted.

Under the first time home buyer’s tax credit, the Budget proposes a 15 per cent credit that would be applied to a $5,000 amount, and would provide up to $750 in tax relief to reduce costs associated with first home purchases. This will assist the first-time home buyers with the costs related to the purchase of a home such as legal fees, land transfer taxes, etc. An individual will be considered a first-time home buyer if neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the calendar year of the home purchase or in any of the four preceding calendar years.

The Budget also proposes a 15 per cent Home Renovation Tax Credit, to be claimed on the portion of eligible home renovation expenditures exceeding $1,000, but not more than $10,000, meaning that the maximum tax credit that can be received is $1,350. This will apply to eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009 and before February 1, 2010, pursuant to agreements entered into after January 27, 2009. Credit can be claimed on eligible expenditures incurred on one or more of an individual’s eligible dwellings, including houses, cottages, and condominium units owned for personal use.

Renovation costs for projects such as finishing a basement or re-modelling a kitchen will be eligible for the credit, along with associated expenses such as building permits, professional services, equipment rentals and incidental expenses. Routine repairs and maintenance will not qualify for the credit. Nor will the cost of purchasing furniture, appliances, audio-visual electronics or construction equipment.

Additional information on the Home Renovation Tax Credit will soon be available on Canada Revenue Agency’s website at www.cra-arc.gc.ca

All of this will of course only become a reality if the budget passes the vote in the House of Commons. Let’s see how it unfolds.

Real Estate and Prospecting

OK, I do this thing at my office where I am asked to meet and train the REALTORS who are interested in furthering their real estate careers. They have made me the Team Leader for what we call "The Residential Club"; that is, all the REALTORS who wish to transact in residential real estate market belong to this club.

I have been thinking for some time that I have to write something about prospecting but our office manager has done an excellent job in summarising this all evasive concept of prospecting in to the minutes of the meeting that I held at our office.

So, read on and enjoy....

January 21, 2009

Dear Brokers / Salespersons,

A BIG THANK YOU to all our STARS who attended the Residential Meeting on Tuesday, January 20, 2009 hosted by Mr. Jagdeep Singh – Gold Award Winner of 2008. We are very happy with the response and your participation. Stars who want to be successful in their career will always make time to update themselves.

The topic of 1ST RESIDENTIAL CLUB MEETING was “Prospecting & Time Management”– Prioritize your “TO DO” list daily. As informed earlier, we need to prioritize ourselves what steps we need to take in order to increase our sales. Also give yourself a deadline when you want it completed. Everyone is busy doing what they are doing but to run a business successfully you are obliged to dedicate time and effort to what you want to be. What is prospecting?. Prospects are all around you, wherever you work, dine or enjoy.

Prospecting happens only when you yourself are dedicated to your business and be consistent in what you do. Just look around yourself and see what other people do or READ books about successful people to find out the clues to successful marketing. News are for you to listen but don’t get involved. Get yourself updated first before you answer your clients. Your confidence is what they test. How you present yourself and show your knowledge, greater your prospecting will be. You can’t specialize in everything but decide to become a specialist in what you do for your living.

This business is just like any other business, be creative and think of ways to reach out to community. Good or bad times life goes on. Keep Positive attitude and positive things will happen. Want to take a day off, do volunteer work or join a group that helps community or maybe sponsor teams, that makes you a good person in public’s eyes and establishes trust. When the need comes, they will think of you first. Leave something valuable with them that’s got your information on it e.g. Pen, Diaries, Measuring Tape, Letter Opener e.t.c. anything that’s basic and person would keep it. These things linger around everybody’s house. Now you have made your way into homes or people you have left good impression on. Always smile and be courteous because we talk to those who we are comfortable with and that’s what we teach our kids. “Don’t talk to Strangers” but Mr. Singh emphasized on how to make people comfortable around you. Some tricks of the trade as well. Mr. Singh related all examples to his personal experiences and made team realize what they can achieve through communication. Mr. Jagdeep Singh shared with his team members how he distinguishes himself from the people he interacts with during the course of day and how he relates to them. This is Prospecting.

Please note, prospecting is not done with every person we meet during the day, for this we have to rely on our own judgment and instincts to whom and how we relate. Mr. Jagdeep Singh informed various ways to capture the market. The best way to do, is to break the ice and present ourselves to the people we meet. That is the best net working one can do. We can also go one step further and start advertising/marketing through flyers, pens, community service, volunteering, advertising. There are lots to choose from, but it all comes back to us. Are you ready to take this step?

It was a delight to see our salespersons participating in the discussions, asking questions, sharing with each other their anecdotes. This is basically what we need to do “Learn from Each Other & Grow”, So let’s open ourselves by sharing and helping each other with our knowledge, views and experiences.

We would also be happy to have your suggestions / comments, if any, what you would like to incorporate in the next Meeting or what you would like to learn more, we welcome each ones views as “The achievements of an organization are the results of the combined effort of each individual", so let’s make it happen.

Thanking you,

Sincerely,


P.S. The Background Picture is the Fine Estate Home Mr. Jagdeep Singh sold in 2008. He was recognized with a Century21 New Star Realty Inc. Fine Homes & Estates Pin at 2008 Awards Ceremony. (Sorry, there is no photo here as it was part of the original email and has not been reproduced for privacy reasons)

Big banks keep slice of deep rate cut - Toronto Star

The Bank of Canada slashed its key interest rate yesterday by three-quarters of a percentage point to the lowest level in half a century and confirmed Canada's economy is "entering a recession" because of the deepening global economic slump.

But chartered banks refused to match the deeper-than-expected cut, dropping their prime rates by only half a percentage point, the second time in the past few months some have balked at passing on the full savings to consumers and businesses.... Read complete here

Sellers should move out when deal closes

The typical Ontario Agreement of Purchase and Sale provides that, "Upon completion, vacant possession of the property shall be given to the buyer...". In this case, the buyers were moving from Toronto to London and arranged for movers for the closing date. They arranged for their London closing to happen at 3:09 p.m. and their sellers closed their own purchase at 4:24 p.m. on the same day.

The buyers' movers arrived at the London home at 6:00 p.m. but the sellers would not permit them access. The movers waited until around 9:00 p.m. but then left as their truck was needed in Toronto the next day. The movers returned the following Monday and billed the buyers an extra $1,393.91. The buyers incurred hotel and extra expenses totalling $401.55 and they sued the sellers for their losses.

The judge ordered these sellers to pay. She held that sellers are required to give vacant possession to their buyers on completion, and that means the closing of the transaction. If they do not, they are liable for any loss.

Foord v. Smith 33 RPR(2d) 279

COMMENTS: This case stands for the proposition that if the deal is closed and the buyers are the owners they are entitled to move in. If the sellers want to delay the closing, the contract should specifically say so. The judge also said, "It is often that parties are moving in as others are moving out, and most of the time this is done in a co-operative spirit which recognizes the problems inherent in moving in and moving out, along with the timing of transactions at the registry office." The practical realities are that keys and monies change hands usually between 9:30 and 4:30 and reasonable people make sensible arrangements with each other. If it were otherwise the system would never function at all. Of course, cautious buyers could always arrange for an overnight loan and stagger their closing dates and make their lives simpler, although somewhat costlier.

Hopefully, REALTORS® and lawyers representing sellers will bring this to their attention.

Where applicable, the information being used is from TREB, OREA, CREA or other professional associations, which the user is a member of.

Real Estate & GTA - Greater Toronto Area: Money Laundering and Real Estate - My take on it

Real Estate & GTA - Greater Toronto Area: Money Laundering and Real Estate - My take on it

Money Laundering and Real Estate - My take on it

It is believed that criminals will find ways to conduct their activities no matter what. But I am a strong believer that we shouldn't make it easy for them. New law requires real estate agents to verify ID of buyers and sellers and track deposits. This is an excellent enhancement to existing procedures. Simply because, apart from other things, it enables you to know your client better. New federal laws and regulations dealing with money laundering and anti-terrorist financing went into effect on June 23rd, 2008. These require real estate agents and brokers to collect and verify more personal information from buyers and sellers. Real estate agents must also now track the source of funds received during the course of a real estate transaction, such as the deposit.

These new regulations are part of federal legislation (Bill C-25) passed in 2007 that requires a number of industries, including real estate, to do more to help stop money laundering and terrorist financing. The regulations are enforced by the federal agency known as the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC.

Real estate agents are now required to ask for proof of the identity of all buyers or sellers involved in a Canadian real estate transaction. If the client is a corporation, that information must include corporate documentation, and the names of the corporation directors. They must also ascertain if a third party is involved in the transaction.

The following scenarios in a real estate transaction are of particular concern.

1. Client arrives at a real estate closing with a significant amount of cash.
2. Client purchases property in the name of a nominee such as an associate or a relative.
3. Client does not want to put his/her name on any documents that would connect him/ her with the property or uses different names on offers, closing documents and deposit receipts.
4. Client inadequately explains the last minute substitution of the purchasing party’s name.
5. Client negotiates a purchase for market value or above asking price, but records a lower value on documents, paying the difference “under the table”.
6. Client sells property below market value with an additional “under the table” payment.
7. Client pays initial deposit with a cheque from a third party, other than a spouse or a parent.
8. Client pays substantial down payment in cash and balance is financed by an unusual source or offshore bank.
9. Client purchases personal use property under corporate veil when this type of transaction is inconsistent with the ordinary business of the client.
10. Client purchases property without inspecting it.
11. Client purchases multiple properties in a short time period, and seems to have few concerns about the location, condition, and anticipated repair costs, etc of each property.
12. Client pays rent or the amount of a lease in advance using a large amount of cash.
13. Client is known to have paid large remodeling or home improvement invoices with cash.
14. Client does not want correspondence sent to home address.
15. Client over-justifies or over-explains the transaction.
16. Client’s home or business telephone number has been disconnected or there is no such number.
17. Client uses a post office box or general delivery address

Will this legislation and procedures be effective in stopping money laundering? In my opinion, it will certainly make a dent. What do you think?