About the Current Agreement between the Canadian Real Estate Association and the Competition Bureau

You may have experienced some confusion and received incorrect information about the agreement between CREA and the Competition Bureau.  Consumers are unclear about what it means to them and unsure about who to trust with the important responsibility of the sale or purchase of their home

As expected, both in our industry and among consumers, there are questions about Chestnut Park and our operating plans in this new environment.  So we want to take an opportunity to provide you with the facts about where we stand while bringing clarity to the situation. 

Firstly, Chestnut Park has no intention of changing its business model.  We will continue to operate as a full service broker, with no provisions for any menu driven services.  In this regard we will provide the highest level of service, professionalism and fiduciary duties to our clients.

We are firmly committed to providing our clients with the most customized service in the industry.  We are unwavering in our belief that buyers and sellers will continue to rely upon us as full service agents for many reasons and will continue to see the value in the results based commission system on which our business is built.   This is our opportunity to demonstrate our leadership as evidenced by the vital role we will continue to play for consumers in the markets where we conduct business.

Below are some Questions & Answers about the CREA Agreement with the Competition Bureau:

Q:         Will Chestnut Park change its business model in response to the CREA deal with the Competition Bureau?

A:         No.  Chestnut Park has always been a full service real estate brokerage and will continue to be a full service real estate brokerage. We will provide the highest level of service, professionalism and fiduciary duties to our clients

Q.         How can you continue to charge a commission?

A:         There is a lot of misinformation about how agents can be compensated for the work we do on behalf of clients.  We still operate by the arrangement that as full service agents we get paid only if the deal gets done.  Our commission is based on results.   

Q.         Why should consumers hire a full service agent?

A:         We, as full service real estate agents, will continue to support our clients from the commencement of the sale process until the transaction is complete and closed.  Our clients will have all of the information they need to make the right decision.  This ensures them the highest level of service and professionalism which in turn, results in seamless transactions, and housing goal achievements.

Clients’ deposits remain secure, legal liabilities are eliminated and the client is provided with all the necessary information to make informed, secure and safe real estate decisions. We also understand important considerations like by-laws and zoning.

We, as full service agents, get paid for getting results for our clients.  If we don’t get the results our clients desire, we do not get paid. 

Q:         What services can you provide me?

A:         We go above and beyond to help our clients from start to finish with everything they need to buy or sell their home, such as:

• walking you through the selling process from start to finish
• completing a comparative market analysis and any other related research for the property
• facilitating & coordinating staging the property in preparation for sale
• establishing a competitive listing price
• listing the property for sale
• preparing a customized marketing & advertising strategy for your property and overseeing the strategy from start to finish. This includes and is not limited to advertising, photography, marketing materials, and an online presence
• liaising and cooperating with other Brokers
• assuming responsibility for appointments, showing the property and hosting open houses
• screening purchasers and handling all inquiries
• securing deposits
• preparing and explaining all documents, negotiating the agreement of purchase and sale and conducting all follow-through activity until the transaction has closed
• communicating with and forwarding documentation to Mortgage Professionals and Lawyers
• PLUS anything else necessary to ensure the process is a smooth one

We invite you to contact us so we can demonstrate what unparalleled service we provide all our valued clients through their real estate ventures and how we can help you.

Sheila & Tiffany

The new 13% Harmonized Sales Tax (HST) came into effect on July 1st, 2010 in Ontario and will affect the real estate market in the following ways:

• HST does NOT apply on the purchase price of re-sale homes.
• HST does apply to many goods and services such as moving cost, legal fees, home inspection fees, some utilities and REALTOR® commissions (paid by the Seller).
• HST does apply to the purchase price of newly constructed homes. However, the Province is proposing a rebate so that new homes across all price ranges will receive a 75 per cent rebate of the provincial portion of the single sales tax on the first $400,000. For new homes under $400,000, this would mean, on average, no additional tax amount compared to the current system.
• Generally, sales of new homes under written agreements of purchase and sale entered into on or before June 18, 2009 are not be subject to the provincial portion of the single sales tax, even if both ownership and possession are transferred on or after July 1, 2010.
• The tax also does not apply to sales of new homes under written agreements of purchase and sale entered into after June 18, 2009 where ownership or possession is transferred before July 1, 2010.

How will this affect condos? According to John Warren, a writer for Condominium Manager Magazine as reported by David Flemming with Bosley Real Estate Ltd., condo owners will be affected in the following ways:

First, reserve fund study providers estimate that almost all reserve fund expenditures, both actual after June 30, 2010 and projected for future years in reserve fund studies, will increase by approximately 5% to 7% due to the imposition of the HST, assuming most of the PST savings are passed on. Condominiums should update their reserve fund studies during 2009 so that the increased reserve contributions that will result from the increase in taxation can be considered in the 2010 budget.

Second, operating costs will increase.

Current estimates are that electricity, gas, communications, cable television and contracts for management, concierge, elevator and mechanical equipment maintenance, landscaping, cleaning and similar services will increase by close to 8%; water costs should not change as they are not presently subject to PST or GST, nor will they be subject to HST, repairs and supplies – 5% to 7%; professional fees – 8%; office – 5% to 7%; and, finally, insurance should not change as it is presently subject only to PST, which tax will continue and insurance will not be subject to HST.

What does that mean for the real estate market? Well, it means a few things.

For the resale market we saw listings increase as sellers hoped to sell before July 1st to avoid paying additional tax on their legal and Realtor fees. A lot of people are misled to believe that all deals must close before this date but, in fact, if 90% or more of these services are fulfilled before July 1st, Sellers will not have to pay the additional tax.

For the new home market we have seen a spike in new condo and home sales before July 1st for this same reason. Also, most builders have changed their project plans by gearing more toward more low-priced homes and condo suites to avoid such a significant tax hit.

Furthermore, not only will homeowners be affected, renters will be too as rent will increase based on operating costs for buildings and homes.

Remember, the real estate market is the backbone of our economy so it pays to be informed.  If you have any questions this any any other real estate matter, feel free to ask us. We're here to help!