Call for inquiry on Vancouver home contract flipping

The Globe and Mail recently published a story on contract flipping in Vancouver:

The probe reveals that homes are being flipped by assigning – selling – sales contracts before closing, for higher prices than what the original seller homeowner receives in the end. Assigning contracts like this is legal, but controversial.

Speculators who profit this way also don’t pay property transfer taxes, because technically the property doesn’t change hands until the deal closes.

Mr. Eby said he is hearing from upset constituents in his Point Grey riding, where many homes are demolished to make way for new investor-owned houses that sit empty, some resold several times.

There have been a number of reactions to this story, but most recently calls for an inquiry:

The technique, which brings profits for speculators but higher prices for buyers, has sparked a torrent of criticism in the province “The investigation needs to be independent because the government has already said it doesn’t think there is a problem,” said MLA David Eby.

Vancouver Mayor Gregor Robertson said after Saturday’s report that the province should impose a tax on speculators.

Read the full article here.

BC Premier Christy Clark has already said no to the province making any extra money off of sales to offshore buyers, but says now there will be a study on the impact of foreign buyers.  The government also proposes to raise the PTT exemption as a way to solve high housing costs without risking lower house prices for first time buyers.

It’s worth highlighting this comment from ‘shut it down already‘ who points out that this summary confuses the issue of offshore buyers and contract flipping which has the ‘racists running in circles’:

Rampant speculation generally resolves itself in the end. The other obvious contradiction is that we often hear people here saying that government intervention in the markets is the problem, yet now you want them to step in and intervene.

Don’t forget that the original sellers of an assigned property accepted a price that they were satisfied with. It’s only greed and jealousy that had them aghast that the buyer might resell for more than they paid.

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Shut It Down Already
Guest
Shut It Down Already

The summary, above, seems to mightily confuse the confuse the concepts of assignment and offshore buyers. I think this one has the racists running around in circles.

Rampant speculation generally resolves itself in the end. The other obvious contradiction is that we often hear people here saying that government intervention in the markets is the problem, yet now you want them to step in and intervene.

Don’t forget that the original sellers of an assigned property accepted a price that they were satisfied with. It’s only greed and jealousy that had them aghast that the buyer might resell for more than they paid.

VCI Admin
Guest
VCI Admin

Good point – the intent was to highlight the premiers reluctance to essentially take free money for the province from buyers who don’t vote because of the risk of slowing the housing market. In light of this it seems unlikely that there will be a response to the mayors call for a ‘tax on speculators’

crabman
Guest
crabman

Not exactly. Selling agents are supposed to get their clients the best price. When they help a third party flip the home quickly, they are deliberately cheating their original client out of large sums.

joe
Guest
joe

Well said crabman, what happens to financial adviser’s that pump and dump stock.They go to jail! The only difference with real estate sleasemen is they dump and pump real estate.

I\'m With Stupid V
Guest
I\'m With Stupid V

People who take a 6 week course to deal with hundreds if not millions of dollars are not acting morally? Shocked.

YVR
Guest
YVR

No, selling agents are supposed to bring an acceptable offer to the client. There is more to an offer than price. The fact there is a deposit ready, no inspections, no hassle of showings, etc. means the seller should not expect the best price. If the seller was after the best price then they should list the place on the MLS and not accept an unsolicited offer. This is nothing more than sour grapes for naive sellers. The fact the assignment clause it spelled out in the contract makes this even more ridiculous to complain about. Do people not read a multi million dollar contract?

crabman
Guest
crabman

The Real Estate Council begs to differ.

“The Council will be reminding all licensed real estate professionals, in the strongest possible terms, of their legislated duty to act in the best interests of their clients. Whenever we become aware of a licensee who fails in this duty, by putting their own financial gain ahead of their clients’ interests, that licensee can expect to have their actions investigated and may face disciplinary action from the Council. Brokerages have a responsibility to supervise and manage the activities of licensees engaged at the business, and brokerages who do not comply with these requirements can also expect to face discipline.”

Best place on meth
Member
Best place on meth

Any realtors found breaking the rules can expect a stern talking to, a 48 hour suspension of their license and a hefty $50 fine.

YVR
Guest
YVR

Clearly you can’t read. No where does it say “bring the best price” as you stated. Price is not the only thing in a clients best interest.

Shut It Down Already
Guest
Shut It Down Already

Selling agents are supposed to act on the instruction of their clients.

Burnaby Bear
Guest
Burnaby Bear
“…saying that government intervention in the markets is the problem, yet now you want them to step in and intervene” I don’t see an inquiry as direct intervention in the housing market, necessarily. It could reveal some actual statistics and it might get enforcement by CRA increased (the profits made on flipping assignments is likely business income, not capital gains) and perhaps it might push the BC tax collectors to look more closely if an assignment should trigger the PPT. “Don’t forget that the original sellers of an assigned property accepted a price that they were satisfied with.” I kind of agree with this, but when an agent approaches an unsophisticated senior couple with what sounds to be a massive amount of money, it does not change the fact that they are undervaluing the property in order to allow for… Read more »
patriotz
Member

Further, regulation – for example of what financial advisors can do as someone mentioned, or of what RE agents can do – it not intervention.

Intervention means attempting to fix the market price, which of course is what the government is doing with the RE market right now through financing guarantees and tax subsidies.

Shut It Down Already
Guest
Shut It Down Already

The only reason people want anything at all to be done is because they think it impact prices negatively (or, at worst, neutrally). By any definition, that’s intervention.

patriotz
Member

You mean any RE shill’s definition.

Shut It Down Already
Guest
Shut It Down Already

Shill? Please. The morons here have just found another potential vector to attack foreigner purchasers, that’s all.

Royce McCutcheon
Member
Royce McCutcheon

@Shut It Down Already: I find some of your comments to be very much needed reality checks about what has actually transpired in this market or useful commentary proposing an alternative explanation for something being observed. I don’t agree necessarily, but it keeps things honest. But I think you’re reaching if you think implementing professional standards or execution of an inquiry represents an intervention in the market.

patriotz
Member

If a seller doesn’t want a sales contract assigned, they can simply put a no-assign clause in the contract. I doubt many sellers would be wiling to do this, as it would likely reduce the buyer pool, and thus the sale price.

When the solutions to a problem are already well known (what Robertson and various academics have suggested are pretty close to the mark), an inquiry or study is simply an excuse for not doing anything. You heard this sort of thing from Harper last year and you’re hearing something similar now in BC.

YVR
Guest
YVR

You are selective in who you think should take action. Harper is no longer in power. CMHC and immigration are a federal responsibility, not a provincial or municipal one. You forgot to call out Jr. Trudeau who is responsible now and has been since November. Part of his campaign was to tackle high housing prices. He seems more interested in selfies, climate change conferences and proclaiming himself a feminist than tackling the housing bubble.

patriotz
Member

” Part of his campaign was to tackle high housing prices. ”

I wish it was, but it wasn’t. JT was asked directly in the economic debate whether he thought the federal government should bring prices down and he said no. Of course none of the other leaders disagreed.

Both the federal and provincial governments have adequate powers to bring prices down and I have always said on this forum that lack of action by government means they don’t want prices to go down.,

That said I do think JT is not depending on housing as an economic driver to the extent Harper was.

YVR
Guest
YVR

Again, Harper is no longer in power. Get over it. One of JT’s promises which was widely advertised in YVR was affordable housing.

patriotz
Member

http://www.macleans.ca/politics/ottawa/tale-of-the-tape-transcript-of-the-globe-debate-on-the-economy/

Find “bubble” and you’ll see all 3 leaders on housing. Note how Harper goes out of his way to brag about the performance of the market since 2008 and Canada’s unprecedented ownership rate, which he had promised to increase further.

YVR
Guest
YVR

Yup and JT then promised to allow anyone to use RRSPs as a DP on property not just first time buyers on top of Harper’s policies. What do you think that will do? Increase ownership or decrease it? He has added to what Harper did.

GTTT
Guest
GTTT

Garth’s blog is sooo out of tune with whats really going on in Vancouver.

Whats worse is he purposely tries to avoid and censor the truth. After all, it’s to be expected as he is a former politician who had a nickname: “Turncoat Turner”

Enough said. Translates into “liar”?

null
Guest
null

And white people thought they were so smart selling to the proverbial Chinese guy with the suitcase of money who knocked on the door. Hopefully now they’ll just slam the door in his face.

Why does it take so long for the truth on things that impact so many people to come out?

Best place on meth
Member
Best place on meth

They could always put a sign up on their gatereading “no solicitors, Jehovas Witnessess, or Chinese”.

After all there’s no law against doing so, isn’t that right?

space889
Member
space889

You can’t discriminate based on religion or race. Read the Charter of Rights.

patriotz
Member

The Charter applies to governments, not individuals. Perhaps you should read it.

space889
Member
space889

Try to hang that kind of sign on the door of your private business, or put it into a job ad and see how far that gets you without someone complaining to the HRC about rights violation.

southseacompany
Member
southseacompany

“Interest rate shouldn’t be seen as main tool to shore up financial stability: Bank of Canada”, Financial Post

http://business.financialpost.com/news/economy/interest-rate-shouldnt-be-seen-as-main-tool-to-shore-up-financial-stability-bank-of-canada

“Interest rates should not be the only tool to promote financial stability, said the Bank of Canada’s Timothy Lane, amid worries of highly indebted consumers and frothy housing markets in Toronto and Vancouver.”

“Lane said that if the Bank of Canada had not cut interest rates last year — it could have worsened the Canadian economy and caused a crisis. Protecting against that outweighed creating a further imbalance in household debt and some housing markets in Canada, he said.”

patriotz
Member

There isn’t necessarily a tradeoff anyway, since the government has the power to control access to household borrowing on its own terms. But if you have a government that relies on household debt to drive the economy, lower rates are going to lead to more debt.

null
Guest
null

I’m listing to CNKW Lynda Steel show right now. The host, Lynda Steel, is openly talking about people “playing the race card” to stifle discussion about foreign ownership.

Yunak
Member
Yunak

Yeah, they are talking more and more, people coming forward. People relising they were in “bidding wars” with ghosts in China bidding remotely , etc…

http://player.cknw.com/#/

patriotz
Member

Perhaps these “ghosts” were just conjured up by the selling agent to try to get a higher price from the buyer. It’s been recognized as a problem in Ontario:

http://www.thestar.com/business/2015/06/14/phantom-real-estate-bids-targeted-by-new-ontario-law.html

Don’t hold your breath waiting for similar legislation in BC.

Burnaby Bear
Guest
Burnaby Bear

It would be interesting to find out if fake bids are really an issue; or are the people “losing” the bidding wars just sore losers?

The in-laws just sold their 63 year old bungalow in Brentwood Park for about $300K over list price, there were 15 offers, and at least one realtor who insisted that she be told what the high bid was so her clients could have a chance to beat it!

null
Guest
null
crabman
Guest
crabman

Remember, they’re not laughing with you, they’re laughing AT you!!

Yunak
Member
Yunak

Exactly, it is amazing art and monumental mark of certain times. It should always stay there as a reminder and paradigm related to what that honest Chinese women Lynn Yang said:

“I am disappointed in the Canadian government. They don’t have the sense to look at what’s happening out there. Poor Canadians – they just don’t understand.”

http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/

Yunak
Member
Yunak

It is sickening that people here still discussing “possible race question masked with free market bullshit” while crocks and criminals are expanding the “the business” day by day and hour by hour. Vancouver desperately needs its own Eliot Ness and swat-team to go unmercifully after gangsters . The size of crime related to RE business including but not limited to money laundering, fraud, deception, stilling, people smuggling, document forging,, extortion and evictions is of epic proportions. and some still shill on political correctness and racism. Anybody pulling racism shit with respect to RE situation in the city should be treated as a partner in crime and prosecuted accordingly, enough is enough. Travesty must stop at some point.

Yunak
Member
Yunak

I guess I got my personal “officer” assigned to down-vote my comments. This so consistent with mentality of those working on it that I am not surprised at all. Let’s just hide the truth , censor and things will work out and our truth will prevail, well done., well done…

Shut It Down Already
Guest
Shut It Down Already

Prove these individuals are criminals or STFU, why don’t you?

We’ve known all manner of flipping had been going on for years, but now there’s a potential foreigner involved you’re all over it like a wet sock.

Yunak
Member
Yunak

It’s just amusing how you keep pretending being dumb or out to lunch, don’t you? I hope you get paid or get some reward for being able swallow so much shit.

Yunak
Member
Yunak

MSM slowly jumping on the wagon until things get downplayed by officials. Vancouver Sun still silent, expecting bonuses?

http://bc.ctvnews.ca/house-flipping-concerns-as-368-vancouver-homes-sold-at-least-twice-since-2014-1.2769801

I\'m With Stupid V
Guest
I\'m With Stupid V

Did you guys hear about the protest at that teardown on Sunday.
They sound like a bunch of whiny NIMBY busybodies.

Shut It Down Already
Guest
Shut It Down Already

Presumably they #donthaveamillion ?

YVR
Guest
YVR

Actually the people out there were people living the neighbourhood. They clearly have a million. Just pissed about all the construction. Imagine living in a $5 million house which is in the middle of a construction zone for 10 years straight and then have the houses being built and renovated at the start being torn down and rebuilt now. Where in the world do you see a mature neighbourhoods like the West Side and West Van under constant construction.

space889
Member
space889

Marpole, Marine Drive and Oak right now. Main Street from Broadway to Kingsway underwent that pre-2008. Metrotown, Brentwood Mall, & Lougheed Mall are undergoing that right now.

Where do you think all the residential RE constructions are taking place in GVRD? Out in the wilderness like in GTA?

tedeastside
Member
tedeastside

well it is shady scam-couver after all home of the Vancouver Stock Exchange

now what happened to that Stock exchange …..after living in many places you learn pretty quick that vancouverites are inherently dishonest compared to other people , does vancouver attract dishonest people or create them, either way vancouver is the most shady scummy place you will ever encounter, the place has a dirty nasty vibe

Oracle
Guest
Oracle

This investigation of flipping is a red herring. Here’s why:

Flipping only works if the seller agrees to a long closing (unlikely in this market) and agrees to a minimum deposit and a long time to remove conditions. Again, unlikely in this market.

This will redirect the sheep’s thinking from the real issue. Which is illegal HAM inflows, unrestricted temporary immigration with everyone here thinking they will get PR.

Oracle
Guest
Oracle

All this will do is grandfather current realtors and any new ones that want to come in will have to apprentice for years before they get qualified.

More money for Realtors. They were waiting for a story like this so they can make their profession a restricted one.

Doomcouver
Guest
Doomcouver

Hahahaha an “inquiry”. If this was allegations of securities fraud they’d be starting litigation to send these crooks to prison.

I would like to say I’m shocked at shady deals like this in Vancouver, however nothing surprises me anymore with Vancouver’s nutty property market. It’s passed complete insanity to comically ridiculous. I really think it’s a realistic possibility, in another 20 or 30 years, that economics textbooks can start substituting tulip-mania for Vancouver real-estate mania as a more recent and just as spectacular implosion of a speculative bubble.

vangrl
Member
vangrl

Wow, didn’t take long for someone to Hack this new site.

Yunak
Member
Yunak

The Chinese have been known to be experts at hacking for quite some time. But what might surprise some is that it’s epidemic across the country in all levels of society.

http://www.cnet.com/news/the-wide-world-of-hacking-in-china/

tedeastside
Member
tedeastside

for anybody new to vancouver, this dump of a town used to have a Stock Exchange that was so rampant with fraud, securities regulators had to shut the whole thing down

Jimmy
Guest
Jimmy

Some BC Realtors insider trading and helping launder money. it is National news.

http://www.thestar.com/news/canada/2016/02/08/some-bc-realtors-laundering-money-insider-trading-says-ndp.html

NDP says the Province is missing out on Hundreds of Millions due to the tax evasion. There is no excuse for the Provincial Liberals to pretend this doesn’t exist anymore. We are being robbed.

EITHER Christy is :

1) STUPID
2) CORRUPT and on the take or laying her nest for post politics pay-off
3) INCOMPETENT and like a deer in head lights doesn’t know what to do.
4) So Beholden to big RE money that she dare do anything that may upset them.

I am thinking it is 4) but would not be shocked by any of the others too

Best place on meth
Member
Best place on meth
It’s pretty sad that a handful of lowlifes say “none of this is illegal”. Sure it’s decietful, immoral, downright scummy but technically it’s legal. When regulations regarding the sale of real estate were drawn up, nobody could have possibly forseen that a wave of morally bankrupt and ethically challenged immigrants from a country where this kind of behaviour is normal would infest our country and quickly exploit every possible loophole that we never even could have imagined. Now were going to have to re-write the rulebooks and introduce hundreds of new laws thanks to these vermin and our lawmakers will be kept busy just trying to keep up with all the new scams they dream up, There are plenty of morally reprehesible behaviours that were once “legal”, like slavery in the US, but barbabic cultures evolved and such things rightfully… Read more »
vangrl
Member
vangrl

What is illegal is if the Realtor-flippers aren’t reporting the income from flipping before the end-sale. CRA should audit every sales transaction and every Tax return from every Realtor at New Coast. Start there.

CBM999
Guest
CBM999

Send a lead into CRA. They’ll probably look into it.

Shut It Down Already
Guest
Shut It Down Already

Can’t believe you just equated real estate flipping with slavery in the very same breath as your attempt to claim the moral high ground. Oh wait — yes I can.

YVR
Guest
YVR

If there is a way to make lots of money that IS legal, then deceitful, immoral, and downright scummy are irrelevant. That is capitalism. The sooner you learn that the sooner you will start making some money yourself.

YVR
Guest
YVR

When regulations regarding the sale of real estate were drawn up they allowed assignments. What else could an assignment be for? It is to flip at a higher price prior to completion of the contract.

patriotz
Member

There are plenty of other valid reasons, for example one family member might have made the offer and then decide to assign to another member for financing.

I honestly don’t see why anyone thinks there is something wrong with assignments per se. If a listing agent is not making a best effort to get the highest price, there is plenty wrong with that.

I am also disappointed with Eby for calling for an “inquiry” instead of promising to actually do something, such as imposing PTT on assignments at the very least, or some sort of general speculation tax, and imposing sane regulation on RE agents. The general election is next year isn’t it?

space889
Member
space889

Because Eby knows full well that imposing additional transaction tax would dampen the prices and that’s not what his constituents are complaining about at all. It is simply that they feel cheated out of the higher selling price that they feel they deserve, even though they were either too lazy to do some research and getting some second opinion, or that they had no way to get that higher prices regardless as they had no way to connect with the ultimate buyer who is willing to pay the higher price.

YLTNboomerang
Member

Poll over at BCTV asking whether family day should move to match the rest of Canada versus alignment with Chinese New Year, small sample size so far but 76% say YES:

http://bc.ctvnews.ca

I\'m With Stupid ^
Guest
I\'m With Stupid ^

Well those people are all idiots cause Lunar New Year date is different every year lol.
So I guess the poll really is “do you hate asians”

YLTNboomerang
Member
GreenSalad
Guest
GreenSalad

Global Housing Market: Price Crash Led by Major Cities And Rapid Exit Of Investors
So over-stretched are they in Vancouver it is estimated that a normal price correction of 20 per cent would completely wipe out ten per cent of homeowners. Not surprising as house prices there are by some estimates now 30 per cent overvalued.

http://www.globalresearch.ca/global-housing-market-price-crash-led-by-major-cities-and-rapid-exit-of-investors/5503743

Zero Down Forty
Guest
Zero Down Forty

“The fault lies directly in the lap of central banks as quantitative easing caused an enormous injection of cash into economies, forcing interest rates to fall the their lowest levels in history. This knee-jerk over-reaction effectively halted price corrections that should have fully unfolded but didn’t and put rocket boosters under house price inflation the world over.”

Bingo. We know that history all too well here in Vancouver.

Whistler or bust?
Guest
Whistler or bust?
This from the comment section of the Globe and Mail So the BC Government is feeling the heat. So there is a rapidly developing hyper inflating Real estate price bubble expanding to crisis proportions over the last 10-15 years destroying the community and culture of Vancouver and the only thing the BC Government decides to do is create a secret, behind closed doors ‘independent’ committee to investigate for 12-18 months and then what???? Shuffle the finding behind an election campaign??? This smokescreen commitee is NOT making any concrete suggestions on the main sources of this crisis. The main issues involved once again that the BC Government is NOT addressing: unrestricted numbers of 10 year multi entry visas given to wealthy offshore elite to speculate and buy Canadian property, giving the same property rights to wealthy offshore non-residents WITHOUT any of… Read more »
Tiger
Guest
Tiger

CHINESE COMPANY’S EMPLOYEES CAN PICK ‘NIGHT WITH A PORN STAR’ AS A BONUS

http://www.mandatory.com/2015/02/06/chinese-companys-employees-can-pick-night-with-a-porn-star-as/

space889
Member
space889

Porshe, 1 week in Bali, or 1 night with Japanes AV Idol….

or if you are smart as one commentor – take the porshe, sell it, spend 6 months in Bali and get the AV idol while she’s on vacation.

Meanwhile in Canada, lots of employees can look forward to a big fat $0 year end bonus, and a 1.5% raise that’s already hand back to the gov’t.

Yunak
Member
Yunak

Stubborn idiot took his mission very seriously and keeps fudging votes although posts don’t get hidden. Sick brain must be one?

space889
Member
space889
Condo contract assignment was all the rage pre-2008 until the developers got smart and demanded a 20% and/or $5000 fee. They also were pretty aggressive suing people in 2008 when the original buyers or the people who bought the assignment didn’t complete the contract. I believe even former PM Kim Campbell was named in one of the lawsuits. Nobody in the general public or on this blog were crying foul about contract assignments back then? But when some Chinese investors do it with the cherished SFH, it is suddenly an outrage?? Because the sellers didn’t get much as they could have if they simply sold later? There are only 2 real issues here and none of them have to do with race or foreign money. 1 – Did the realtor act in the best interests of seller they claim to… Read more »
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