Mortgage Broker

14 | winter 2017 cmba-achc.ca CMB MAGAZINE letters to the editor practice: first, because that's the way it's always been done; and second, because lenders won't include commissions in a mortgage unless it's "in the price." Of course, lenders have always covered commissions; it just wasn't broken out as a separate item. Appraisers quoted values that included commissions because it was in the sale price of every comparable they used. With buyers having agency representation, the array of business models out there and the wide variety of commissions realtors charge, the antiquated practice of commissions being paid through the transaction brings huge conflict-of-interest risk to our industry members. Too oen, real estate agents are placed in the position of having to negotiate the amount of their commission and how it can be paid while negotiating a contract of purchase and sale for their client. Sellers feel pressured – even blackmailed – and buyers are confused and anxious about the commission impacting their negotiating position. e obvious solution is for sellers to pay their agent and buyers to pay their agent. e seller and the buyer each hire their own agent to perform the services they require at a fee they agree to, and neither knows or cares about the details of the other party's deal. is would eliminate competition issues between realtors regarding their business model, and empower the public to make their own arrangements with their agent without having to worry about it impacting the transaction at negotiation time. No conflict. So, what's the problem? e problem is that lenders won't 'finance' commissions. at's why I'm appealing to you, the mortgage brokers. is is your territory and, frankly, we need your help. ere has to be a way to make this work. How can we structure this so that buyers can have the commission they agree to pay their agent included in their mortgage? What would it take? Is it even possible? is is a bridge we don't have to cross just yet, but the time will come soon, which is why I'm reaching out to you. I realize it's not your problem, but it is your area of expertise and you may see solutions we don't. Even more, you may better understand the actual barriers we face with this. I believe that your collective insight into this will be critical to our finding a solution. Do you come across this in your practice today? Are buyers asking about including the commission they have agreed to pay their realtor in their mortgage? Can we start a dialogue between our industries that will help us to better understand the issues and uncover potential solutions? ank you for reading. We look forward to continuing to work with you toward helping people realize the important goal of home ownership. Paul Cowhig Okanagan Mainline Real Estate Board We have a problem I write in response to the CMBA's presentation to the Federal Finance Committee. How about dealing with our own backyard and talking about regional- and community- based pricing variations and anomalies? A two- bedroom apartment in Toronto is at least double the national average – and appreciation [during] the last few years, and projected for 2017, is double digits. It is only in the last 10 years that economic changes have provided the climate for purpose-built rentals, which are both required and desired, since rental stock was last built in the 1950s and is largely obsolete unless refurbished. Condominium construction and investor rentals cannot keep up with demand while many first- time homebuyers have no choice but to purchase an ever-shrinking (in size and availability) high-rise condominium. e government failed to plan for growth in population, infrastructure and housing with the planned release of H-zoned lands; [it also hasn't] provided provincial initiatives to create services and buildable lands, and to incentivize builders and developers to provide more affordable housing. To fail in all of the above areas through changes in government and across parties, then to slap Canadians with new rules and regulations to keep them out of the housing market and negatively affect affordability for both renters and buyers in an ad hoc manner and without proper consultation, is actually punishing. Asking for input aer the fact is simply bad governance. Government is growing, services are shrinking and costs are going up, so that municipalities are being forced to raise indirect and direct taxes. Property taxes, land-transfer taxes, municipal works charges, permits, levies – they all go up. Timing for development approvals and process is painfully slow, which adds to developer carrying costs. Who pays? e consumer, of course. Home ownership should be a constitutionally protected right, and ad hoc monetary policies created like Band-Aids should not be allowed. Curbing foreign ownership and foreign speculation makes sense; allowing foreign speculative profits to leave the country makes no sense, and should therefore have an important place in regulatory matters. To remove Canadians at large from the pool of possible homeowners is wrong. Furthermore, to control Canadians' free-market investment in the necessary replacement of aging rental-housing stock is also wrong, particularly in markets where demand outstrips supply almost three-to-one, as in Toronto. e government is promoting Canada as a sanctuary country, allowing over 300,000 immigrants annually on one hand, but curbing new housing construction for rental and homeownership on the other. Where are these people going to live? Perhaps we should turn 24 Sussex Drive into affordable housing and Harrington Lake into a summer camp for the poor. Unfortunately, civil servants are not businesspeople, and political agenda's trump (no pun intended) real needs and informed, consulted legislation. David Mandel First Source Mortgage Corporation Toronto

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