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CMHC to Realtors: Keep consumers in the dark

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Guest | 26 Feb 2013, 06:29 PM Agree 0

The meeting of the minds follows a move by the Quebec Federation of Real Estate Boards, a governing body that oversees 12 real estate boards in the province, to challenge the Canadian Mortgage and Housing Corporation over what it deems to be an ‘ethical breach’ in the organization’s policies regarding foreclosure disclosure, according to an article in the Financial Post.
The newspaper obtained documents revealing that CMHC had been asking Realtors to keep quiet about whether the home being sold is a foreclosure, disclosure normally considered mandatory.
A statement from the group said, “Because the repossession field is currently a mandatory field in the brokerage system you have no choice by to indicate ‘no’, which goes against ethical rules stipulating that real estate brokers are obliged to publish information that is truthful and verified.”
The CMHC stance has industry experts divided, with some wondering whether the corporation is hoping to dodge low-ball offers by avoiding disclosure, or preparing for a housing market collapse.
Ultimately the Crown corporation reached a compromise with the Quebec Realtors that removed any listing requirement around foreclosure status. That then leaves it up to the real estate professional to decide whether to put that fact on the MLS system for buyers, including investors, to see.
For investors, not knowing a deal is a foreclosure can make the difference between offering full asking price or going in with the kind of low offer many first try with distressed properties.
CMHC appears to be cognizant of the consequences of publishing its property holdings as foreclosures as opposed to having them lumped in with other for-sale properties.
  • David A | 28 Feb 2013, 01:11 AM Agree 0
    I think the sellers name might give it away. If the seller is a bank or other lender in most cases it would be a power of sale or foreclosure.
  • real estate license | 28 Feb 2013, 07:53 PM Agree 0
    From my experience the banks are very formal in how they deal with the disposition of these type of properties. They get three appraisals, take a median value, and wait for an offer within 5% of that value. If no offer is forth coming after a period of time they might drop the list price by 5% and then wait for an offer within 5% of the new list price. You can submit low ball offers till the cows come home you are just wasting your time and energy. In the late 80's when the market crashed CMHC held thousands of properties off the market so as not to create an over saturation. Their main concern is not the sale of any particular property but to not undermine the value of all the other properties which they are guaranteeing under their insurance program
  • Sophie | 28 Feb 2013, 08:04 PM Agree 0
    David : Unbelievable that they didn't even think of that.
  • Carol Selinger, Associate | 01 Mar 2013, 01:25 AM Agree 0
    I thought it was all about disclosure---------isn't that directly from CREA
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