The Saskatchewan Real Estate Commission…how they govern and their public mandate.

Hello and welcome to this week’s blog post. I’ve chosen the Saskatchewan Real Estate Commission (also known as SREC) for today’s topic because of its direct impact on consumer satisfaction, both from the Buyer’s perspective as well as the Seller’s perspective. It oversees real estate transactions and ensures guidelines are adhered to throughout the province of Saskatchewan. Unfortunately, from my conversations with customers and clients it seems to me that there is little public knowledge about the important services that the Saskatchewan Real Estate Commission provides. I hope to change that somewhat today or at least to create greater public awareness regarding the Commission. The Real Estate Ccommission is the “go to resource” when all other conflict resolution is unsuccessful.  Let’s dive in…

As taken from the official site…”The Saskatchewan Real Estate Commission is an independent, non-governmental agency, responsible for the regulation of the real estate industry. The Commission is mandated to provide services that enhance and improve the industry and the business of industry members.”

Saskatchewan Real Estate Commission (SREC) Mission Statement

Click this link for SREC’s official site where you will find lots of great information including this mission statement!

Saskatchewan Real Estate Commission Topics:

Frequently Asked Questions

Industry Member Relationships

Complaints & Investigations

Trust Accounts

Real Estate Assurance Fund

Prospectus Filing

Although the focus here was based on information regarding public interest, you will find plenty of other topics on the official site including “Hearing Decisions” that the Commission has been involved with over the previous three (3) years. Hopefully this has provided you with knowledge of a resource that you will find useful. In the mean time, stay tuned for the next weekly topic. Be sure to let me know if you have any other particular topics of interest you would like discussed. I will do my best to accommodate. In the mean time, information is power. Use it wisely. 🙂

 

 

Canadian Mortgage and Housing Corporation (CMHC) Default Mortgage Insurance

The Canadian Mortgage and Housing Corporation (CMHC) default mortgage insurance is a large topic. For this reason we will only examine the basics today as related to the potential cost associated with purchasing a home in Canada.

The Creation of The Canadian Mortgage and Housing Corporation (CMHC)

To begin, here is a bit of trivia…The Canadian Mortgage and Housing Corporation was formed  January 1st, 1946. It’s purpose as described on Wikipedia is the following: “Canada Mortgage and Housing Corporation (CMHC) is a Crown Corporation of the Government of Canada. Its superseding agency was established after World War II, to help returning war veterans find housing. It has since expanded its mandate to assist housing for all Canadians. The organization’s primary goals are to provide mortgage liquidity, assist in affordable housing development, and provide unbiased research and advice to the Canadian government, and housing industry.

CMHC insurance, is mandatory in Canada for minimum down payments of 5% up to 19.99%. This is considered a high ratio mortgage. The default insurance protects lenders, in the event a borrower ever stops making payments and defaults on the mortgage loan. The amount of the insurance is tacked onto the mortgage amount and paid over the amortized life of the mortgage in most cases. With a down payment of 20% or more, CMHC default mortgage insurance is not required.

A helpful video by ratehub.ca describes how CMHC mortgage insurance is calculated…
ratehub.ca explains how the Canadian Mortgage and housing Corporation default mortgage insurance is calculatedThe cost to home buyers for default insurance is 2.80% – 4.00% of the mortgage amount but it does allow Canadians, with low down payments to purchase a home. Without the default insurance, mortgage rates would be potentially higher because the risk would be higher. The risk of default is passed along to the mortgage insurer with this insurance.

Visit CMHC’s official site to learn what the general requirements are to qualify for CMHC Mortgage Insurance…Canadian mortgage and housing corporation logo

 

Are you considering purchasing a home and you have less than 20% down?Great Rate Realty saskatoon Canadian Mortgage and housing corporation default insurance mortgage loan calculator

Here is a helpful CMHC mortgage insurance calculator from Great Rate Realty

I hope this helps shed some light on a government entity that has changed accessibility of home ownership in Canada. Like anything, it comes with a price tag but… if immediate home ownership is on your bucket list and you don’t have 20% of the purchase price as a down payment but you meet requirements in all other ways, this option may be what you need. Before you begin shopping for the house of your dreams know your budget!

Visit your Mortgage Broker/Lender and determine if you qualify to purchase and how much you qualify for…ask for a letter of “pre-approval”

If you don’t qualify for CMHC your Mortgage Broker may have other insurance options so don’t get discouraged too quickly! You are on a quest to find out where you stand and you do have more options than you might realize. If you are turned down by one bank or mortgage company understand that you can shop around. If it appears that there is a consensus after a few tries, you now know what you need to do.  You can focus on your goal more clearly.  Knowledge is power and you are now in a more powerful place of making your dream come true. You are on your way! One step at a time…

Are you a first time home buyer?

A future topic related to CMHC is the a new program coming into effect September 2nd, 2019. Here is a teaser article from CMHC to get your juices flowing:

Federal Government Makes it Easier
for Middle Class Canadians to
Buy their First Home

Until next time, keep the dream alive, one step at a time!

After all, life is a journey, not a destination.

 

Saskatoon Real Estate – Change is on the Horizon

A Saskatoon Real Estate Blog…why now?

Welcome to my first twice monthly blog post. Sue Stene REALTOR Great Rate Realty
I know…everything “Saskatoon Real Estate related” isn’t everyone’s cup of coffee so run if you must…..Still here? Great!
Hi, I’m Sue Stene and I’m a Real Estate Agent with Great Rate Realty. To begin, I want say I’m really pumped to get blogging and sharing my thoughts about today’s real estate industry. I’ve had the opportunity to experience the industry from a different angle than most and I am excited to see where the industry is going as it flexes and groans under the strain of change. I am bursting with topics to share. There’s nothing better than to help the Buyer or Seller understand more about the industry, how it currently works in Saskatchewan and where it may be going. The general population has a healthy interest in real estate but the actual mechanics of Canada’s highly organized real estate industry is still a mystery to most. The industry is evolving folks. It’s time to empower yourself with information in this era of amazing Internet resources. You now have answers to any question you might conceive, and with that power comes responsibility. OK…so maybe it’s not that serious, but it is that powerful. Through this medium it is my intention to provide information and resources that empower the Buyer or Seller.

The Ghost in the Closet

This blog (and the many topics) have been on my mind for some time now. I feel there is a gap in public knowledge and sharing the nuts & bolts of the industry may help contribute to better public perception. The fact is, the Real Estate Agent provides a valuable service which has been clouded by some negative experiences and lack of transparency in some cases. It’s easy to think there’s a ghost in the closet until you open it to find it’s just your beloved cat, scaring the heck out of you…OK, not the greatest analogy but you get the idea. My hope and intention is to shed light where it’s needed, including Buyers and Sellers in the discussion.

How I got here…

I like to explore options and solutions and always have. I believe there is always room for improvement and nothing is ever “perfect” nor should it be. As an Agent over the previous 9 years in the Saskatoon real estate market I have experienced the conventional brokerage system and after some time I realized it wasn’t a great fit for me so I moved to One Percent Realty, where we offered a flat fee business model. I was attracted to that business model and progressively to the Great Rate Realty business model (which offers a better balance) because these business models  provided the Seller with more options. At Great Rate Realty we put more control into the Seller’s hands when it comes to the Buyer’s Brokerage/Agent compensation, while saving on the list side. This however is a conversation for another blog post. If you want more information on Great Rate Realty’s Business Model please watch the video at the end of this post. If you’d like more information don’t hesitate to contact me.

The Cost of Doing Business

Suffice it to say, with Saskatchewan’s soft Seller’s market, Sellers are always looking for ways to achieve their goal of selling their home, without breaking the bank (or returning their keys and walking away in some cases). The pervasive 6%/4%/2% commission structure that majority of brokerages and Agents still use in the Saskatoon real estate market is slowly eroding as Agents explore their option to determine what fees they want to charge and what possibilities are available so they can limit their overhead and pass some savings to the Seller. Again, another topic for another day!

Agents are required to belong to a brokerage and frequently pay very high overhead to play with the big boys in the industry. Brokerages have their fee structures (and overhead) so Agents pay to belong to a given brokerage in a variety of ways that may include…cost per deal, desk fees (office usage), support staff, advertising (on and off line) photography & video services , signs, lockboxes/rentals etc. etc etc.  Then there are yearly dues & memberships to provincial boards, CREA (Canadian Real Estate Association) and SREC (Saskatchewan Real Estate Commission) and the cost of mandatory yearly training…all a requirement to play in the industry.

Public Perception…

Now I will get off of my soap box but this is a reality and reality is that all of this overhead (as with any business or industry) is passed along to the consumer. These and many other topics will be covered individually in coming blog posts but…for those of you that have the impression that Agents are making piles & piles of money (and sometimes this is the case in a strong Seller’s Market…) I am here to say there is much more to this picture…and being on the inside of the Saskatoon real estate industry with one foot on the fringe (with a background in selling privately which is where I began), I have some valuable nuggets of knowledge to share from both sides of the equation, based on my experience.

I heard it on the grape vine…or was that Google?

Working with brokerages that offer a reduced flat fee service opposed to the conventional % based system allows me to see, hear and experience many things that my peers most likely don’t. I can also relate to the burden of the Saskatoon Real Estate Agent in a way that the general public may not understand.What other service industry will provide a service for free in the hopes of getting paid in the end…but with no guarantee! In this business model as with any business model, the cost of doing business is naturally passed along to the consumer who experiences a successful sales transaction.That successful Seller is paying for the elevated risk inherent with such a business model. Makes sense, right? Not everyone agrees. What might be a viable solution?

What are the Possibilities?

Hmmmm…has the current business model seen better days? Would it make greater sense to have a fee for service for every individual listing using an a-la-cart system of available services? Pay by usage arrangement? Who is currently doing this and how successful are they? Does an a-la-cart system seem more fair and equitable to the Customer because it spreads out the responsibility to everyone receiving service, regardless of a successful outcome? Would the Agent be more diligent or less diligent in this scenario?  Is this the way of the future as some Proptech Companies may lead you to believe? Time will tell!

Additional Topics of Interest

Additional topics I want to cover include the current system’s transparency (or lack of it) and how Saskatchewan compares to other provinces in this regard. I also want to discuss general behind the scenes stuff that the public isn’t aware of but should be and how that stuff actually impacts both the Buyer and Seller. I’d also like to pursue topics of interest related to new players on the horizon of Canada’s real estate industry.

I can’t think of a better time to talk about all of the ebb and flow that this industry is going to experience in the coming years. Exciting times! You are today’s Buyers and Sellers and you are a different breed then ever before with resources at your finger tips. With a few of the finer details available, you will find yourself working hand in hand with your selected Agent. What is that arrangement worth to you?

Future Topics of Interest

Future blog topics may include (but are not limited to):
Commission structures and how they compare.
Are Buyers really exempt from paying commissions?
The cost of doing business as an Agent & how that impacts the public.
Behind the scenes in the real estate transaction (from the Seller’s perspective)
Behind the scenes in the real estate transaction (from the Buyer’s perspective)
Listing with a small brokerage vs a large brokerage (how that impacts you)
For Sale By Owner (FSBO) mere postings…what, who, when & why
Full Service Listings vs Mere Postings
Canadian Real Estate Association (the largest organization in Canada)
The Saskatchewan Real Estate Commission (how they govern and their mandate)
The Sales steps from Listing to Conditional Offer to Firm Sale.
3rd party support in the selling process, ie, legal, inspections etc.
Common and less common conditions listed in an Offer to Purchase
Things to consider when preparing to sell
What home improvements bring the greatest return for the least cost
Things to consider after the sale
Do you have a complaint or concern? What steps to take.
The current sales model and the impact Proptech Companies
The MLS® System, REALTOR.ca and other major players in Canada
and much much more….

Do you have a topic of interest? Contact me. I’d love to hear about it!

Some topics that I will be covering may be a bit sticky and I appreciate open minded productive solution oriented conversation. Anything without some purpose or productive benefit to the whole will be removed. Stay tuned for more real estate stuff as it relates to the Saskatoon Real Estate Market and beyond! There’s always room for improvement! Let’s make room!