The following post is in response to the highly misleading article by the Financial Post today: CMHC seeking to hide foreclosure information from home buyers
Many, including myself, have at times been critical of the CMHC and deservedly so. However, I think this latest piece from the Financial Post attempts to capitalize on the bandwagon vilifying the national housing agency but instead reveals a lack of insight and basic understanding as to how the real estate purchase process even works.
Case in point: the Financial Post thinks anything less than 80% down requires mortgage insurance.
Here’s the memo from the Quebec Federation of Real Estate Boards that was “obtained” by the Financial Post (it was publicly posted on Twitter) which caused this hubbub:
First I’d like to point out that the Quebec Federation would not take a position which would go “against ethical rules stipulating that real estate brokers are obliged to publish information that is truthful and verified.” I was glad to read that and you should too. So they simply changed the “repossession” field in the Brokerloading system so it was no longer a mandatory field.
Yes, that would make it more difficult for those who are searching specifically for repossessed homes as the database results would be incomplete but would it hide anything? Would buyers be unaware that they were purchasing or even writing an offer on a repossessed home? Hardly and for several key reasons.
Let’s use a CMHC repossession that’s currently listed in Calgary. By the way, how did I find the CMHC listing? In our database I searched: Sellers Name = CMHC. I would make quite the detective, wouldn’t I? 😉
Ok, that was too easy. Let’s pretend that CMHC didn’t want their name disclosed as the seller. In Calgary, sellers don’t have to disclose their name on the listing itself. But – and this is a big but – the owner’s name is always available on Title. That is public information that can be obtained by anyone.
In a standard purchase contract there’s a section at the top named, “The Seller.” Your agent would need to find out who that was and the most accurate way would be to simply pull the Title.
Voila. I paid for the Title of that CMHC listing so I can prove it to you:
Half-way down the first page, clear as day, is the name of the owner. In this case, CMHC.
Another way that flags a home as a CMHC sale is that it will always include an Addendum or Schedule. For example, here’s the wording for the one currently for sale in Calgary.
“Addendum A & Schedule B (Mould) MUST accompany all offers & all deletions MUST be initialed.”
It usually isn’t listed on the public remarks but it’s highlighted for agents in the private remarks as CMHC won’t accept any offers without the addendum.
Yet another way you’ll know it’s either a CMHC repossession or a foreclosure is that it will include the following wording: “Sold As Is Where Is – No warranties or representations.” Again, that can be found either in the public or private comments of the listing.
As you can see, the National Post article was completely a non-story. For whatever reason CMHC doesn’t want it brokerloaded in the database as a repossession, but that it no way prevents buyers from knowing that it was CMHC that was selling the property. The buyer would HAVE to know that it was CMHC in order to fill out the purchase contract and Addendum/Schedule in the first place.