(public).sospep.subjects ~ view article ~ vancouver-housing-real-estate-technique-fuelling-vancouvers-market

<h1 style="text-align: center;">SUMMARY - the real estate technique fuelling Vancouvers housing market</h1>
<h2>[WHAT]</h2>
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<li>] by Kathy Tomlinson @ theglobeandmail.com - an investigative look into the practice of shadow flipping, a legal technique that realtors can use to realize quick profits in a red hot housing market</li>
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<h2>[WHY]</h2>
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<li>]&nbsp;</li>
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<h2>[WHERE]</h2>
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<li><strong>] READ THE FULL ARTICLE</strong></li>
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<li>]&nbsp;<strong><a href="http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/" target="_blank">the real estate technique fuelling Vancouvers housing market</a></strong></li>
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<h2>[WHEN]</h2>
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<li>] 2016-02-06</li>
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<h2>[EXAMPLE - summary manual]</h2>
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<li>] The Rappaports&rsquo; home, on Vancouver&rsquo;s West Side, would net the couple $5.2-million last year.&nbsp;</li>
<li>] bought the stately Craftsman home in 1987 for $362,000.&nbsp;</li>
<li>]&nbsp;the neighbourhood had changed.&ldquo;It used to be the prettiest block,&rdquo; Ms. Rappaport said. &ldquo;And it has been a construction zone for the last two years.&rdquo; Investors were razing the houses and it was time to move on.</li>
<li>]&nbsp;The couple suspected the house would be torn down, like so many others on their lush and lucrative street, but they stood to profit nicely</li>
<li>] For reasons the Rappaports never quite grasped, <strong>they were no longer selling their property to the foreign businessman whose offer they had accepted.</strong> Instead,<strong> they were selling to <span style="text-decoration: underline;">his</span> real estate agent,</strong> Wayne Du of Amex Broadway West Realty, who told the Rappaports that he and the businessman&rsquo;s wife would be purchasing instead, as co-owners.</li>
<li>]&nbsp;The Rappaports weren&rsquo;t thrilled, but there was nothing they could do to prevent it. Their contract, after all, contained what&rsquo;s called an<strong> &ldquo;assignment clause,&rdquo;</strong> which gave the businessman <strong>the option to sell or transfer his interest in the property before the closing date.</strong></li>
<li>]&nbsp;Three months after the deal closed, <strong>the new broker-owner relisted the house &ndash; which he then had a stake in</strong> &ndash; and <strong>resold it for $6.2-million</strong>, a substantial if not unusual price increase that works out to roughly $11,000 a day.&nbsp;</li>
<li>]&nbsp;Mr. Du is <strong>now advertising the house for sale again for $6.58-million.&nbsp;</strong></li>
<li><strong>]&nbsp;</strong><strong>It&rsquo;s all perfectly legal,</strong></li>
<li>] Assignment clauses are <strong>an obscure but increasingly ubiquitous feature of domestic real estate transactions in B.C.&rsquo;s Lower Mainland</strong>, where feverish real estate prices have triggered a frenzy of buying and selling, and a national debate about the risks of an overheated market and the role of foreign investment.&nbsp;</li>
<li>] As part of an ongoing investigation into the phenomenon, The Globe and Mail examined scores of transactions and hundreds of records, and spoke with more than a dozen real estate agents and observers to understand the role of assignments in the Vancouver market.</li>
<li>]&nbsp;The findings shed light on an opaque and speculative realm of the housing market, in which properties are traded one or more times before a deal closes &ndash; legal but controversial flipping that creates opportunities for agents to make multiple commissions and investors to profit tax-free from houses that are not yet technically in their possession.&nbsp;</li>
<li>]&nbsp;Because assignment sales are rarely listed publicly, they have created a thriving grey market that is accessible largely to investors, speculators and real estate agents who have insider information.</li>
<li>]&nbsp;What&rsquo;s more, the assignment market appears to reward neither the original seller nor the ultimate buyer, despite pushing prices higher and higher: Sellers receive less for their properties than what buyers are finally willing to pay at the end of the chain. And buyers &ndash; many of them foreign or backed by foreign investors &ndash; pay more than they would have to if the middlemen weren&rsquo;t involved.</li>
<li>]&nbsp;The resulting distortions threaten to strain the public&rsquo;s trust in the real estate brokerage business, according to some in the profession, while others openly question the sustainability of a market they are heavily invested in &ndash; and helped create.</li>
<li><strong>]&nbsp;&ldquo;It worries me a lot that this could all come crashing down</strong>. I worry about it all the time,&rdquo; said one <strong>Re/Max agent, Khalid Hasan, who said he owns or co-owns 15 to 20 properties, all destined for resale.&nbsp;</strong>&ldquo;<span style="text-decoration: underline;"><strong>A lot of people are just assigning and flipping in this market</strong></span> &ndash; because they can make more money,&rdquo; said Mr. Hasan, who said he&rsquo;s bought several properties through assignments. <strong>&ldquo;We witness assigning all the time &ndash; crazy assignments.&rdquo;</strong></li>
<li><strong>]&nbsp;</strong><strong>many agents make quick, easy money charging fees for arranging assignments</strong> &ndash; up to $50,000 a deal &ndash;<strong> others go for bigger profit by buying and selling houses themselves.</strong></li>
<li><strong>]&nbsp;anecdotal evidence of a brisk insider game abounds &ndash; the vast majority of it legal, </strong>though some running afoul of regulations enforced by the Real Estate Council of British Columbia.</li>
<li><strong>]&nbsp;&nbsp;&ldquo;They are feeding into the market and making it hotter, while padding their commissions. It&rsquo;s just so toxic.&rdquo;</strong></li>
<li><strong>]&nbsp;By law, brokers must tell buyers and sellers, in writing, if they have a personal interest in a deal</strong> before the offer to purchase is accepted. <strong>They&rsquo;re also required to inform sellers if they plan to resell.</strong></li>
<li><strong>]&nbsp;</strong></li>
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<h2>[HOW-TO]</h2>
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<li>]</li>
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<h2>[REFERENCE]</h2>
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<li><strong>[2016-02-06]&nbsp;<strong>vancouver-housing -&nbsp;</strong>speculation&nbsp;</strong></li>
<ol>
<li>] by __ @theglobeandmail.com - a look at how some realtors are "shadow flipping" vancouver houses using a legal contract loophole for fast profits.&nbsp;</li>
<li>] r/canada -&nbsp;<a href="https://www.reddit.com/r/canada/comments/44hb35/the_real_estate_technique_fuelling_vancouvers/" target="_blank">comments</a>&nbsp;-&nbsp;</li>
<li>] r/vancouver -&nbsp;<a href="https://www.reddit.com/r/vancouver/comments/44f3c4/the_real_estate_technique_fuelling_vancouvers/" target="_blank">comments</a>&nbsp;-&nbsp;</li>
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<h2>[RELATED]</h2>
<ol>
<li><strong>[2016-02-dd]&nbsp;</strong></li>
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<li>] # # -&nbsp;kathy-tomlinson - AMA</li>
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<li><strong>[2016-03-dd]</strong></li>
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<li>] #&nbsp;<a href="/view/article?id=4945" target="_blank">4945 - vancouver-housing</a>&nbsp;- an overview of the current situation in the vancouver housing market</li>
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<h1 style="text-align: center;">&nbsp;</h1>

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