Thursday, 5 June 2014

Why in the world would anyone rent a furnace? A cautionary tale...

I was very excited to be listing a wonderful Victorian era home. Resplendent with original heavy trims and mouldings, hardwood floors and high ceilings, it was a classic. I don't mean for this to read like a real estate ad but, forgive me, the place had  "Curb Appeal". As my usual check-list progressed, the sellers informed me the furnace and air conditioner were rentals and explained it thus.."It's just like renting a water heater. If anything goes wrong with it, they will come and fix it. For Free!"
A little nagging feeling came over me the one I call Scam Radar. I have innate scepticism inherited from my mother who has never felt wool on her eye-lids and has been know to engage in loud public disagreements with people much larger than her 5 foot frame. While it used to embarrass my teen-aged self, I have probably turned into my mom- just a teeny little bit.
There I was, about to have the listing papers signed by my clients who have placed their faith in me and I am stymied by the rental furnace and air conditioner. I asked for the contract and took it away with me to study  under a high powered microscope to make out the .00010pt font normally reserved for the war measures act when sending top secret messages to heads of state. I'm still not sure if it was even in English.
Next stop, the lawyer's office, where they create small font. My friend and real estate lawyer, Peter, invited me into his office where he too attempted to read this contract. Neither of us could, with any certainty, decipher whether the contract could be terminated or at what cost. There was a vague reference to "at the end of 15 years" but no buy-out amount. Peter wrote a stern letter to the company requesting the buy-out amount and a response asap. To this day, some weeks later, the company has not replied to that letter.

Further digging at my computer revealed this heating company had many complaints against it for unfair business practices, unresolved complaints with the BBB and was being investigated by consumer affairs.
 This is how they would operate: Salesmen come to your door usually in the evening with an official looking clip board and vague claim of association with the gas company and ask to see your furnace. Once down there, if the furnace is a little older, they tell the home owner that A) the furnace does not meet current standards, B) the furnace will not last the heating season, or C) The furnace is not energy efficient and you will save money by installing a new high efficiency unit. . Bottom line, you need a new furnace asap. Like a saviour, they offer to install a new high efficiency furnace for a mere $59.00 per month and AC for 59.00/ month and you will never have to worry again. Not only that, you qualify for government rebates of $300.! Thousands of people were duped into renting their heating and cooling equipment  tying them to ridiculously expensive and restrictive contracts which seem to run indefinitely. If you do the math,  a furnace and AC unit at $119.90 per month, plus the 3.8% annual rental increase written into the contract amounts to one million dollars after 15 years. Ok, math is not my strong point buts it's still $21,600. not counting the annual rent increases. You might ask, well what about the ten day cooling-off period for in-home sales? Another interesting tid-bit I discovered is rental contracts are not covered under the 10 day cool-down consumer protection rules. Besides, the furnace is installed within about twenty minutes after the contract is signed. I wonder if they are that quick to respond to service calls?.
My client, meanwhile, made her own inquiries with the original heating company and was transferred to a different company who apparently bought the contract from the heating company. Confused? Me too!
There was a lien registered against their property by a mortgage trust company which could be paid out for $12,800. and release the home owner from any further obligation.
 To put that figure into perspective, I called a few local heating companies and was quoted a purchase price of about $6000. for a high-efficiency furnace and central air- installed.
My clients received three offers on their house and accepted one with the stipulation that they buy out the furnace and air conditioner contract for the purchasers.
Bottom line:  home buyers do not want to assume rental contracts for heating and air conditioning and more so lately, water heaters. Purchase your equipment outright from a reputable local contractor and if you cannot pay cash, there are some companies which will finance the purchase.
Guess what I found in the basement of my next new listing?

Thursday, 29 May 2014

Unreal Realtors

If the folks at HGTV have their way, the public would believe that we professional Realtors are pushy unethical salespeople who view clients as foolish prey. Just watch any of the plethora of realty reality programs, where you won’t find any of the common variety of Realtors (read boring and ethical).
Take for instance the popular Love it or List it. Premise of the show; a young family is squeezed like the first Polkski Ogorki at the top of the pickle jar into a teeny weenie house somewhere in Trendy Downtown Toronto. Oh the deficiencies, the anguish of the too small bathroom, the kitchen with five doors and disco era cabinets. The couple are torn between fixing the untenable living conditions or moving to a new home. One partner wants to stay and renovate while the other, well you know…
 Breezing through the front door are the would-be saviors; The savvy cougerish, and ever polished Hilary, designer extraordinaire, and David, the Flamboyant, bombastic and caustic Realtor. From room to room they wander sans homeowner and make snide remarks about the homes’ lack of modern conveniences or functionality.  David panders to the camera with even snider asides about Hilary’s abilities (he secretly has a schoolboy crush on her).  They meet with the hand wringing couple who sit side by side, the tension between them akin to a pair of scrappers in the principal’s office. The spouse who wants to stay reveals the budget for renovations – usually the whole place needs a do-over- and they can spend about 565 bucks. Well maybe a bit more… but far short of what real contractors would charge for the extensive work. Hilary is briefly perplexed at the figure but with a cheery determined nod says “I think I can swing it”. Then David is given a wish list which always demands that the location remain in the Trendy Downtown neighbourhood plus, be larger, with more bedrooms, bathrooms, a finished rec room and deluxe kitchen. They can spend an extra 10k. David remains positive and although David’s brokerage is located in Alliston, the Potato Capital of Ontario, feels he can source some suitable homes for the couple in their demand location.
While David begins showing the couple homes in the area within the price range, Hilary starts the demo.
 I have always felt that dragging a client kicking and screaming through the door does not make for good client relations or future referrals. It does make for interesting TV and when David, bless his heart, inevitably comes up with a whack of duds worse than the couples’ existing house, things turn ugly. They need a three bedroom two storey, he shows them a two bedroom backsplit. They want a big private backyard, he takes them to a place where the Gardiner Expressway is the neighbour on two sides. But “Oh look at this fabulous pantry” he coos over the smelly cubby hole beside the kitchen sink and when the wife is incredulous , he makes a series of faces a mother would love to smack off of him.
 Meanwhile, back at the ranch, Hilary has pretty much gutted the place and awaits with…you guessed it, Bad News. For a designer with decades of experience, she is nonetheless shocked to discover; knob and tube wiring, galvanized plumbing, asbestos insulation, a buried oil tank and also that the house sits atop a Sacred Indian Burial Ground.
Shock, anger and disappointment ensue as Hilary now must fix the structural, environmental, plumbing and electrical issues before getting to the pretty stuff like drywall and toilets. Also Shamans charge an arm and a leg these days. Now, the only work she can complete is the front hall closet. Crestfallen, the couple begin another round of bickering and blame.
Round two begins with David driving the couple far from the comfort zone of Trendy Downtown Toronto to the Ozark Mountains of Arkansas where their dream house exists within their price range. The producer likely patted down the couple for weaponry because the drama ramps up as the odometer spins.  Ok, the house is nice but the nearest school is a 90 minute bus ride for the kiddies, Starbucks is in the next county and there isn’t even a Bruno’s , Anywhere!  When they eventually return from the road trip, Hilary has miraculously completed the renos and all is revealed.  Gasps and tears well up in the spouse who got the dream front hall closet and now they must decide to love that damn closet or list the house, get a Winchester 306 and move to them thar mountains.

Tuesday, 15 April 2014

Farida Jones: Bless those Property Brothers

Farida Jones: Bless those Property Brothers: Bless the Poperty Brothers Farida Jones Barely getting through another episode of Canada's Property Brothers.  My eight year old ...

Bless those Property Brothers

Bless the Poperty Brothers

Farida Jones
Barely getting through another episode of Canada's Property Brothers.  My eight year old daughter is a big fan but I hope against hope that she does not adopt the attitudes of the whiny demanding buyers portrayed as house hunters in the show.  This episode featured a ditzy blonde with fully bleached hair and matching teeth,  fun flirty outfits changed for each viewing like it is a Cher concert and an accessory partner/husband who appears oddly tattooed and pierced wearing what appears to be my granddads undershirt and plaid pants and who blurts out things like " This whole demo thing is like Totally intense". You get the picture. So here's the premise of the show in case you've never watched. The Real Estate Bro takes a couple through three sub- standard homes- priced below the buyer's budget and gets a negative reaction. Some notable comments; " oh my God, that is so totally disgusting I can't even go in there" or "I wouldn't want my food to get anywhere near that counter- its so grodie" yes, she said grodie. Or "The yard is like totally a jungle". It appears the buyers idea of a first time home is based on Prince Charles and Camilla's' Royal Apartments Revealed. After the shock value of presenting the pampered Yuppie larvae with how the other half live, he then he takes them through a home that completely surpasses their expectations wowing them into euphoric expectation. Moments later, he cruelly dashes  their hopes by revealing the price to be double their budget. So harsh, Real Estate Bro! The emotional rollercoaster jerks over the rise once again when  Contractor/ Designer Bro sweeps in with his lap top and introduces them to this thing called an imagination via his virtual designer program. Hence, all is not lost. Now, without any real work, the brothers will magically transform the  "scary" house they settle on into a fabulous designer den that will be the envy of all their friends. Did I say without any work? Well, that's not really true. I forgot...the potential buyers show up at the house for the demo- usually wearing awesome outfits which in this episode included fishnet tights and weird booties...and that was the guy. I thought the WSIB should have been called because the 10lb sledge hammer weighed more than the guy or gal wielding it. Can you say momentum? Suffice to say, the kitchen did not get the demo job it deserved. So in the end after lots of ewwww grosses, the big reveal happens with the requisite Oh-my-God-I can't-believe-its and they live happily ever after. What ever happened to the enchanted wonderment of first time buyers who were content to just own a piece of real estate and fix it over time?