Going under

Here’s a safe prediction for you: expect far more media stories in the coming months on people being eaten by their houses. The latest was a TV news piece in Ontario Thursday night about a woman who fears losing her home since she cannot make outrageous mortgage payments to her private lender.

Why borrow from a high-rate sub-prime mortgage broker? Because she didn’t qualify for a bank loan. B20.

Lately housing anguish and suffering is all around us. There are the Mattamay Homes Refugees who think it’s unfair they paid $1.5 million for unbuilt houses at the peak which are now worth less. They cannot close deals, they say, since their existing homes have fallen in value. The company says, tough.

Then there’s blog dog Derek, whose tale was told here, then repeated across Canada in most media outlets. Buyers who ponied up $2.25 million in a bidding war for his house last spring walked, got sued, lost and now face a $470,000 judgment, plus having surrendered their deposit. Derek told me last night he saw one of the buyers in court this week as writs were issued against their property. “We actually felt really bad for him,” D says, “as he really appeared to be a broken man. But we gave him every opportunity to just close on the house. Really would have been the smartest thing to do.”

You bet. The fools will spend half a million and have nothing to show for it. Closing would have been so much wiser, securing an asset which may eventually rise again.

But not soon. The numbers are getting worse.

New house prices in the GTA, for example, just dropped by the largest amount in eight years – since the financial crisis. A 8% year/year surge last year has turned into negative numbers now, as sale prices in February fell more than 7% year/year. The reason, Stats Can says, is a rise in mortgage rates plus B20. The real underlying reason’s even simpler: few can afford a new detached house going for $1.2 million.

The result is an 82% crash in single-family home sales from this time last year, to a level almost 80% below the 10-year average. Condos aren’t immune, despite the price surge there. Sales of new units have crashed 50% in a year, reflecting the exodus of speckers, flippers and amateur landlords who face negative cash flow.

Meanwhile, something far more sinister is happening. Families continue to siphon equity out of their houses to do things like pay existing debt. HELOC borrowing has not slowed down even as real estate sales crunch across the country. The latest stats show Canadians have withdrawn (and spent) more than $283 billion from their houses – a number which is escalating almost 8% a year.

As mentioned here before, more than four in ten of those families are not paying back their home equity loans, while a quarter make interest-only payments. Thus, the debt load continues to escalate monthly as the outstanding balances grow. It’s a disaster in the making, since most HELOCs are demand loans at variable rates. As the Bank of Canada moves higher (looks like May could bring the next increase) that $283 billion will require over $700 million in additional payments each year.

That’s a ton of money to rip out of family budgets and send to the lenders (the banks). In total, Canadians now hemorrhage about $8.5 billion a year on HELOC interest payments, or tack it onto their outstanding loans. As interest rates rise, so will the toll. And if real estate values tumble in any particular location, lenders have the absolute right to demand immediate repayment of all or a portion of the borrowing to maintain LTV (loan-to-value) ratios. Go ahead. Read the fine print on your HELOC. Inebriate yourself a little first. Or a lot.

The tales of woe have just begun and as they ripple across the MSM, spill onto FB and into Twitter, the meme will spread of just how much risk is contained in residential real estate. Don’t plan on a quick drop, followed by a rebound. Instead, a steep correction, then a lengthy melt.

Derek will look like a genius.

264 comments ↓

#1 TheDood on 04.19.18 at 5:26 pm

Hopefully…..FIRST!!

#5 RentYVR on 04.18.18 at 6:03 pm

…..If anything, I hope that the BoC considers a rate cut next time or at least signal that the current levels will remain until we actually require them to be raised.
_______________________

LOL!

Like that’s gonna happen!

Look at the debt pickle the whole country’s in due to low rates for so long. You think lowering it again is a good idea??? I think the lesson learned going forward is to never again have borrowing rates that low for any reason. Canadians have proven they will borrow themselves into oblivion.

#2 Happy Housing Crash Everyone! on 04.19.18 at 5:26 pm

Fake sold signs are very common in the GTA. dirty SHYSTERS are LAZY and LIE for money. Tip of the SHYSTER iceberg.

http://www.vancourier.com/real-estate/richmond-realtor-duped-buyer-into-displaying-sold-sign-for-a-year-1.23270189

#3 Honey Dripper on 04.19.18 at 5:31 pm

This it seems is the only way fools learn and when fools rush in… you know

#4 Happy Housing Crash Everyone! on 04.19.18 at 5:32 pm

Canadians will borrow until their BANKRUPT. These Canadians have no intention of paying back anything . many will just go bankrupt and laugh. Peoppe have been borrowing fake equity from their homes via HELOCS to pay their mortgage. yes pay the mortgage using debt. it’s a house of cards. Happy Housing Crash Everyone Everyone !

PS. I hate you vermin SHYSTERS. You really are useless to society. PS you mortgage brokers are also useless SHYSTERS

#5 Khuy on 04.19.18 at 5:38 pm

Mark my words, those who don’t buy now, will regret in a few months!

#6 Mark on 04.19.18 at 5:44 pm

Don’t know if the issue will be BoC policy rate increases, but rather, the banks themselves continuing to grow spreads as consumer credit-worthiness drops along with falling home equity and diminishing job prospects for a large swath of the Canadian working population that either works in housing, or works in industries that are significantly correlated with housing.

Either way, lots of pain to come. First time buyers have largely been absent from the market in the post-peak era (2013-present), and the supply onslaught may even accelerate in the coming few quarters as developers race to liquidate their inventories, plant and machinery as quicky as possible.

Of course if you’re a buyer, if you have diligently been socking away your savings, things should get much nicer over the next few years.

#7 slam on 04.19.18 at 5:47 pm

Colleague just received a letter from one of the big 5 about his HELOC. This bank will increase his current rate of prime + 0% to prime +0.5%.

I thought he would be able to keep his prime + 0% but was surprised the +0% could change any time.

#8 Stan Brooks on 04.19.18 at 5:49 pm

The biggest achievement we ever had was continuing to sell successfully hope/illusion/lies to the sheeple.

So successful as the sheeple was so stupid that we soon bet the whole house on it. it was profitable.

We will soon witness the limits of such policies. Human stupidity could be limitless as Einstein stated but the ability of exceptionally stupid group of individuals to survive in an open and competitive world is well, limited.

==========================

All these attacks on gold are really strange.

It is recognized financial asset by pretty much everyone, except the author of this blog and no, it does not suck as an investment.

===========================

As for the banks: no doubt that they will not fail.
But the ability to extract consistently increasing profits in a doomed economy is pretty limited in my opinion.

We are already over financialialized at least 3-4 times when compared to normal countries how farther can this go? Not much in my opinion.

#9 IMHO on 04.19.18 at 5:50 pm

#4 …”These Canadians have no intention of paying back anything . many will just go bankrupt and laugh”…

Garth can correct me, but I believe Alberta is the ONLY province in Canada that offers non-recourse mortgages.

Defaulting on a non-recourse loan roughly means you lose your house — but can walk away from the debt.

#10 Eco Capitalist on 04.19.18 at 5:51 pm

We’re headed for a hell of a time.

Quoting hair metal; I’m dating myself there.

Glad I found this blog when I did. I can sit this mess out and watch from the sidelines, my only worry is what the popcorn is doing to my waist line.

#11 slam on 04.19.18 at 5:52 pm

#5 Khuy on 04.19.18 at 5:38 pm
Mark my words, those who don’t buy now, will regret in a few months!


Can you please explain why?

#12 Bad Math on 04.19.18 at 5:54 pm

Again with the callable HELOC fear mongering! If you insist on overstating the possibility of this occurring, at least five an example of another time in history where banks have called HELOC’s in anything other than the most dire circumstances.

At worst, a few financially irresponsible people who bought beyond their means at peak house might raise some bank eyebrows. But it’s in the banks interest not to call the loan because as you so eloquently spent many paragraphs explaining, it’s a gold mine for them.

#13 Guy in Calgary on 04.19.18 at 5:55 pm

$55k down and $650k mortgage at 11.99% in the article. $6k monthly mortgage payments.

“I was planning to refi after I moved in”

Why, why, why, why, why, why, why, why, why, why!?

Probably a gifted down payment too. $55k up in smoke, credit destroyed and out on the street. I am sure they will blame the banks, the government, the media, the realtors, the brokers… but god forbid these people take a look in the mirror.

What pisses me off is we have the internet. Do some googling for 20 minutes and you learn basic personal finance. This person could have gone on the internet, done an hour worth of research and avoided ruining her financial life.

The financial illiteracy in the country is a joke.

#14 Bobby on 04.19.18 at 5:57 pm

This isn’t new, we’ve seen this all before. I watched it unfold in Ontario in the 90’s. As you have stated on countless occasions, it is no different here. No, real estate doesn’t always go up.
Watch this become an election issue as those losing out will want the government to step in and bail them out. Imagine if Mattamy Homes had said they wanted out of the deal because costs had risen so much, I’ll bet the same buyers would say tough, we have a contract.
We’ve always known that the majority of Canadians are financially illiterate, now we’ll see just how badly.
This will not end well.

#15 Bob Dog on 04.19.18 at 5:58 pm

“Are there no prisons?”

“And the Union workhouses?”

“Are they still in operation?”

“The Treadmill and the Poor Law are in full vigour, then?”

#16 Freebird on 04.19.18 at 5:58 pm

Short video on divorced dad with young kids in Van showing you can rent (not need a SFM) to be happy or be a great dad…

https://youtu.be/skaoQy04EjU

#17 Guy in Calgary on 04.19.18 at 5:59 pm

CU’s tightening lending here as well.

As for the HELOC’s, it isn’t even fine print. States right on the paperwork that it is a demand loan. It’s not hidden. It then lists what the security is. Not rocket science what the implications are.

#18 I’m stupid on 04.19.18 at 6:00 pm

#5 Khuy

Risk is back in housing. People have fooled themselves into believing houses only go up in value. Now that reality has entered the market the only sales occurring are from people that want shelter.

I can’t see a scinario where things turn around for housing in the foreseeable future. Remember that bankruptcies are at historical lows. That’s not a good thing because most debt has been housing related and since hosing has been very liquid, selling and paying off debt has been possible. Now with housing becoming illiquid look for the bankruptcy rates to begin to spike.

I think we’ll be in a recession in the next 2 years. It might not be a national one but the GTA will experience a downturn because households will stop spending.

#19 Edward on 04.19.18 at 6:00 pm

If you read the Star piece carefully, you’ll see that Derek’s buyers could not close the deal. Their approved financing was insufficient. So yeah, they were just plain stupid to make an unconditional offer on a place they could not afford. Nevertheless, if “Derek” had an ounce of humanity, he would have given them a pass.

#20 Sebee on 04.19.18 at 6:02 pm

I don’t know about that slow melt Garth.

Sure, these debt junkies are going to cling to hope and refuse to list at loss. But the Boomers are going to start freeing up some serious inventory soon, right?

#21 Stan Brooks on 04.19.18 at 6:02 pm

Putting the fault solely on Derek’s house buyer is immoral.

But hey, what does ‘moral’ really mean here? This is Canada.

The guy just bought a house on a market.
It is not his fault that market was over hyped by real estate con artists, who will not be prosecuted for their propaganda, by government statements that there is no bubble (all these documented in the press) and that house prices will keep rising.

He was simply misled by professional con man.

Of course legally that is not the case but frankly I do not put a single flying f..k/fart’s worth in the legal system of a place that puts it’s citizens in such situations intentionally and then laughs at them.

Total destruction of trust.

#22 S.Bby on 04.19.18 at 6:04 pm

“they paid $1.5 million for unbuilt houses at the peak which are now worth less.”

Can you imagine what those houses would be “worth” if interest rates were fully normalized? Likely not even half of $1.5 mill.

#23 Sam Cooper Takes over Global on 04.19.18 at 6:04 pm

In new role with Global Sam Cooper blowing the doors off in Canadian media.

Top trending story on Global that is on fire and eclipsing the Humboldt tragedy. These are big numbers for Global.

What is the subject with video detailing all you need to know in the West in BC?

How Chinese gangs are laundering drug money through Vancouver real estate

Hopefully Garth takes the time to view this video.

https://globalnews.ca/news/4149818/vancouver-cautionary-tale-money-laundering-drugs/?utm_source=Article&utm_medium=MostPopular&utm_campaign=2014

#24 dakkie on 04.19.18 at 6:05 pm

Canadians Are Going Broke! – Interest Rates Are Going Up

http://www.investmentwatchblog.com/canadians-are-going-broke-interest-rates-are-going-up/

#25 Dirty Developers on 04.19.18 at 6:06 pm

Funny how the developer can cancel your contact and give back your deposit in a rising market so that they can pre-sell your condo/house again at a high price

BUT if prices drop after you signed the contract and given a deposit, then tough SH_T.

I hope people who had there deposit returned in a rising market get together and sue these dirty developers. Only thing more filthy and scummy than realtors are developers.

#26 Sam Cooper quotes from today that will blow your mind on 04.19.18 at 6:06 pm

“connections in Chinese military and politicians at the high level increasing land holdings, weapon holdings and corrupting every program that you can imagine in BC.”

One example: “ICBC crash claims – year after year the same people crashing into one another and making fake claims, staged crashes, linked to Triads gang activity recouping big money through ICBC.”

“hells angels have corrupted Vancouver Ports working as local employees for the Triads.”

“large scale corruption since the 90s by Chinese organized criminals within BC that the government is fully aware of.”

#27 Former RCMP superintendent Garry Clement on 04.19.18 at 6:09 pm

Former RCMP superintendent Garry Clement served as director of the Proceeds of Crime program, an undercover investigator and as liaison officer for Canada’s Hong Kong embassy.

Clement said that the allegations laid out in Langdale’s report — specifically, that Triads are producing deadly chemical narcotics in Chinese factories, shipping the drugs to B.C., and laundering proceeds of crime in Vancouver real estate before returning funds to Chinese factory production — are completely accurate.

Clement and an immigration control officer uncovered an alleged Triad immigration fraud that they say allowed the gangs to gain a foothold in B.C.

#28 young & foolish on 04.19.18 at 6:10 pm

So, debts do matter after all? I guess we are heading toward a recession.

#29 cto on 04.19.18 at 6:16 pm

i agree with Khuy!
this is just a small bump in the huge not to distant gains to been made in real estate!!!
…..Right?????

#30 Dirty Shysters on 04.19.18 at 6:16 pm

The dirty shysters are just lazy humans taking an opportunistic situation created by fentanyl for cash for real estate burning out of control in BC.

Making this kind of snow washed money that is supposedly legitimate once in real estate has never been easier.

How are news listing prices coming out in Ladner and Tsawwassen creeping back up to the 1.3M mark after cooling down to the 1M mark the past few months?

Answer: read the first sentence in this post.

Check out the out of this world price points on new listings in Richmond, BC. High 2s and low $3M becoming the norm for detached in Richmond. Nuts.

#31 scooby doo on 04.19.18 at 6:17 pm

Canadians will borrow until their BANKRUPT. These Canadians have no intention of paying back anything . many will just go bankrupt and laugh. Peoppe have been borrowing fake equity from their homes via HELOCS to pay their mortgage.

Hi Garth. What are the financial implications–both short and longterm–of declaring bankruptcy in this country?

#32 Whinepegger on 04.19.18 at 6:19 pm

@ Happy Housing Crash

What I wouldn’t give to be a fly on the wall when those declaring bankruptcy find out it’s not a get out of jail free card and they’re forever on the hook for the difference between what mortgage insurance gives the bank and what they owed. oops!

#33 Penny Henny on 04.19.18 at 6:19 pm

The result is an 82% crash in single-family home sales from this time last year, to a level almost 80% below the 10-year average.-Garth

????

Are you talking NEW homes only? Cause no way that includes re sales

As stated, new houses. – Garth

#34 Jay on 04.19.18 at 6:19 pm

10 to 15% drop in prices by August then slow melt for another 25%. Before levelling off,
Will take 25 years to reach these prices.
That’s how long it will take for wages to catch up.
For anyone thinking prices will be back sometime this year or next year are dreaming.

#35 Graeme on 04.19.18 at 6:20 pm

Generally speaking then, a good time to extract HELOC money and invest it? Or not? Obviously there’s financial markets doing their volatility thing to consider as well as the housing market melt. (I ask because I’m up for renewal in June and I am in the process of doing exactly this!)

#36 Oft deleted much maligned stock.picker on 04.19.18 at 6:22 pm

There has never been a V shaped recovery in the real estate market…..it always ends with a slow grinding death of a thousand cuts over a decade or more. The negative equity will duel the add pain to the rising interest rates…..ouch……month after month….year after year of gut wrenching ball kicking pain.

I’m visiting Vancouver Island, real estate wise it’s like Disneyland…..with old freaks and tall trees. Van Isle Board is spitting confidence that a seller’s market exists…..in spite of thousands of listings that don’t seem to selling…. I’m reminded of an old magicians trick where the prestigitator uses levitation to stun the audience into dumb silence. A sensible person knows better. After all …how can prices remain bouyant without sales?

I’m thinking that there are quite a number of influential Islanders who have bought to speculate and would hate to see a public bathing of statistics flood a complacent media. Knowing what I know…..the thing that moves the market needle are the forced sales…death…delinquency….transfer… divorce….sudden institionalization and court ordered sales…..

There simply can’t be this many listings and a seller’s market existing simultaneously.

#37 Ex-Cowtown on 04.19.18 at 6:22 pm

“As mentioned here before, more than four in ten of those families are not paying back their home equity loans, while a quarter make interest-only payments. ”

+++++++++++++++++++++++++++++++++++

G-Man, are you sure those numbers are correct? That would mean that 65% of the homeowners are in some form of financial distress? It only took 10% of US homeowners to get into trouble and that screwed up the Excited States for a decade.

I hope I’m missing something or we’re going to show those silly Yanks a thing or two on how to tank an economy.

Government numbers. – Garth

#38 Mark on 04.19.18 at 6:22 pm

“Fake sold signs are very common in the GTA. dirty SHYSTERS are LAZY and LIE for money. Tip of the SHYSTER iceberg.”

The sign wasn’t fake, nor was there any lies involved. The professional misconduct that the Realtor in question was guilty of was with respect to inserting a condition in a contract that was not in the interests of the seller. In other words, she failed to act as a faithful agent of the seller, and had a clause inserted into the contract for what appeared to be her own personal advertising benefit.

Certainly ethically problematic and fits with the well-known narrative that RE sell siders have been quite active in exaggerating the state of the market in the post-2013 peak era. But I don’t think the adjectives of “LAZY” nor “LIE” really apply here. “Ethnically challenged”, sure.

FWIW, instead of a fine that was merely paid to the Realtors themselves, by the Realtor, she should have been forced to compensate the buyer and seller for the post-sale advertising she illegitimately appropriated from them.

#39 toronto1 on 04.19.18 at 6:23 pm

The more negative press is out there the more that sentiment will turn negative for RE.

From the few conversations i have had with some buddies in the finance industry- the number one issue is mortgage origination’s- the numbers are way down- thats future demand way down. Numbers are running below even the banks lowered “quota”

expect RE to get much worse before it gets better

#40 How much money is needed to silence Sam Cooper? on 04.19.18 at 6:25 pm

Apparently more than anything put forth to date.

The tales of woe have just begun and as they ripple across the MSM, spill onto FB and into Twitter, the meme will spread of just how much risk is contained in residential real estate?

More like the tales of money laundering hitting MSM Global News is creating major anger among BCers ready to bring out pitch forks.

BC Liberal = fail

Crudea Federal Liberals = fail

Liberal Party = complete failure.

Nice knowing you Justin you sell out.

#41 NRI13 on 04.19.18 at 6:27 pm

As much as i believe every single statistic on this website at varying points throughout the years i have read, the reality on the ground per se seems and feels different. Even with the declines, realtor brokerages (clients) are doing brisk business. Anecdotally, houses in mississauga are selling pretty much at near asking prices. Cheers

#42 Moister Miller on 04.19.18 at 6:30 pm

@ #2 Happy Housing Crash

And on $2000 in fine? That’s totally worth it, considering the commission on a $1.5million dollar house. Tiny expense for a huge reward.

#43 Nonplused on 04.19.18 at 6:35 pm

The government has a plan to get the HELOC epidemic under control! Raise consumption taxes to 30% via the so called carbon tax, jerk small business owners around so they pay the same as government employees, and raise interest rates! Also raise income taxes, property taxes, and land transfer taxes! Why wouldn’t that work?

Realistically I think it was the plan all along. Governments, especially Canadian governments, have grown way beyond the ability of the economy to support. So they raise taxes anyway and force everyone to borrow against the house to survive. Keeps the debt off the government balance sheet. I don’t think it’s sustainable though, it requires constantly rising equity prices to sustain, in this case house prices in particular.

The problem with debt financed schemes of this sort is that the longer they go on the more unstable they become. And I think things have gotten so far out of hand a “Minsky moment” is a real possibility. (That would be the point where enough people recognize that the game is unsustainable and head for the exit all at once, thereby creating a self-fulfilling prophecy.) And it doesn’t take much to trigger it. Denise’s story is even being picked up in the US, although they call him Douglas. Once the mainstream media starts reporting on some dude losing $470,000 on a $2.2 million deal, (that’s 21% of the purchase price!) people will take notice.

#44 dr talc on 04.19.18 at 6:37 pm

I hope Derek gets paid, but he doesn’t deserve it, because he’s a greedy bastard.
9k deposit on 2 mill = deadbeat
Pay a further deposit = deadbeat
The purpose the deposit is to show good faith and become part of purchase price
No good faith here

#45 Timmy on 04.19.18 at 6:37 pm

And yet again, Polz didn’t raise rates–you neglect to mention that. Pro-housing Bank of Canada Govenor who wants to keep the housing market inflated.

#46 Stan Brooks on 04.19.18 at 6:41 pm

#19 Edward on 04.19.18 at 6:00 pm
If you read the Star piece carefully, you’ll see that Derek’s buyers could not close the deal. Their approved financing was insufficient. So yeah, they were just plain stupid to make an unconditional offer on a place they could not afford. Nevertheless, if “Derek” had an ounce of humanity, he would have given them a pass.

===========================

Humanity? In Canada?

Sigh.

#47 Fentanyl for Keeping Your Sold sign up on 04.19.18 at 6:42 pm

Extra bonus if you add the “sold above listing price” to it.

We have packages that range from:

1 – 9 year contracts in keeping your sold sign up as we anticipate a typical 10-year slump.

#48 ben on 04.19.18 at 6:42 pm

FED talking about 4 rate rises.

Carney in the UK trying to delay raising rates again. Gilt yields continue to rise as this one-trick pony (cut rates then cut again) nears the end game.

Can Carnage cut loose before it all blows up? Can he then wade into Canada pretending to be there to save it when he sowed the seeds of the current crisis?

http://www.global-rates.com/interest-rates/libor/british-pound-sterling/gbp-libor-interest-rate-3-months.aspx

Stay tuned!

#49 Whatcha Minnie on 04.19.18 at 6:43 pm

In 3 years, i will still be learning, hopefully with more knowledge and responsibility. Wherever I end up, I would like to be in a position to grow professionally and contribute to the business. And that position must be stimulating that I love to go to work everyday

#50 Ian on 04.19.18 at 6:45 pm

I didn’t think the BoC would raise this week and I doubt they do May either. I think both countries are done with the raises.

That is no reason to be bullish on housing however. It will suffer for a long time. Supply is way ahead of demand and this first year of the GTA housing bear is just a taste of what is to come. Garth has cited all the reasons why. That % of mortgage renewals this year is just terrifying.

#51 Jay on 04.19.18 at 6:45 pm

Why do you think listings are exploding.
The low hanging fruit is gone.
Smart people are bailing that’s why so many listings just wait couple more months. Most lawns this summer will be filled with election signs and for sale signs.

#52 Stan Brooks on 04.19.18 at 6:45 pm

#43 Nonplused on 04.19.18 at 6:35 pm

Absolutely.

The great credit orgy is a Ponzy scheme orchestrated by professional con men for the benefit of the banks/the real owners of this place and the government taxing schemes,

Pretty accurate on small business assault and theft.

Only an idiot will invest in this place. Period.

#53 -=jwk=- on 04.19.18 at 6:47 pm

Imagine if Mattamy Homes had said they wanted out of the deal because costs had risen so much, I’ll bet the same buyers would say tough, we have a contract.

Except Mattamy CAN cancel the contract, for any reason, at any time and their only obligation is to refund the downpayment. The contracts are *massively* in favor of the builders. They can change floorplans, options, materials, delay construction almost indefinetly and you have no recourse. None.

Your mortgage, if you have one, is massively in favour of the banks – they can do no wrong but if you screw up just once… in the USA crash which I was (un)lucky enough to live through there were banks who admitted they had delayed processing payments and got away with it, seizing the home, because the mortgage says payment had to be ‘processed by the bank by the due date’ without saying how long that should take.

#54 Linda on 04.19.18 at 6:49 pm

The HELOC thing is truly scary, because the surface appearance doesn’t tell the whole story. How many neighborhoods are there where people’s public lifestyles do not reflect their financial reality?

The issue I have with others making poor financial choices is that we all pay for them. A neighborhood full of repossessed/vacant homes affects everyone’s property values. If people are declaring bankruptcy, it is very likely that more than the banks are losing out on expected income. Family, friends, social services – in the end we all lose (or pay) for those poor financial choices.

#55 jess on 04.19.18 at 6:51 pm

Apr 16, 2004 – flyboarding also fly-boarding. noun [uncountable] British. the activity of putting ‘For Sale’ or ‘Sold’ signs outside properties which are not for sale, as a way of generating publicity for an estate agent …

#56 For those about to flop... on 04.19.18 at 6:52 pm

Pink Pollen falling in Delta.

You guys in Ontario can still use Pink Snow!

These guys are swimming against the current trying to get their money back on this April 2016 purchase.

Only took one percent off ,as they are pretty much down to break even after expenses after splashing out 894k.

Latest assessment comes in at 925 ,and if it goes for that then it will be Pink Snow.

Could make it out alright,but if places like this start taking decent size losses than the big hurt is on.

Hopefully they have their floaties on…

M43BC

P.s…..Dunno if Canadians know what floaties are…
https://en.m.wikipedia.org/wiki/Inflatable_armbands

4552 47a St,Delta

Oct 16:$968,888
Apr 18: $959,900
Change: – 8988.00 -1%

https://www.zolo.ca/delta-real-estate/4552-47a-street

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#57 Canada's Economy Tanking? on 04.19.18 at 6:53 pm

I don’t think so.

Canada has a bright future with new factory ties.

Have you seen the chemical factory numbers coming out of Macau?

About 10 trillion dollars on route to Vancouver right now looking for a home to buy.

Typically governments play a role in regulating this stuff as national security.

But hey, we are a one trick money laundering pony now.

Meet Christy Clark or uh,uh,uh,uh,uh,uh,uh Justin Trudeau and love them long time.

Bill Monreau the money man will tie up the loose ends.

Then, let’s get Doug Ford in and make Toronto great again so we can balance this lopsided wealth out across Canada again.

Weeee!

#58 Tactless on 04.19.18 at 6:55 pm

#19

If it were normal everyday buyers then yes. These were realtors hoping to flip while having asymetric information. Information by the way that the public still doesn’t have access to. I don’t pity them.

#59 concerned1 on 04.19.18 at 6:55 pm

Sorry, but no respect for Derek ruining that man financially–basically for his whole life. I hope he enjoys his extra lottery gains seeing someone else’s life ruined and him squeezing out more money from his house than he ever should have dreamed.

Honestly, makes me sick to my stomach.

#60 The Great Gazoo on 04.19.18 at 6:57 pm

Canada 5 year bond yield been trending up and closed over 2.15% today:

https://www.marketwatch.com/investing/bond/tmbmkca-05y?countrycode=bx

Yet ZPR, rate reset preferred share ETF that should rise on increasing rates is heading down.

https://www.stockwatch.com/Quote/Detail.aspx?symbol=ZPR&region=C

Does anyone understand what is going on?

#61 Looney Baloney on 04.19.18 at 6:59 pm

Not to worry. We already know ~50% of mortgages are up for renewal this year. Poloz will delay hiking rates until everyone has had a chance to renew and lock in at the still historically low rates. The loonie will take an initial dive, but we’ll be hiking a lot more aggressively early next year to catch up. And then the majority of the indebted will have ~5 years to weather the coming storm.

If you have to go variable to afford your mortgage, now is the time to get out while you still can. And only one more rate hike this year, towards the end of the year. You heard it here first, folks!

Oh and no matter what the outcome, Derek will still come across as someone who enjoys stealing candy from a baby.

#62 Kimchi on 04.19.18 at 6:59 pm

#19 Edward on 04.19.18 at 6:00 pm
If you read the Star piece carefully, you’ll see that Derek’s buyers could not close the deal. Their approved financing was insufficient. So yeah, they were just plain stupid to make an unconditional offer on a place they could not afford. Nevertheless, if “Derek” had an ounce of humanity, he would have given them a pass.
//////////////////////////////////

What are you talking about, insufficient financing? The wife is a mortgage broker. What insufficient financing? Derek did the right thing! Fuget Abut It.

#63 Insurance on 04.19.18 at 7:00 pm

Hi Garth, so a person should keep 100k per account like you have been mentoring us. But say I had 2 million invested with Raymond James is that all insured 100%?
Thanks
Carol & Rick

CIPF covers individuals for $1 million each, in most cases, or more depending on the nature of their accounts. All major brokerages offer this coverage on cash deposits. – Garth

#64 Poloz apology to Garth on 04.19.18 at 7:02 pm

Sorry Garth for making you look bad and keeping interest rates as is.

Yeah I know economic logic says we should be raising and be around 5.5% overnight rate, but I have to confess:

we are going to let Canada run hotter than a pop tart fresh out of the toaster.

And then we will tell them (silly Canadians) that we didn’t see this coming ahahahahaha

#65 concerned1 on 04.19.18 at 7:05 pm

Here is what I know. Oil is going up this summer. This will be good for Alberta and the Canadian economy in general. BOC holds at 1.25% and everyone cries but they pay the bills. . .maybe BOC raise it to 2.25% in another year or three. . .by that time so much of this debt will be inflated away that it won’t matter. Meanwhile Canadians will be more in debt than they are now.

Look at what this means in the big picture. . .

Your money in the bank is becoming more and more useless as it fails to keep pace with inflation and as the world is swapmed with cheap money–this isn’t going away in your lifetime. I learned this awhile ago when I watched the value of $10K saved go from being worth something in 2003 to worth a lot less in 2013. How do you hedge against this? Buy real estate or other assets that will be indexed to inflation or go up in the long term–groceries, cars, that new deck you want in the back of your house etc.

There is no way to win this game with your money held tight in your pocket.

#66 Kimchi on 04.19.18 at 7:06 pm

#5 Khuy on 04.19.18 at 5:38 pm
Mark my words, those who don’t buy now, will regret in a few months!
::::::::::::::::::::::::::::::::::::::::::
#29 cto on 04.19.18 at 6:16 pm
i agree with Khuy!
this is just a small bump in the huge not to distant gains to been made in real estate!!!
…..Right?????
:::::::::::::::::::::::::::::::::::::::::::
No, Left Moron. You two are made for each other. “Distant Gains”, yeah, 20 years from now.

#67 crowdedelevatorfartz on 04.19.18 at 7:10 pm

Why is everyone crapping on Derek?
Last years prices dictated the offer he accepted.
Was it his fault the idiots making the offer didnt have financing locked in or their house sold?
Was he supposed to take a huge financial hit when they backed out because markets were tanking?

Sorry folks.
Cavet Emptor or Fools and their money.
Those buyers were probably hoping to flip that house in a years time for a profit.
They got greedy and they got caught with their pants down.

Derek had a legal offer and he held them to it.
If you people think he should have done the “honorable” thing and let that greedy greaterfool idiot off the hook…..

The next time you sell something like a car and the person offers you the market rate for it with a small down payment…..
And when other people show up to buy it with all the cash in hand you say , “sorry its been sold.”
And the 1st buyer backs out due to financing issues, offer to sell it to them for 7k because its the “honorable” thing to do….screw yourself out of 3k because the other person is an idiot with their financing.
Yeah, THAT makes sense.

#68 Greek_Yogurt on 04.19.18 at 7:12 pm

“Nevertheless, if “Derek” had an ounce of humanity, he would have given them a pass.”

I used have similar thoughts when I came across people acting out of self-interest at the expense of others. Now I’m a dad, stuck in the rat-race, just trying to get ahead. Life is meaningless, humanity overrated. Take what you can before its taken from you. And then you die.

#69 Joe Schmoe on 04.19.18 at 7:16 pm

#13 Guy in Calgary

I too am baffled every day by general stupidity and laziness with so much information easily available.

But awhile ago I realized the average person cannot filter through ALL the information in any efficient manner. So they only read what re-affirms their position.

#70 mitzerboyakaQueencitykidd on 04.19.18 at 7:17 pm

spring has sprung out on the northplains
selling houses has not
tulips coming up …. old man winters back is broke
yippe

#71 Ground Truther on 04.19.18 at 7:18 pm

#41 NRI13 on 04.19.18 at 6:27 pm
As much as i believe every single statistic on this website at varying points throughout the years i have read, the reality on the ground per se seems and feels different. Even with the declines, realtor brokerages (clients) are doing brisk business. Anecdotally, houses in mississauga are selling pretty much at near asking prices. Cheers

——-

Same here on South Vancouver Island. Houses using inflated 2018 assessed values are selling at or above listing price in most cases if they are quality. If they are not, then it takes weeks or months – but they still sell and near asking. But no decline in prices, which are already up 30-50% from two years ago; inventory is non-existent; and there is no palatable awareness that maybe the market ‘is supposed’ to change because of B20. Sorry, too much Vancouver money fleeing over here…

#72 Bobby on 04.19.18 at 7:20 pm

For #19 Edward,
Imagine if Derek had another higher offer and he wanted to get out of the deal, would you suggest the buyers should offer the same humanity?
It’s always amazing how someone’s perspective changes when they are on the losing end.
This will not end well.

#73 crossbordershopper on 04.19.18 at 7:20 pm

in america you can still deduct your home interest expense and points. i find it very sad canadians are now suffering lower prices on their homes, and cant write off their interest. what a looser investment homes are. Ya tax free tax free, its your retirement, forced savings etc. sure thats all correct but at a huge cost.
go to america, live better, pay less taxes and enjoy the buffet. best food i ever had, when cows eat fresh grass their meat is more tender, it tasts like grass up here some steaks ive had.

#74 Dmitry on 04.19.18 at 7:22 pm

#25 Dirty Developers on 04.19.18 at 6:06 pm
Funny how the developer can cancel your contact and give back your deposit in a rising market so that they can pre-sell your condo/house again at a high price

BUT if prices drop after you signed the contract and given a deposit, then tough SH_T.

I hope people who had there deposit returned in a rising market get together and sue these dirty developers. Only thing more filthy and scummy than realtors are developers.

——————–

For sure there will be a lawsuit against that greedy developer.
More details here – https://www.facebook.com/groups/433561243751380/

Also there’s politicians that have builders as “good partners” that maybe even worse than developers.
https://www.thestar.com/news/gta/2018/01/20/residents-question-vaughan-mayors-paid-position-on-bank-board.html
https://www.youtube.com/watch?v=MgoUGr4t_i8

Sign a petition to support buyers, not developers
https://www.change.org/p/david-dayvid-change-the-condominium-bylaws-to-support-buyers-and-not-sellers

#75 For those about to flop... on 04.19.18 at 7:24 pm

Pink Pollen falling in Burnaby.

Been following these guys for a while, and I will submit this elongated post with the evidence just to show you the slow grind down going on in Vancouver,and these guys can’t even find a buyer after being in no better position than breaking even since last May.

Originally asking 1.64 ,then 1.59 ,then 1.54 then 1.49

They just lowered it again to 1.39

Their assessment got rolled back from 1.54 to 1.45

Most important number? I guess is 1.51,that’s how much they paid and now it has turned into a show.

Here’s Johnny…

M43BC

5656 Carson Street, Burnaby paid 1.51 June 2016 ass1.45

May 25:$1,649,000
May 30: $1,599,000
Change: – 50000.00 -3%

5656 Carson Street, Burnaby

May 25:$1,649,000
Aug 18: $1,549,000
Change: – 100000.00 -6%

5656 Carson Street, Burnaby

May 25:$1,649,000
Dec 13: $1,499,000
Change: – 150000.00 -9%

https://www.zolo.ca/burnaby-real-estate/5656-carson-street

https://www.bcassessment.ca/Property/Info/QTAwMDA1WFIxSA==

$$$$$$$$$$$$$$$$$$$$$$$$$$$$

Feel free to make a donation.

Flop For Fox Fund…

http://www.terryfox.org/get-involved/ways-to-give/

#76 crowdedelevatorfartz on 04.19.18 at 7:26 pm

@#68 Greek Tragedy
“Now I’m a dad, stuck in the rat-race, just trying to get ahead. Life is meaningless, humanity overrated. Take what you can before its taken from you. And then you die.”
++++++

Very inspiring.
Depressingly uplifting
Valium bekons

haiku over

#77 santokie on 04.19.18 at 7:26 pm

#41 NRI13 on 04.19.18 at 6:27 pm
As much as i believe every single statistic on this website at varying points throughout the years i have read, the reality on the ground per se seems and feels different. Even with the declines, realtor brokerages (clients) are doing brisk business. Anecdotally, houses in mississauga are selling pretty much at near asking prices. Cheers
—————————————————————
^^ That’s a lie. Houses in Mississauga aren’t moving. In my street alone there are 2 house back on the market after they were sold 8 months ago. Asking price lower than previous sold price. can you say “Pink Pollen?” LOL

#78 ‘It’s a crisis’: B.C. attorney general responds to report linking drugs, money laundering, real estate on 04.19.18 at 7:27 pm

‘It’s a crisis’: B.C. attorney general responds to report linking drugs, money laundering, real estate

David Eby said as much on CKNW’s The Jon McComb Show Thursday morning, in response to a Global News investigation that detailed shocking links between Chinese gangs, street drugs like fentanyl, B.C. casinos and the province’s high-priced real estate market.

https://globalnews.ca/news/4155822/vancouver-model-david-eby-money-laundering/

#79 jess on 04.19.18 at 7:30 pm

automated underwriting

https://mfi-miami.com/2018/04/quicken-loans-fraud-2/

=========

Gilbert: Feds on ‘witch hunt’ against Quicken Loans
Joel Kurth and Christine MacDonald Published 11:30 p.m. ET April 24, 2015

https://www.detroitnews.com/story/business/2015/04/24/gilbert-feds-witch-hunt-quicken-loans/26346861/

Dan Gilbert vows he will never settle Department of Justice mortgage lawsuit
John Gallagher, Detroit Free Press Published 6:00 a.m. ET Jan. 18, 2018 | Updated 12:06 p.m. ET Jan. 19, 2018

The government has alleged that Quicken had a culture of bending the rules and gave “speed bonuses” to underwriters. The mortgage company failed to disclose the problems with the FHA-insured loans that cost the federal government millions of dollars when they went bad, federal lawyers contend.

The case is expected to go to trial in spring of 2019.

#80 Hopefully Derek goes broke on 04.19.18 at 7:32 pm

Nobody cares about a guy squeezing someone for a million dollar windfall. Karma has your greedy address.

#81 SoggyShorts on 04.19.18 at 7:41 pm

#19 Edward on 04.19.18 at 6:00 pm
Nevertheless, if “Derek” had an ounce of humanity, he would have given them a pass.
*******************
Yeah sure:
” I feel bad for your screwup, so let me eat this 500K loss.”

If you bought some fruit with a bad cheque, and after it bounced, the fruit was getting old and could only be re-sold for less. Should the grocery store soak that loss, or should you for being a bum who writes cheques that can’t be cashed?

#82 RentYVR on 04.19.18 at 7:49 pm

I got quite a few responses to my post yesterday re: the BoC doing the right thing and holding rates. Couldn’t reply to all so here it goes:

1) Canadian are not drowning in debt! Our assets (yes including and especially housing) have increased in value considerably so most Canadians are on a net basis in better financial shape than most of the world.

2) Sorry, but the inflation rate is not a fake number. Core inflation is low and has been for quite some time. Just ask all the gold bugs on here who have been getting slaughtered over the past 5 years

#83 For those about to flop... on 04.19.18 at 7:49 pm

Pink Pollen falling in Vancouver.

This one is a little bit more serious than the other two I posted tonight.

I guess the guys at Carson could be hurt percentage wise but look at the dollar amounts involved in a lot of my Westside cases.

These guys just took 470k off this Westside house and put it up all shiny and new for the unsuspecting masses.

Picked up for 4.05 in January 2016 with a strong assessment as I have shown multiple times that counts for less and less as the months tick by.

As you can see by the evidence below they were chasing close to 5 million at the start of this saga back in June.

Now asking 3.98

I’m not sure if they’re gonna be all Whyte…

M43BC

2006 Whyte Ave,Vancouver. Paid 4.05 January 2016 ass4.31 2017

2017-06-19 : $4,978,000
2017-09-07 : $4,870,000
2017-10-16 : $4,458,000
2018-01-02 : $4,456,000

https://www.zolo.ca/vancouver-real-estate/2006-whyte-avenue

https://www.bcassessment.ca/Property/Info/QTAwMDAwMDU1Qw==

#84 Ace Goodheart on 04.19.18 at 7:50 pm

If you can’t afford a 1.5 million dollar new build semi in Toronto, you could always buy this in Nova Scotia:

https://www.point2homes.com/CA/Home-For-Sale/NS/Digby-County/2660-Second-Division-Road/50923429.html

For the bargain price of $139,000.00 CDN. Less than the downpayment on a Toronto one bedroom condo.

However, there are actually still some neighbourhoods in Toronto where you can get something that resembles a deal on a house (in Toronto numbers, obviously, anywhere else in Canada, these prices would be considered lunacy).

Mount Dennis/Upper Rockcliffe: Commute much? Purchase here, and in 3 years’ time you will be walking distance to a brand new UPX stop, that will have you downtown in about 7 minutes with one intervening stop, for the princely sum of five dollars and fifty cents on your Presto Card.

Oh and they’re also building a subway/LRT thingy that connects to both the University and Yonge lines. Also walking distance from your house.

We picked up two houses in this neighbourhood back in 2012. First one cost $279,000 and second was $329,000. They are now going for quite a bit more than that. But still affordable:

https://www.realtor.ca/Residential/Single-Family/19210116/170-LAMBTON-AVE-Toronto-Ontario-M6N2S9-Rockcliffe-Smythe

https://www.realtor.ca/Residential/Single-Family/19221596/22-HOMER-AVE-Toronto-Ontario-M6N2N3-Rockcliffe-Smythe

As they continue to move “The Junction” northwards, so that it now encompasses most of lower Rockcliffe, the entire meat packing district, the St. Clair/Weston/Black Creek triangle, and now it is encroaching on the southern half of Mount Dennis even, we are slowly becoming “trendy”.

Pretty soon the vomit on our streets will smell more like expensive booze than the cheap stuff, the crack will be replaced with pricey heroin, and everyone’s garbage will be in those fancy Home Depot bags instead of used Walmart shopping baskets.

We have made it!

#85 PGer on 04.19.18 at 7:56 pm

What we’re seeing is Canadians’ standard of living coming down to reality. Many Canadians are hugely indebted personally, and still they vote in lefty governments who spend like crazy with little to show for the economy. Increasing taxes, inflation, and eventual interest rate hikes will be the final nails in the Canuck coffin, and will send us into recession (which could last for awhile).

Unless we somehow become much more productive as a country, we just don’t deserve the high standards of living we’ve been trying to live. No, growing pot isn’t going to get us there. And voting in left-wing, socialist governments who promise excessive spending with only more debt to finance it is no answer.

It’s time for Canadians to grow up a bit and face reality.

#86 Camille on 04.19.18 at 8:00 pm

Hello. I’m learning something today. My web broker account has some insurance? That’s good, will look into that. In the old days, Dad collected on CDIC insurance, when some entities failed. Have signed on to the idea that if I lose it, things will be so bad it won’t matter? On housing, people paid way too much, they wanted it so they bought it. Now its all unfair. Also my bank reduced my HELOC in the last crisis, even though I had nothing on it.

#87 Dirty Developers on 04.19.18 at 8:03 pm

Wow, so many hypocrites with the courage to criticize Derek. Hypocrites are just two classes above pedophiles in my book.

#88 Reality is stark on 04.19.18 at 8:04 pm

Now we get to find out just how strong those SJW marriages are. They will fold like an accordion.
They’ll be long gone before the bank comes for your house. In the early 90’s they stuck around for the eviction notice just in case you became Superman.
Their new superhero now is the taxman.
Get ready to pay some serious taxes.

#89 Lost...but not leased on 04.19.18 at 8:07 pm

#53 jwk

I agree…..the issue is one sided…WHY should a developer be able to change the terms of the contract…let alone cancel it outright ?

Seems like any other contract( other than RE) in the real world would have the courts on side of the buyer/customer/purchaser.

The implication is Gov’t inherently sides with the Banks and Developers..and to hell with everyone else.

#90 Ian on 04.19.18 at 8:13 pm

“Poloz said the bank was surprised by how much the economy slowed down in the first three months of this year after a booming 2017, but according to a Bank of Canada analysis that will be temporary.”

It won’t be temporary.

1) US GDP for Q1 is either 2% or lower
2) The stock market is all over the map since the last day of January

http://www.cbc.ca/news/business/bank-canada-interest-inflation-1.4624700

#91 Asterix1 on 04.19.18 at 8:15 pm

#68 Greek_Yogurt on 04.19.18 at 7:12 pm
“Life is meaningless, humanity overrated. Take what you can before its taken from you. And then you die.
—————————————————————

Ouch! On that note… heading to Canadian Tire to buy a long rope and a chair, maybe some rat poison to be sure!

A recession is going to happen. Can’t stop it anymore. We are way too deep in this hole.

#92 Lost...but not leased on 04.19.18 at 8:17 pm

Civil VERSUS Criminal

Say you are selling a car.

—A party comes and you agree to a price.

—Purchaser gives you a cheque for the full amount.

—Cheque bounces..OUCH !

NOW WHAT ?

(2) choices? one of which is far more pragmatic.

Legally, the purchaser has committed a criminal offence..aka “Fraud” by not having funds to cover the debt.

DO NOT say…”Okay …cut me another cheque”…..because then you have waived your rights to pursue criminal charges(bigger hammer)..it then becomes a civil matter..good luck.

Simply inform them of your OPTIONS and see how they respond.

#93 ANON on 04.19.18 at 8:18 pm

a ton of money to rip out of family budgets and send to the lenders

Learning a new thing everyday. Yesterday I heard the term “bank deposit”, had to look it up, seems to be some archaic long forgotten expression. Now for “a ton of money”, I think have to go to the library.
Library card? Check. Keys? Check. BRB.

#94 ShawnG in TO on 04.19.18 at 8:19 pm

i don’t think anyone has mentioned this, new from yesterday. OSFI is looking to let banks issue more covered bonds, which could help with cheaper mortgages.

(thanks to @416_Perp)

http://www.osfi-bsif.gc.ca/Eng/osfi-bsif/med/sp-ds/Pages/jr20180418.aspx

#95 Grey Dog on 04.19.18 at 8:22 pm

I’m interested in Derek’s next chapter…You sold when the going was good…
Today are you currently renting?
If so…will you ever buy again?
Hope you’re having a great time meeting the dreams on your bucket list!

Are you the same Derrick that occasionally shares the sheet explaining Garth’s codes?

Thanks,

#96 Edward on 04.19.18 at 8:27 pm

#62 Kimchi:
What are you talking about, insufficient financing? The wife is a mortgage broker. What insufficient financing? Derek did the right thing! Fuget Abut It.

It’s pretty simple really. The appraised price of their house + the amount the bank agreed to loan – outstanding debt (if any) was less than the 2.25 million they had agreed to pay. They hadn’t sold their own house at the time of the offer (another mistake). No doubt they had assumed it would sell quickly and for an inflated price. When that didn’t happen, they couldn’t even come up with enough cash for the second half of their deposit.

Quite the hole they dug for themselves. Unfortunately for them, the only way out was through the contemptible and miserly Derek. And he’d be damned if he let them walk away without extracting his pound of flesh. So now they, and their four children, face financial ruin. All so Derek can sail off into the sunset with an extra half a million in unearned and undeserved winnings. It’s disgusting.

#97 Casual observer on 04.19.18 at 8:28 pm

Complaints about Derek are unfair in my opinion and I’m reminded of lyrics by the Northern Pikes that while I don’t think represent Derek’s situation but do represent what some seem to accuse him of.

A best recollection quote from the northern pikes below:

Things I do for money
I’ll never understand
I used to be quite practical
but now I find I’m tactical
I scrape and scheme to get ahead
And don’t think of anyone but me
——————————

It seems it’s kind of a dog eat dog world for some out there these days.

Best advice is – don’t get caught wearing milkbone underwear.

#98 What can I say on 04.19.18 at 8:34 pm

All of these examples given of massive borrowing and debt are exactly the reasons why rates will not go up significantly. In fact, they will probably (almost definitely) soon be coming down again. There are too many people that simply cannot withstand higher rates. And so rates must come down to keep the party going.

If rates fall it will be because we’re in a recession. Then the troubles will truly begin. Careful what you wish for. – Garth

#99 tccontrarian on 04.19.18 at 8:36 pm

#46 Stan Brooks on 04.19.18 at 6:41 pm
—–
#19 Edward on 04.19.18 at 6:00 pm
If you read the Star piece carefully, you’ll see that Derek’s buyers could not close the deal. Their approved financing was insufficient. So yeah, they were just plain stupid to make an unconditional offer on a place they could not afford. Nevertheless, if “Derek” had an ounce of humanity, he would have given them a pass.

===========================

Humanity? In Canada?

Sigh.

*******************************************

Well, when the media talks about ‘Canadians’ in general, we are most often referred to as ‘consumers’. Over and over again we’re ‘told’ to consume – otherwise, it’s implied, we’re not contributing towards the ‘wealth of our Nation’.
How often do we hear about an act of ‘humanity’?

By those metrics, I’ve been a lousy Canadian! Now, off I go to test-drive a new car (after cashing out of a couple cannabis stocks! LOL)
Trying to improve my patriotic index score (as the one they introduced in China, recently)

TCC

#100 MSM-Free Zone on 04.19.18 at 8:36 pm

#19 Edward on 04.19.18 at 6:00 pm
“….Nevertheless, if “Derek” had an ounce of humanity, he would have given them a pass……”

#21 Stan Brooks on 04.19.18 at 6:02 pm
“…..Putting the fault solely on Derek’s house buyer is immoral……He was simply misled by professional con man….”

Sorry, not buying it. A growing family with visions of baby cribs dancing in their heads? Maybe.

But not Derek’s buyer. If memory serves, Derek’s buyer was himself a realtor (or professional con man as you put it), who probably made a killing with minimal effort over the last decade with low-ball listings and bully bids, and who probably had no intention of ever living in that house, but only to flip it.

Then finally, lady luck ran out and said realtor’s last poker hand folded like a cheap suit. Sorry, the days of easy money after Peak House are gone and said realtor should have known better, but got greedy one too many times.

I feel no empathy whatsoever.

#101 HouseBuster on 04.19.18 at 8:38 pm

“He looked like a broken man”

And D still made him cough up the money for his overpriced cardboard box. Real nice guy.

As long as D makes over $1 million profit on his house, what does he care? Greedy, selfish, unfeeling.

#102 zap on 04.19.18 at 8:39 pm

Quite the hole they dug for themselves. Unfortunately for them, the only way out was through the contemptible and miserly Derek. And he’d be damned if he let them walk away without extracting his pound of flesh. So now they, and their four children, face financial ruin. All so Derek can sail off into the sunset with an extra half a million in unearned and undeserved winnings. It’s disgusting.
—————————————————————–

Derek was greedy. Was vendor take-back mortgage even offered or considered to the purchaser for the shortfall in financing?

#103 Chimingin on 04.19.18 at 8:42 pm

I do not understand or agree with anyone on this site who thinks Derek did anything wrong. The buyers freely entered into an agreement and escalated the price on themselves by entering into a bidding war. That they did not have the cash to purchase the house but got themselves into a situation where they had to only proves that they are the greedy ones. Derek merely held them to account. Good on him.

For all of you who cried foul and wished Derek ill for enforcing a legally binding contract, well, that only shows how stupid you are. No wonder Canada is in trouble. It’s people like you who got us where we are now–broke, dumb, and Liberal.

I enjoy this blog, but still wonder why I bother reading the comments here. They are a cesspool of idiocy.

#104 Mike on 04.19.18 at 8:44 pm

#19 hopefully Derick will one day realize he’s a sinner and we’re all broken people. The Lord Jesus Christ extends forgiveness to Derick and hopefully he can accept it so he in turn can offer mercy and forgiveness to the people he sued. I can just imagine how indebted the the people Derick sued would feel to Derick and his family if Derick showed an act of incredible kindness by forgiving the debt. How much less is money compared to this https://youtu.be/f2_OOaP763k

God help us all……

#105 Leo Trollstoy on 04.19.18 at 8:48 pm

I wish I was Derek

Kudos to that guy!

#106 ShawnG in TO on 04.19.18 at 8:50 pm

of course the heloc spending has not stopped. for many, the family financial deficit is structural. all the big expenses are locked in. there are no stopping, unless it’s stopped. the big car payment, or even multiple car payments. the credit card used on last year’s vacation.

in fact, pray heloc loan growth does not drop suddenly. that will mean many are hitting their limits. from that point on everything goes on the credit card (or payday loan, same poison). 3 month count down until system break down.

#107 crowdedelevatorfartz on 04.19.18 at 8:53 pm

Well.
All the social “justice” warriors commenting on Derek’s presumed greed , avarice and gluttony have only confirmed what I have always suspected.

Financial literacy is learned in countries other than Canada

#108 Nonplused on 04.19.18 at 8:55 pm

Hmm I learned something interesting yesterday. The current tran-mountain pipeline (Kinder-Morgan) running from Edmonton does not transport any crude oil, it transports refined products like gasoline, diesel and jet fuel. In fact, that is where Vancouver gets most of it’s refined fuels. The remainder comes by barge out of Washington state, and it is in fact the Americans that are funding the protests.

So what would happen if Alberta decided to shut down the pipeline for a few weeks for “inspections”? Imagine Vancouver with fuel rationing. They don’t have the offloading capacity to source the fuel elsewhere, and if they did it would have to all come by boat which can’t be a better solution.

BC is so stupid. They can’t even see what’s coming.

#109 Clearwater on 04.19.18 at 8:57 pm

Derek is a champ.

Those fools could knew all the risks of no conditions. They gambled and lost. All the pansies commenting otherwise are bleeding heart saps. If they had not made the offer some other fool might have and dereck would have sold for close to that price.

Save your pity for people more deserving….

#110 Edward on 04.19.18 at 8:57 pm

#103 Chimingin
For all of you who cried foul and wished Derek ill for enforcing a legally binding contract, well, that only shows how stupid you are.

There’s nothing stupid about calling out the greedy, the unscrupulous, and the self-righteous for what they are. The buyers were not specers or flippers as some have alleged. They were just a couple hoping for a nice place to raise their kids. And now that dream is gone.

#111 MSM-Free Zone on 04.19.18 at 8:57 pm

Didn’t take long for the media to give a math lesson to Fraud Nation regarding Dougy’s proposed no-income-tax break for Ontario’s minimum wage earners.

Turns out Ontario minimum wage earners would have been twice better off with next year’s wage increase from $14 to $15 (which Dougy flatly said he would cancel) than a laughable $859 income tax credit.

Definitely not a fan of Wynne, but Dougy better stop misleading his Fraud Nation if he hopes to avoid adding his name to an epic-failure Conservative hat-trick.

#112 Clearwater on 04.19.18 at 9:01 pm

Good grief, mike#104, why dont you take out your righteous pen and write those fools a cheque.

#113 SoggyShorts on 04.19.18 at 9:06 pm

#87 Dirty Developers on 04.19.18 at 8:03 pm
Wow, so many hypocrites with the courage to criticize Derek. Hypocrites are just two classes above pedophiles in my book.
********************************
I need to know, what’s the class in between?

#114 Ian on 04.19.18 at 9:06 pm

#103 Chiming

It’s Canada in a nutshell.

Where other countries value success and applaud people who make good decisions, here there is just jealousy and a cesspool of pathetic communists.

Real estate is a MARKET. If you don’t have any clue what you’re doing, it’s probably best you don’t get involved or else you’ll wind up a member of the Mattamy Fairness contingent.

M48ON – UltraBlues – make good decisions people!

Get out of debt, get out of real estate, and be a saver!

#115 MSM-Free Zone on 04.19.18 at 9:09 pm

#104 Mike on 04.19.18 at 8:44 pm
“……#19 hopefully Derick will one day realize he’s a sinner and we’re all broken people. The Lord Jesus Christ extends forgiveness to Derick and hopefully he can accept it so he in turn can offer mercy and forgiveness to the people he sued….”
____________________________________

“….And Jesus entered the temple and drove out all those who were buying and selling in the temple, and overturned the tables of the money changers…”

Maybe you missed that episode, dude?

Season: MATTHEW
Episode 21:12-16

#116 SoggyShorts on 04.19.18 at 9:10 pm

#104 Mike on 04.19.18 at 8:44 pm
#19 hopefully Derick will one day realize he’s a sinner and we’re all broken people. The Lord Jesus Christ extends forgiveness to Derick
*****************************
What exactly was his sin? Getting the money he was owed? Does that mean if your boss shorts you on your paycheck, and you dispute it, that you have sinned through greed?
I shouldn’t be surprised that people with imaginary friends have trouble thinking logically, but still…come on man.

#117 FOUR FINGERS WATSON on 04.19.18 at 9:11 pm

Interest rates will stay as low as possible for as long as humanly possible, especially in 2018 with so many renewals happening this year. Perhaps a .25 hike just for appearance sake. The Ploz doesn’t care about the Loon and the exporters will love it.

#118 Wrk.dover on 04.19.18 at 9:27 pm

#44 dr talc on 04.19.18 at 6:37 pm
I hope Derek gets paid, but he doesn’t deserve it, because he’s a greedy bastard.
9k deposit on 2 mill

—————————————

Just like giving Derek $9.00 to hold a $2000.00 item.

I would have excepted a handshake, so it still counts, though the $9.00 was a screaming indication that the buyer was an innumerate flake, with no more money.

#119 MSM-Free Zone on 04.19.18 at 9:28 pm

And, no, I’m not an evangelical christian bible thumper.

Do I believe in a God? Probably. Hard not to, given all the beauty in the world.

Do I believe in religion? So a bunch of humans can go tribal with a self-imposed set of rules to screw over another tribe with an alternate set of self-imposed rules over who actually owns God? Not a chance. I doubt God would be impressed, either.

Believe in whatever you want. Just don’t screw with someone else’s head who doesn’t share your own beliefs.

I digress…this is a financial blog.

#120 Wrk.dover on 04.19.18 at 9:35 pm

#84 Ace Goodheart on 04.19.18 at 7:50 pm
If you can’t afford a 1.5 million dollar new build semi in Toronto, you could always buy this in Nova Scotia:

https://www.point2homes.com/CA/Home-For-Sale/NS/Digby-County/2660-Second-Division-Road/50923429.html

———————————-

In the district of Clare. Bonus! Acadian French culture so fed pays half the schooling. Therefore the property taxes a joke. (low, just like the crime rate)

#121 Balmuto on 04.19.18 at 9:50 pm

And if real estate values tumble in any particular location, lenders have the absolute right to demand immediate repayment of all or a portion of the borrowing to maintain LTV (loan-to-value) ratios.

That’s the nuclear option, and banks will be very reluctant to use it on HELOC borrowers that are making their payments because they know they’ll lose their business forever. Also, as a second mortgage lien HELOC lenders don’t have first dibs on the collateral so it’s not in their interest to do anything that might push their client into foreclosure. At most they may cap the line of credit and essentially turn it into a loan whereby no further credit is extended. That actually happened to a friend of mine a while back but it was on an unsecured line of credit and he’d missed a few payments. And he’s doing quite well now financially and has restored his credit but he will never do business with that bank again.

#122 Dead Cat Bounce on 04.19.18 at 9:52 pm

Derek was 100% correct !
All peoplekind need to be held accountable !!! Period ! Nothing to do with God.
Right and wrong ! Period !

#123 Protea on 04.19.18 at 9:53 pm

Khuy on 04.19.18 at 5:38 pm
Mark my words, those who don’t buy now, will regret in a few months!

Khuy anyone ever tell you that you are full of cow shit !!

#124 X on 04.19.18 at 10:00 pm

Given how rates are forecast to rise, and given the 8% rise y/o/y in HELOC’s, and what the average family owes, how many more rate increases, or how much longer until we hit a tipping point?

#125 Willy on 04.19.18 at 10:05 pm

Derek’s “win” does not sit well with me.

From what I have read it appears that he purposely went fishing for a “Greater Fool” and got far more than he bargained for.

He “won”.

Legally sound but morally and ethically-challenged.

Looks like we also need mandatory “subject to financing” regulations on all residential real estate exceeding $250K to protect folks from getting themselves in these situations.

Also wondering if a creative insurance product might come into play for potential buyers who may find themselves without financing. Financing can be revoked with changes in employment or one’s credit situation between the initial approval and the actual lending … a vulnerable time period when closings are months away …

#126 Trumpocalypse2018 on 04.19.18 at 10:09 pm

Be there:

4/20 @ 4:20

EMERGENCY PREPPERS MEETUP:

When: Tomorrow, April 20, at 4:20 p.m.

4/20 @ 4:20

(Yes, marijuana will be welcome, we all need to de-stress as we face Trump’s, and the world’s end days)

Where: Belfountain General Store (side parking lot)

Learn important survival skills for the tumultuous days ahead. Grab some ice cream too!

Be there.

PREPARE.

#127 Zapstrap on 04.19.18 at 10:15 pm

I just wish you could pick up Nova Scotia and move it out west here. Would make it a lot easier for wanna be land owners. But somehow I guess the dippers would tax that to death too …

#128 Josh on 04.19.18 at 10:15 pm

I hope Derek goes bankrupt

#129 Doug in London on 04.19.18 at 10:17 pm

Housing markets slowing down? Rubbish! Doesn’t everyone know it’s different here in Canada?

#130 randy on 04.19.18 at 10:18 pm

“Same here on South Vancouver Island. Houses using inflated 2018 assessed values are selling at or above listing price in most cases if they are quality. If they are not, then it takes weeks or months – but they still sell and near asking. But no decline in prices, which are already up 30-50% from two years ago; inventory is non-existent; and there is no palatable awareness that maybe the market ‘is supposed’ to change because of B20. Sorry, too much Vancouver money fleeing over here…

Nice try. Victoria home sales are down 40% in March from 2 years ago and inventory has been increasing for months. We have more inventory here than last year and sales are way down from 2017. Days on the market has doubled to sell. The only reason we are not seeing price drops is because so few homes are selling. The spec tax hasn’t even started yet. A storm is brewing here. Come fall and winter things are going to get ugly here fast.

#131 Vanecdotal on 04.19.18 at 10:19 pm

Re: Sam Cooper / David Eby YVR money laundering exposé

David Eby may go down as a Canadian hero in the eyes of many YVR-ers. Public Inquiry into how this was allowed (actively encouraged) under previous Municipal, BC and Federal regimes – yes please! This is Banana Republic level lack of, (and potentially criminal) governance.

Those of us who live and work here are *not surprised*, but happy to see this spotlight shaming the feds into immediate action. Including many with skin in the game. People are angry here and fed up, parallels to the 80’s cleanup of New York. As the report states the Vancouver Model can’t operate without assistance from complicit casino operators, lawers, realtors, banks, and politicians(?). The rot is deep.

#132 concerned1 on 04.19.18 at 10:20 pm

Quite the hole they dug for themselves. Unfortunately for them, the only way out was through the contemptible and miserly Derek. And he’d be damned if he let them walk away without extracting his pound of flesh. So now they, and their four children, face financial ruin. All so Derek can sail off into the sunset with an extra half a million in unearned and undeserved winnings. It’s disgusting.
___________________________________________________

I agree 100%

Let me say this. I am as greedy as the next bastard. I like money too. But if I put myself in Derek’s position I can honestly say I do not think I would have behaved as he did. I would have said to hell with the lawyer fees and the trouble of fighting it out re-list and sell for what I can get. In the end it would have been more than he paid and probably more than he deserved.

My father was a very simple man, but he used to always say “live and let live”. It does not profit oneself to bring another man and his family to ruin. If it was 20-100K I could see it, but nearly 500K is a lifetime of saving. I bet greedy Derek has awesome plans for this money.

Congrats Derek. You effectively crippled a man and his children. Hope you can sleep at night with that extra money you stuffed under your mattress.

#133 WTFpeople on 04.19.18 at 10:24 pm

I can’t believe so many people think Derek should forfeit the cash and let the buyers off the hook. These people took a gamble on their offer (even worse was that they weren’t gambling with their own money) and lost…tough.
Doesn’t anyone take responsibility for their actions anymore?

#134 Jason on 04.19.18 at 10:27 pm

#110 Edward on 04.19.18 at 8:57 pm
The buyers were not specers or flippers as some have alleged. They were just a couple hoping for a nice place to raise their kids. And now that dream is gone.

O rly? So why didn’t they close on their dream?

#135 Derek is the lowest form of life on 04.19.18 at 10:28 pm

Garth, I am surprised you gave Derek a pass on his behaviour. Business is business, but we are humans who are in this together. His buyer made a mistake, he was not the greedy bastard that people here have made him out to be. He was a man who maybe got caught up in the excitement of trying to get a home.

Derek, if you are listening. Your behaviour is bullshit. Drop the spoiled little kid attitude and figure out how much of that money you should really be entitled to–then cut the poor buyer a cheque and right a wrong. People get cancer and families split up over less than the misery you are causing this poor guy.

What’s wrong with people these days.

#136 Vanecdotal on 04.19.18 at 10:31 pm

I would add, once the next Peter German report, on money laundering in YVR RE is completed and made public (months from now? TBD), we may see a material effect on the lower mainland housing market. Plan accordingly.

#137 Nick on 04.19.18 at 10:34 pm

London must be immune. There are still bidding wars and irrational behavior. Most homes sell within a week. One renoed home in an area of $400k houses was listed for $649 and sold for $739 within two days.

#138 Fake News Again on 04.19.18 at 10:40 pm

RentYVR on 04.19.18 at 7:49 pm
I got quite a few responses to my post yesterday re: the BoC doing the right thing and holding rates. Couldn’t reply to all so here it goes:

1) Canadian are not drowning in debt! Our assets (yes including and especially housing) have increased in value considerably so most Canadians are on a net basis in better financial shape than most of the world.

2) Sorry, but the inflation rate is not a fake number. Core inflation is low and has been for quite some time. Just ask all the gold bugs on here who have been getting slaughtered over the past 5 years

——–

You must have lived in YVR your entire life because

1. The BOC does not control rates…..the market does…and when the bond market crashes….Katie bar the door.

2. Core inflation is a JOKE and has been for years. You don’t EAT laptops or fill your gas tank with flat screen TVs. Go look up what core inflation is and tell us if that is how you run your life from day to day.

#139 cramar on 04.19.18 at 10:43 pm

Watched again this evening the movie, “The Big Short.” Subprime variable-rate mortgages were the ticking time bomb. End result, six million Americans lost their homes.

With so many Canadian V-R mortgages up for refinancing this year, and falling house values, there has got to be a reckoning. Won’t be anything like the near economic collapse in the U.S., but going to be a big deal here nevertheless with RE being a big part of GDP.

Going to be very interesting.

#140 yvrmc on 04.19.18 at 10:50 pm

It’s always been buyer beware in the market place . So many people have walked away from deals they themselves willingly made , without consequence . Derek , good on you for holding them to their deal.

#141 Reynolds531 on 04.19.18 at 10:52 pm

#137 nick

London is not immune. We are in a goddamn bubble. Trailing gta and kw by ten years.

Prices never went up so don’t have as far to fall. Poor job market, lowest labour participation in Canada.

#142 Barb on 04.19.18 at 10:54 pm

I am absolutely shocked at the depths to which people go with no ability (or knowledge) of how to pay for it.
Husband and I are in our late 60’s. We don’t owe a bean to anybody…not even a credit card.
Thank God we raised our daughter to know what’s attainable and what isn’t.
I find it hard to believe that Canadians are so thick-skulled and moronic on finances.

#143 waiting on the westcoast on 04.19.18 at 10:56 pm

Wow… Duck and roll Derek…

I think Derek had every right to pursue the funding gap and should feel no guilt over getting what was promised to him. Also, to those advising a vendor take back, remember, he is then carrying the risk for that loan after the banks security interest… not a good idea.

If i were in his shoes, I would have probably negotiated a deal to avoid the hassle and cost of the legal tussle but that would not be out of sympathy for the buyers… just want to make sure that I don’t carry too much stress.

#144 Bossman on 04.19.18 at 10:56 pm

There are people wheeling around in fu-kin wheelchairs who will never ever get a taste of a piece of a-s in their miserable, constrained, claustrophobic lives and some of these bone heads on this blog are calling out the curses for a guy who held an overly ambitious couple to a contract. Give me a fu-kin break. My heart goes out to the poor a-hole in the wheelchair who did nothing wrong but get born under a hard star. That couple learned a hard MOFOing lesson but they will be fine.

#145 Millmech on 04.19.18 at 11:00 pm

#132
Hey why don’t you help out Derek’s buyers and take that million plus house off their hands,even better bid it up another 20% out of the kindness of your heart.Any of the other Derek haters want to step up and stop a poor uniformed couple worth a million dollars in real estate from going broke,their house is still up for grabs.
I bet if Derek’s buyers had an offer that fell through on their house you would be telling Dereks buyers to forgive them also?

#146 Robert on 04.19.18 at 11:00 pm

I’ve started investing with the Orange people. Small right now, but I figure it’s better to start than wait around. I currently have it set up as a weekly deposit into a TFSA EFT. Would it be better to keep it weekly, or do larger lump-sums at longer intervals, such as monthly or bi-yearly?

#147 Vince on 04.19.18 at 11:01 pm

No remorse for the dude who lost the $470k. These are the same people who bid up the prices of homes to the point where the average family can’t afford a home. Probably made his money flipping houses. Easy come, easy go.

#148 Doug in London on 04.19.18 at 11:02 pm

Derek has done absolutely NOTHING WRONG WHATSOEVER! It’s my understanding that the buyer signed the offer to purchase at a MUTUALLY AGREED price and the contract is legally binding. If they don’t like it they shouldn’t have signed the offer in the first place.

I’ve bought and sold many stocks, ETFs and mutual funds over the years. Some have been winners and some have been losers. For example, late last year and earlier this year I bought more GE stock at what I thought was a good price. It has gone down more since so what do I do, go to my brokerage firm, find out who actually sold me the stock and blame them for ripping me off? Instead I’ll do something that many commenters here won’t do, and that is man up and accept that I made a dumb mistake and have no one other than ME, MYSELF, and I to blame for it. What is so hard to understand about actually, dare I say it, being responsible for your own actions? Is that too much to ask?

#149 the Jaguar on 04.19.18 at 11:03 pm

“””So yeah, they were just plain stupid to make an unconditional offer on a place they could not afford. Nevertheless, if “Derek” had an ounce of humanity, he would have given them a pass.”””

This troubling statement demonstrates the truth and pit of snakes that define the times we live in and what lies ahead. People who think business, investment or profit have something to do with ‘humanity’ surely were driven two blocks away from the family home by their ‘mommy’ for their ‘ play dates’. Were never allowed to fail, think for themselves or learn from their mistakes, and think the world owes them a living, an apology, and a little ‘humanity’ when they make rash, impulsive and uninformed decisions. Decisions driven by a sense of entitlement and lack of maturity. It’s called consequences of actions. Responsibility. Accountability. Even that old chestnut ‘You made your bed, now lie in it’.
There are people who deserve sympathy and perhaps intervention in some way or other, but in no way does this case qualify for that ‘humanity’.
Or, as Michael Corleone once said ” It’s not personal, Sonny. It’s strictly business”.

#150 Nick on 04.19.18 at 11:05 pm

Are you people that are berating Derek for real? Who is the greater fool here? Is there no accountability, responsibility, or sense of obligation anymore?? Grown adults agreed to a purchase knowing the situation. They KNEW the risks, anyone arguing they didn’t is a misguided moron. Weren’t they mortgage brokers? These were not disadvantaged people. I recently sold a house (yet to close) and it was an extremely stressful experience that I wish not to repeat for a long time. You better bet that if they buyer walks I’m going after them full steam.

How high and mighty are you to presume Derek’s situation, and to cast judgment without all the facts? Get off your bloody high horses! I completely agree with the poster that stated this mentality is what is causing the degradation in this country, with these attitudes of attitude of zero responsibility and accountability. And some even wishing him to go bankrupt! Disgusting hipocracy!

Perhaps Derek already had commitments for the money that he had a firm contract on? Perhaps he could have had another (similar, closable) offer? Perhaps he tried many times to reach a reasonable settlement with the buyers (I’m CERTAIN of it actually). But they thought that they could play the system and win. They lost and I’m happy to see accountability take its course. Do I want ruin for the family? Of course not! But what would everyone say if I’d take out my life savings, go to a Casino and put it all on red and it comes up black? Should the Casino just take mercy on me and let me have my money back (perhaps so I could “try again”??)

To call him greedy or to suggest what he does or doesn’t deserve is completely sanctimonious. Give your heads a shake!!!!

#151 Duke on 04.19.18 at 11:08 pm

#5 Khuy on 04.19.18 at 5:38 pm
Mark my words, those who don’t buy now, will regret in a few months!

===============

Are you serious? Those who don’t buy now will laugh at you in few months. LOL

#152 Duke on 04.19.18 at 11:12 pm

#7 slam on 04.19.18 at 5:47 pm
Colleague just received a letter from one of the big 5 about his HELOC. This bank will increase his current rate of prime + 0% to prime +0.5%.

I thought he would be able to keep his prime + 0% but was surprised the +0% could change any time.

==================

HELOC is something bank has full control of, so they can do whatever they want any time with just a notice. You can say NO to it only if you can pay back the entire balance.

#153 Waiverless on 04.19.18 at 11:12 pm

#135 Derek is the lowest form of life

If those buyers didn’t put in there bully bid someone else might put something close to it. That option was gone once those buyers came in. Granted it’s harsh what’s happening to them – but a mortgage broker.. or was it realtor? They should have known better and actually tried to close with a B-Lender. They were idiots and likely speculators. I get some of the angst against Derek but why should he be so kind as to lose all that potential gain cause a speculator messed up. Would they have been so kind had the positions been reversed?

#154 TheDood on 04.19.18 at 11:14 pm

For those of you dissing Derek for pursuing a deadbeat buyer to cough up what was agreed and signed upon, give your heads a shake. No sympathy for dumba$$ people who don’t know better, and there are 10s of thousands like just like them across this financially illiterate country. Dummies buying overpriced assets they cannot afford are one of the larger reasons for the RE mess that is Canada. If he’s financially ruined for life, he did it to himself. Don’t blame Derek!

#155 Blacksheep on 04.19.18 at 11:15 pm

Derek #135,

“His buyer made a mistake”
——————
Derek, ignore fool coments like this one.

The “buyer made a mistake” to the toon of $100,000’s of thousands of dollars, NOT Derek.

It’s adult time.

Buyer should have put on his big boy pants before signing legally binding contracts. Dude bought in an open market and was coerced by no one, other than maybe his realtor (still, buyers problem)

Good job D, would have done the exact same thing.

#156 Duke on 04.19.18 at 11:16 pm

#14 Bobby on 04.19.18 at 5:57 pm
This isn’t new, we’ve seen this all before. I watched it unfold in Ontario in the 90’s. As you have stated on countless occasions, it is no different here. No, real estate doesn’t always go up.
Watch this become an election issue as those losing out will want the government to step in and bail them out. Imagine if Mattamy Homes had said they wanted out of the deal because costs had risen so much, I’ll bet the same buyers would say tough, we have a contract.
We’ve always known that the majority of Canadians are financially illiterate, now we’ll see just how badly.
This will not end well.

=================

Well said.

#157 Derek's The Best! on 04.19.18 at 11:22 pm

Ah, your muther wears army boots.

Derek did the right thing and closed on the deal. Basically, he took what was his, the Muney.

SHOW ME THE MUNN-EY!!!

The buyer couple were, tried to be in this case, Opportunists – FAIL. The husband a Realturd and the wife a Mortgage Broke Her. You get it, the mortgage broke her. Anyways, They Deserved what they got! No Sympathy, No Nothing. Show Me The MUNN-EY, honey.

BTW, Jesus doesn’t care about this.

Show Me The MUNN-EY.

#158 Lost...but not leased on 04.19.18 at 11:24 pm

#108 Nonplused

Re: Kinder Morgan pipeline

A little homework would show that some of the big players at Kinder Morgan are from disgraced ENRON…

There is ZERO business case that validates the project….only the US head office will benefit. I have yet to see any article that justifies it other than puff pieces. China, a potential market, is now focussing on electricity for future energy.

Why doesn’t Alberta refine the Bitumen prior to shipping? Bitumen value is pennies ($5-8 barrel)compared to higher quality crude.

Notley is simply desperate for votes….why doesn’t she take action re the 100,000+ spent oil wells in Alberta that are supposed to be remediated.. a multi- billion dollar liability. Alberta literally gave away its resources, unlike countries like Norway that made billions on royalties.

BC has valid concerns…yet Notley wants to punish all BC citizens with higher prices and shortages ??? …careful payback can be b*tch.

#159 Lost...but not leased on 04.19.18 at 11:27 pm

Derek etc.

Regardless of whose side you take…the sad reality will be this story won’t be isolated…more like orders of magnitude of peoples lives ruined…divorces, suicides…etc. which will impact the rest of us directly or indirectly

#160 Derek's The Best! on 04.19.18 at 11:31 pm

#149 Jaguar
Or, as Michael Corleone once said ” It’s not personal, Sonny. It’s strictly business”.
////////////////////////////

Michael didn’t say that. He said, Show Me the
MUNN-EHHHH.

#161 Bobby on 04.19.18 at 11:35 pm

I’m surprised at the number of postings here who are panning Derek for pursuing what he was in fact owed. The buyer was supposedly no dummy, but a member of the so called real estate profession who made a very bad decision. Had the market continued to rise and Derek wanted out to seek an even higher price you can bet the same realtor/mortgage broker would had pursued Derek viciously in the courts to get his due.
Any idiot could see that this price lunacy wasn’t going to continue and someone was going to get caught. Isn’t this a blog about greater fools?
Rather than being accountable for their own poor decisions, Canadians like to blame someone else and then demand the government bail them out.
No wonder we get governments like the clowns we have now in Canada. Look who is voting them in.

#162 Questions on 04.20.18 at 12:03 am

Anectodally, the gta malls and retail areas seem as full as ever. Anyone noticing much difference there?

#163 Nonplused on 04.20.18 at 12:12 am

#122 Dead Cat Bounce

If we absolutely can’t get our head around the idea that “mankind” is and always was gender and age inclusive, referring to all people not just men but women also, could we at least use “humankind”, which is a lot closer to being a word. “Peoplekind” is something only someone who does not have a solid grasp of the language could come up with.

#164 Clearwater on 04.20.18 at 12:12 am

@158 clearly lost

BC has valid concers…true…but managable.
KM has some ex Enron people associated with it..also true…who cares.

Every other thing you said is untrue or a mishmash of nonsense.

You are a fool but at least you are not alone.

#165 Smoking Man on 04.20.18 at 12:14 am

Perfect storm for real estate catastrophe.

Carbon tax
TFW restricting wage growth.
Soaring hydro rates.
Socialist govt chasing away foreign investment.
The outflow of capital and brains from Canada.
Rising mortgage rates.
High gas prices.

It’s got to give somewhere. I’m calling for a flood of home homeowners getting out all at the same time. FOMO Will become FOLM

This year. Just watch.

#166 Smoking Man on 04.20.18 at 12:16 am

Derek killed it. Good for him.

#167 Entrepreneur on 04.20.18 at 12:28 am

The buyer wanted out, went to Derek on the second day to see if the contract could be cancelled. Sometimes the legal avenue is not right and should be a lesser consequence. Derek had time to correct the situation to be less damaging to the buyer.

In other words Derek, have a heart. Ever have the heart pound when you did a good deed? I will tell you this, it feels wonderful.

#168 Myra Andrews on 04.20.18 at 12:31 am

Greater Vancouver Stats from realtor Paul Boenisch

First time since September 2015 it is over 10,000

April 19 New 211 Sold 133 TI 10,006
April 18 New 266 Sold 128 TI 9989
April 17 New 297 Sold 120 TI 9898
April 16 New 377 Sold 191 TI 9799

April 13 New 152 Sold 137 TI 9727
April 12 New 199 Sold 112 TI 9748
April 11 New 248 Sold 101 TI 9709
April 10 no posting from Paul
April 9 New 382 Sold 117 TI 9450

April 6 no posting from Paul
April 5 New 268 Sold 164 TI 9264
April 4 New 324 Sold 154 TI 9204
April 3 New 538 Sold 131 TI 9104

Mar 26-29 New 793 Sold 455 TI 9032
Mar 19-23 New 1041 Sold 617 TI 8916
Mar 12-16 New 1147 Sold 682 TI 8743
Mar 5-9 New 1101 Sold 542 TI 8510

#169 Nonplused on 04.20.18 at 12:39 am

#158 Lost…but not leased

Wow… the anti-business force runs strong with this one.

It may be that former employees of Enron ended up at Kinder-Morgan… they ended up pretty much everywhere. I assume if they can still work at a public company they weren’t actually part of the fraud. What were they supposed to do? All Enron employees have to work for the government now? I know a few people in Calgary that worked for Enron at the time and they were not part of the fraud and moved on. If every time your boss got arrested you were no longer employable I think nobody would have a job.

The reason Alberta doesn’t refine more of it’s own bitumen than it does is because we would have to build the refineries to do so, which is expensive. In the old days that didn’t make much sense because the refineries needed already existed in Texas and Oklahoma and US oil production was falling, so it made more sense to pipe bitumen to those refineries than build brand new ones in Alberta. The same is the case with China. They want to build their own refineries because they can do it cheaper. Also, it’s a lot easier to transport crude and then refine it into all the products that to build a different boat for each product. You can’t put the diesel and the gasoline in the same hold but you can bring the crude over and then separate them.

And Alberta does upgrade some of their bitumen into “synthetic crude” but believe it or not that is not always the economic decision, sometimes the buyer want asphalts to come out the bottom because somebody is building a road.

Why doesn’t Nutley take action on the +100,000 dead oil wells? Well I am not sure there are that many in just Alberta but there are a lot. But the reason is simple, the money isn’t there to reclaim them and it never will be. It’s the same reason why farmers don’t pull down their abandoned barns long after it’s safe to put cows in them, or why there are so many abandoned warehouses falling in on themselves when you take the train from New York to Princeton. There is no money in reclamation. Until you can find a better use for the property, it sits.

Norway doesn’t reclaim their wells either but they are mostly under water so nobody sees them.

And even if nobody else but Kinder Morgan benefits from the project, not the thousand of Canadians that would be employed to build it, not the pipe mills near Edmonton who would build the pipe, not the 100’s of Canadians that would have full time jobs, not any of the oil sands workers who would feed the pipe, not any of the Canadians who would get knock on jobs, not the government who would receive more royalties and more income taxes of every sort, not the natives who might get an enduring lease to have the pipe cross their land, even if none of these people and entities benefited at all, is that an excuse to deny a valid business venture?

Why don’t you move to Venezuela. I think you’d be more at home there.

I say hold them accountable for any damage they may cause and penalize them if they spill any oil. But to outright deny the expansion makes no sense. We need jobs in Canada, a lot of jobs, or the teachers just aren’t going to get their pensions when they retire and they should think about that before they brainwash our kids.

#170 Nonplused on 04.20.18 at 1:10 am

Oh and I think I’ll chime in on all the negative comments about Derek. I’ve done so before but it bears repeating.

(Remember folks, we comment. Only Garth, Doug, and Ryan “post”.)

I think the judge awarded Derek more than I would have. I would have used as a reference the original list price or the highest other valid offer as the reference, because in my opinion that would be a better measure of Derek’s actual loss. But to some extent that is splitting hairs, and the court did have to find in favor of Derek for some amount of money or the precedent might have meant that Canada no longer had contract law.

Yes, folks, it was that serious. Contracts typically have break clauses for a reason, because sometimes you do need to break a contract, but well written ones always define what the breakup fee will be. This one did not. So the judge was faced with the decision of letting the buyers off on more reasonable terms and basically throwing contract law out the window meaning no contract was ever enforceable anywhere in Canada ever again until parliament overruled the court, or taking a number from the case and using that as the reference. He/she decided on the sales price. But let’s face it the next bid was probably over ask too.

Remember kids, don’t sign on the dotted line unless you understand the terms. Make sure you understand the breakup terms and make sure you can live with them. If you think you might need to walk away, go back to the old days and include a home inspection and financing. Might not hurt to put an explicit term in there for a break-fee.

For example, the woeful buyers in this case could have included this wonderful term: “In the case the buyer is unable or unwilling to complete the transaction the buyer’s damages payable to the seller shall be limited to the deposit.” Ya, that’s actually common law when you are buying a car or a TV. So you can do it. You just have to pump the deposit up a bit and it also makes you think. You’ll have to put a $100,000 deposit down on a house like this to get the seller interested but you’ll also be much more careful not to write checks you can’t cash.

#171 Chelsea on 04.20.18 at 1:11 am

BC Real Estate has become the black market for corruption. This recent information about money laundering, corruption and drugs funneled from China has been mentioned since 2017. Why has it taken this long for the Canadian Government to act on this problem… no surprises here…. Laundering money into B.C. (underground banks, Mafia)… is probably well known and there is more to it how and who is responsible for this mess….. I don’t think B.C. will ever recover, and more locals will be heading out of B.C… scary feeling that we are ruled by hoods!

#172 Terry on 04.20.18 at 1:17 am

Wow ………….. the misery, misinformation, hate and attacks across the comments section tonight. Canada is deeply fractured, polarized, fighting, at war with it’s Provincial neighbors and slowly coming apart in every way possible. This country is consuming itself, following all the wrong leaders, making bad decisions and costly mistakes. Oh Canada ……….. I weep for thee …………

#173 L on 04.20.18 at 1:26 am

@161 Bobby

Couldn’t agree more, yah for Derek.

#174 Prairieboy43 on 04.20.18 at 1:30 am

Garth. Visiting New Zealand. Kiwi are in same predictment as Canucks. Housing prices 20x Income. Down here on South Island Dunedin, clean country. Not dirty, little dust, great beer, drivers are respectful. I think many Canucks would like it here. Japanese are foreign buyers, as the Japanese value the cleanliness and beautiful empty beaches. Learning about rugby. Once you learn the language of one sport, they are all the same. Foreigners Tax coming up the pipeline. The Taxes are crazier than Canada. Seems people are accepting of these taxes. Lost souls. Going Great White Shark Diving Tomorrow. I’m not scared, face your fears. God Bless my Asian Sister in Law. Rest In Peace Lizzie. Get living, get moving now.
PB43

#175 LEVINE on 04.20.18 at 1:54 am

Despite everything….still lost a to a bidding war on a condo in burnaby by 50k!

#176 Dolce Vita on 04.20.18 at 2:04 am

“Since the start of last year, 17 projects, with 3,627 units, have been cancelled” in 416 land.

Not a lot of the total, still, if I were a prospective buyer of a condo in 416 land, the above would give me pause in purchasing a new condo especially if I were a punted buyer from 1 of those 17 projects.

Condos apparently still hot in YVR and 416. Hard to believe with all the RE headwinds out there now in the news and as Garth points out, more to come this year.

The Moisters may well outdo the Boomers in their early 80s RE bust.

Hopefully, Mommy and Daddy not be all HELOC tapped out to rescue them.

#177 Smoking Man on 04.20.18 at 2:11 am

The theam of my book. You cant beat the machine.
When Trump dumped Bannon I knew it was over.

He promotes John Bolton and now Ruddy Julliani back in the picture. 911 scum bags.

Screw Trump. Coward.

One term wonder.

#178 under the radar on 04.20.18 at 4:55 am

The person on the news put 55k down on a 655k house. Her mortgage payments are 6k a month. She blames her real estate agent. She had no sense in taking on this much debt regardless of the rate she thought she would get. she could have rented the same house for 1800 per month.

#179 Proof ? on 04.20.18 at 6:09 am

Anybody posting / reading this blog that blames “Derek” for the situation the failed / sued buyer of his house should probably visit another blog.

We come here to learn about / discuss financial matters and investing , THE BASIS OF WHICH IS CONTRACTUAL LAW in one form or another and backed by the remedies that are provided thereby.

If you do not understand / respect this basis of our capitalist system nor choose to interpret this reality, you really should not expect to succeed in maters financial.

Period !

#180 Proof ? on 04.20.18 at 6:11 am

… matters (not maters)

{ hit send too fast, sorry}

#181 Proof ? on 04.20.18 at 6:14 am

to # 161 Bobby

Excellent point.

This is why I believe that this RE downturn may be quite nasty as the recent participants have been / are completely unrealistic, and many just flat out delusional.

Reality bites !

#182 Proof ? on 04.20.18 at 6:25 am

to comment # 158

Your ignorance on the issue is breathtaking.

Try looking past your nose and do some real research about the dynamics / realities of the oil industry in Canada.

Or better yet, put down the joint, sober up and look at the drivel that is your comment.

#183 Send in the clowns on 04.20.18 at 6:33 am

The clowns who tried to defraud Derek out of a half million get no sympathy from me. Perhaps all you Derek haters should start a “go fund me “campaign and help the clowns reclaim the money they couldn’t borrow. Or perhaps petition the government to cut the clowns a cheque to help them pay for their stupidity and greed.
Also, maybe a bonus Trudeau apology.
Hopefully the clowns four children will learn from their parents financial illiteracy.
Derek is entitled to this money by law and I hope he recovers all the damages.

#184 Hamsterwheelie on 04.20.18 at 6:35 am

Sooo far down the list. Oh well, here goes. Some folks don’t qualify because they’re self employed, write everything off and end up with no income on paper. Despite selling our first and only primary residence, that substantial gain doesn’t qualify us for a mortgage. Why? because we’re building a multifamily home. Can’t assess the home until its finished to get a mortgage, who finances you to finish the 4 unit build? Riiiiight, private lenders at 11% plus broker fees, lawyer fees, insurance fees etc. Also, lenders take rental income at half, 50% folks. Yup, i know nobody cares, all landlords suck but ya’ll still want somewhere nice to rent, right? So that’s our crazy situation – and its getting harder. I have no sympathy for people who buy ridiculously priced houses to fill some void in their life, impress friends or spec on prices going up up up. Meanwhile our place will house us, have 3 beauty rental units, all built to code and only a $200 000 mortgage and we can’t get a foot in the door. Makes you resentfully thankful that brokers / private lenders exist and in a couple of years [email protected] will finally approve us after all the numbers add up like we said they would (and we’ve lost a few years of profits to stay afloat)

#185 Gravy Train on 04.20.18 at 6:46 am

#170 Nonplused on 04.20.18 at 1:10 am
“(Remember folks, we comment. Only Garth, Doug, and Ryan post.)”

Uh, no. They post blogs; we post comments.

To post means “to publish (something, such as a message) in an online forum (such as an electronic message board).” Look it up! :)

#186 Proof ? on 04.20.18 at 7:03 am

to comment # 120 Balmuto

Completely ignorant of banking dynamics are we ?

The demand for payment will be made to an economically vulnerable customer.
Count on it.

If the customer lacks the capacity to repay the debt, their bank will first offer to convert the HELOC / LOC to an amortized loan, but at a much higher rate, claiming elevated economic risk.

The customer can always try to get a co-signor to satisfy the banks credit policy.

The customer can always try another lender and borrow funds to pay out the debt. (unlikely, but possible)

They will work with the customer – to a point. If they deem that the risk of default is high, they will go for liquidating the collateral (usually a house) to address the debt.

The game is to keep the “needle in the arm” of only those customers who have the capacity to continue to pay (and pay higher rates).

Losing a customer with no assets left nor the capacity to borrow nor service the debts owed is no loss at all to them.

This is built into their models, just like with credit cards.

#187 Mark Baum on 04.20.18 at 7:22 am

Derek did the right thing. How many people were saved from making overextended offers in the future from seeing/hearing about this story?

Additionally, how would it affect the market going forward if it spread that everyone could get out of these contracts?

#188 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 04.20.18 at 7:30 am

Bruins 3, Leafs 1.

Bwaahaahaaahaaahaaahaaa !!!!

Your city, your team, SUCKKKKKKKKKKSSSSSSSSS!!!!

Toronto is not even a fourth rate world city!

No one but idiots tries to outbid others to get crappy real estate there!

Think of the all the RE newcomer fools who have gambled everything on glass wall condos that will collapse in a decade! Tears of glass shards on the way!

They are just a natural extension of the morons who support your pathetic fake hockey team…..

THAT HASN’T WON ANYTHING FOR 50 YEARS!!!!!!

TORONTO = LOSERS

#189 crowdedelevatorfartz on 04.20.18 at 8:12 am

@#168 Myra Andrews
“First time since September 2015 it is over 10,000”
++++++

Hmmm.
Methinks there is going to be a flood of listings in the next 30-60 days.
Total Inventory in the GVRD to pass 20000 by Sept 2018?
Lotsa wailing about the “injustice” of it all.

There’s gonna be a lot more “Derek’s” out there in the News over the next few months……hopefully all of the crushed “buyers” will be realtors trying for a quick flip.

And to top it all off.
Lets see if the latest revelations about drug money laundering and offshore ownership put the “Dipper Rules” into overdrive to placate voters screaming about Summer gas prices in the Lower Brainland.

A long hot summer awaits.

#190 NoName on 04.20.18 at 8:26 am

Poof.

Did I ever told you guys a story about my father and his “foreign” currency savings account with Ljubljanska Banka, and how all funds that he vas saving in deutsche marks went poof…

As for Derek case it will be interesting to see what happens when people “wake up” and realize that asimetry of information, re bord vs client.

#191 NoName on 04.20.18 at 8:28 am

Works in agents favour only.

#192 Trumpocalypse2018 on 04.20.18 at 8:40 am

Don’t miss it! TODAY ONLY!

4/20 @ 4:20

EMERGENCY PREPPERS MEETUP:

When: April 20, at 4:20 p.m.

4/20 @ 4:20

(Bring your marijuana to de-stress as we face Trump’s, and the world’s end days)

Where: Belfountain General Store (side parking lot)

Learn about survival, the longest lasting canned goods to store, how to raise and harvest your own legumes and edible creatures, plus post-acopalypse currency options.

Be there.

PREPARE

#193 Conn Smythe on 04.20.18 at 8:41 am

#188

How do you really feel about Toronto? The Raptors?

#194 Alistair McLaughlin on 04.20.18 at 8:54 am

#12 Bad Math, household debt is at a ridiculous level. Way beyond anything we’ve ever seen before. Therefore, history is a lot less informative than the fine print on your HELOC contract.

#195 Stan Brooks on 04.20.18 at 9:03 am

Things are getting nasty:

https://ca.finance.yahoo.com/news/newsalert-statistics-canada-says-cpi-123427067.html

Official inflation/CPI is 2.3 %, unofficial increase of cost of living – 7-8 + %.

And BoC has no intention on raising rates as in their ‘educated, sophisticated, professional’ opinion that/the increase of rates will raise inflation.

There you go folks, so Canadian, pretend there is no problem and lie about it.
Pretend that the solution/raising rates is the problem.

Shepple will buy anything if sold with confidence, it is that stupid.

As I said: run away from CAD and any investments here.

#196 NYCer on 04.20.18 at 9:19 am

I’m surprised so much anger towards Derek.

I read comments all the time here and I guess those who are bashing Derek I guess just hate people who are “greedy” whether they are buyers or sellers.

At the end of the day, the buyers chose to overbid, chose to not put financing, bought a house more than they can easily afford.

Derek pursued legally and won legally. No laws were broken.

If that family is ruined, they did it to themselves legally.

#197 Howard on 04.20.18 at 9:19 am

Maybe I’m a softie, but I don’t think I’d have the heart to do what “Derek” did.

At the least I’d cut the delinquent buyer a deal. Chop the settlement in half to $250K and call it a day.

No sympathy for the stupid buyers here, but Derek’s greed is a little bit galling.

#198 dharma bum on 04.20.18 at 9:22 am

“As mentioned here before, more than four in ten of those families are not paying back their home equity loans, while a quarter make interest-only payments.” – Garth
——————————————————————–

It is truly astounding to see how out of control consumer debt is in this country. It is at the point now where it can be justifiably called an addiction.

Canadians have become debt addicts, displaying all the symptoms and behaviours of drug addicts:

– Continued use in spite of the harm being caused
– Inability to discontinue use even if they want to
– Withdrawal symptoms when attempting to quit
– Sacrifices made in other areas of life to sustain the habit
– Living in denial of the problem while digging their hole deeper

When the supply shrinks and eventually gets cut off, many of these addicts will be squirming.

It’s not going to be pretty.

It will be interesting to see if our government will step in to bail out these debt addicts at the taxpayers’ expense.

#199 Alistair McLaughlin on 04.20.18 at 9:27 am

Whineppeger, actually bankruptcy does absolve you of all debts, with the exception of student loans. That includes mortgage debts. Of course, you lose the house in that situation. Don’t be confused by what ‘recourse’ means. The right of recourse does not supercede a bankruptcy discharge.

#200 Stan Brooks on 04.20.18 at 9:27 am

5 reasons why gas prices are set to go up in Canada — and fast

https://ca.finance.yahoo.com/news/5-reasons-why-gas-prices-080000482.html

Don’t worry, statistics Canada will report 1-2 % inflation, BoC will say: Let’s keep the rates low as not to raise inflation further (?!?), problem solved.

Mark’s ‘deflation’ in action.

Cheers retirees and people on fixed income. CPP will surely will be increased by 1-2 %, old age by few cents to a dollar, the problem is how will that help with cost of living – gas, drugs, rents, electricity, groceries increasing north of 8 %, maybe more.

We can’t eat or drive flat screen TVs or electronics.

#201 #3 of the Majestic 12 on 04.20.18 at 9:39 am

#184 Hamsterwheelie

Feel your pain. Wanted to buy a nice profitable little business in my hometown. Despite over three years financials showing Great cash flow, cap rate, ROI, etc. Banks would not lend….despite 1/3rd down (cash). Bank also would not take collateral on our (almost) 1 million dollar portfolio. What they would take? A HELOC on our paid for house (and we have great credit). This is why real estate is important—a hard asset which is what the bloody banks want. (Hmmmm….) Stay the course—it sounds like you will win in the end. As for us, we ended up taking some from the portfolio, a little cash and a $385k HELOC. One year later, return on our investment—22 percent. HELOC? Now down to $220k while giving us a decent income to live on. Interest on HELOC was a nice little deduction on our personal taxes. A month ago one of our banks, the one that would not finance this purchase, called to see if we would move our business banking there. Our answer could not be published here

#202 Bigrider on 04.20.18 at 9:48 am

# 104. Mike on 04.19.18 at 8:44 pm

#19 hopefully Derick will one day realize he’s a sinner and we’re all broken people. The Lord Jesus Christ extends forgiveness to Derick and hopefully he can accept it so he in turn can offer mercy and forgiveness to the people he sued. I can just imagine how indebted the the people Derick sued would feel to Derick and his family if Derick showed an act of incredible kindness by forgiving the debt. How much less is money compared to this https://youtu.be/f2_OOaP763k

God help us all……
——-

If the price of the house had risen by 470k to 2.695 million just as quickly would your buyer then be considered a ‘sinner’ by your God for closing on the deal and thereby ‘cheating’ Derek out of ‘his’ money.?

Not too much going on upstairs along with the religious gibberish is there Mike ?

#203 Bigrider on 04.20.18 at 9:56 am

#119 MSM-Free Zone on 04.19.18 at 9:28 pm

And, no, I’m not an evangelical christian bible thumper.

Do I believe in a God? Probably. Hard not to, given all the beauty in the world.

Do I believe in religion? So a bunch of humans can go tribal with a self-imposed set of rules to screw over another tribe with an alternate set of self-imposed rules over who actually owns God? Not a chance. I doubt God would be impressed, either.

Believe in whatever you want. Just don’t screw with someone else’s head who doesn’t share your own beliefs.

I digress…this is a financial blog.
——-
Its not ok to let people believe in whatever they want MSM because that what leads to everything as mundane and harmless as believing that a cracker is the body and blood of some long gone guy to suicide bombings and acid being thrown on the face of innocent girls all in the name of God.

You demand evidence in every part of your life and the way you conduct it when it comes to your daily musings. Demand it of your own logic.

By the way Garth, my nonno says its still gonna go “uppa, Uppa UPPA ” da price ofa da house

#204 Alistair McLaughlin on 04.20.18 at 10:00 am

#73, you’re “sad” that indebted fools can’t deduct their foolishness? Mortgage interest deductibility is the worst thing we could do. In case you haven’t noticed, Canadians don’t need any more perverse incentives to sink themselves further into debt.

It it’s lower taxes we want, then lower the bloody tax rates. We don’t need more special deductions for special folks.

#205 Alistair McLaughlin on 04.20.18 at 10:24 am

@ #82 RentYVR

Canadians are not drowning in debt!

Yes they are. And by every metric. Debt vs. income. Debt vs. GDP. However you want to look at it, Canadians absolutely are drowning in debt.

Our assets (yes including and especially housing) have increased in value considerably so most Canadians are on a net basis in better financial shape than most of the world.

And there’s the problem. Debt is not serviced by assets. Debt is secured by assets. It is serviced by income. Normally, for an asset’s valuation to be justified, it should produce enough income to service the debt. Obviously that is not happening in aggregate, since household debt to income ratios just keep rising (currently $1.73 in debt for every dollar in income – off the charts). Finally, those asset prices are inflated precisely because rising debt loads have been fueling the price increases. Minskey called that Ponzi borrowing.

As for inflation, well, it is not fake, but the CPI is a very incomplete measure, and it totally misses the boat on housing costs. These are things that are all easily Googleable, but I’m not going to do that for you.

#206 Penny Henny on 04.20.18 at 10:27 am

DELETED

#207 Mother of All Crashes! on 04.20.18 at 10:37 am

#5 Khuy on 04.19.18 at 5:38 pm
#29 cto on 04.19.18 at 6:16 pm

Spoken like true shysters!

CTO, now go Khuy yourself.

#208 Ian on 04.20.18 at 10:44 am

Wow Apple is just getting crushed the last two days. Kablooey! That’s a bit of a market leader…

#209 Nonno Nicola on 04.20.18 at 10:57 am

DELETED

#210 SimplyPut7 on 04.20.18 at 11:06 am

Inflation is up, bring on the higher interest rates!

http://www.cbc.ca/news/business/inflation-march-1.4628032

#211 Sardonic Lizard on 04.20.18 at 11:14 am

#5 Khuy on 04.19.18 at 5:38 pm
Mark my words, those who don’t buy now, will regret in a few months!
—————————————————-
And in a few months from now I will come back, recite your words, and call you a fool!

#212 Fish on 04.20.18 at 11:35 am

I am Sooooooo sick of waiting

#213 RyYYZ on 04.20.18 at 11:37 am

I can’t believe all the comments that are sympathetic to Derek’s (almost) buyers, and critical of him.

Who goes into a $2.25M deal without having all their ducks in a row? At least, if they aren’t rich and actually care about not bankrupting themselves? No, they signed a contract, and then tried to renege on it, because they hadn’t done their homework, neither by putting a financing clause in the offer, nor by ensuring that the price they were offering was one they were comfortable with. If you can’t handle the possible downsides of offer contracts on a deal this size, don’t enter into one. Are these people children? Mentally deficient? If so, they shouldn’t be making their own spending decisions. If they are, they should be able to live with their decisions. They’re not his friends or relatives, why should their problem become his? (he could have accepted another offer for close to the same amount at the time, maybe from a buyer who wouldn’t have reneged).

#214 Tom Jones on 04.20.18 at 11:42 am

Garth, I think this latest post has a bit of fear mongering, hence felt it was worth commenting that while these HELOCs may be on demand, the situations in which a Bank would actually demand on them are limited. No one likes fair-weather bankers.

Bankers are there to make money and control risk. Anyone with a HELOC who thinks it’s like a mortgage is fooling themselves. – Garth

#215 Steven Rowlandson on 04.20.18 at 11:47 am

Poor babies! I find it hard to sympathize with people who try to buy 1.5 million dollar homes and are at risk of losing them when going by the 3 years pay rule my maximum affordable home price so far this year is $6300. Last year I could afford a $28,000 dollar home.

People if you think you can afford to live in this country and can pander to the greed of the real estate market you are either very well paid or you are the greater fool and need to get your head examined and your priorities straightened out!

#216 Leo Trollstoy on 04.20.18 at 11:47 am

Remember the Canadian deflation myth?

https://www.thestar.com/business/2018/04/20/pump-prices-airline-tickets-help-propel-canadas-inflation-rate-to-23.html

Busted!

You’re welcome

#217 Tbone on 04.20.18 at 11:48 am

Good on you Derek ,
I hope you collect it all.

Why would anyone try to buy anything so expensive without
doing the math first.
And they were somewhat educated in the business.
They knew what they were doing .

#218 Doug in London on 04.20.18 at 11:48 am

@Stan Brooks, post #200:
On that note I’ll hold on to my XEG fund. I scooped it up in 2015 when a lot of “experts” said oil would go to $20 a barrel and stay there forever. Here we go again, back to the time tunnel in 1998 when oil was $11/barrel and some “expert” said it could go to $5/barrel.

#219 Stan Brooks on 04.20.18 at 11:50 am

#205 Alistair McLaughlin on 04.20.18 at 10:24 am

Pretty accurate statements.

Everyone getting rich through leveraged loans…. until the whole house of cards collapses.

It beats me how people can have any trust in the coupons called currencies.

Debt is a Ponzi scheme which will collapse, sooner or later.

Picking pennies in the front of a steamroller is not a risk free undertaking.

Derek’s buyer is one of the unfortunate victims of the system.

All tax payers on the hook for all these loans/guarantees are also victims of this fraud.

Anyone who believes that prices are not over-inflated at least 3-4 times in GTA/Vancouver is just plain idiot.

#220 Stan Brooks on 04.20.18 at 11:52 am

#218 Doug in London on 04.20.18 at 11:48 am
@Stan Brooks, post #200:
On that note I’ll hold on to my XEG fund. I scooped it up in 2015 when a lot of “experts” said oil would go to $20 a barrel and stay there forever. Here we go again, back to the time tunnel in 1998 when oil was $11/barrel and some “expert” said it could go to $5/barrel.

=================

I have VDE, RDS.B, BP

much higher dividend in stable currency,

#221 TheDood on 04.20.18 at 11:52 am

#158 Lost…but not leased on 04.19.18 at 11:24 pm

There is ZERO business case that validates the project…..
__________________________________________________

Really? What about 30 billion/day in lost revenue due to having only one customer who will only buy at a huge discount? Those who are opposed to a pipeline from AB to BC have been brainwashed by a well organized, well funded, media savvy, american based environmental lobby. If T2 had any balls, the tanks would’ve already rolled in to Burnaby! Sheesh.

#222 For those about to flop... on 04.20.18 at 11:53 am

#214 Tom Jones on 04.20.18 at 11:42 am
Garth, I think this latest post has a bit of fear mongering, hence felt it was worth commenting that while these HELOCs may be on demand, the situations in which a Bank would actually demand on them are limited. No one likes fair-weather bankers.

Bankers are there to make money and control risk. Anyone with a HELOC who thinks it’s like a mortgage is fooling themselves. – Garth

/////////////////

It’s not unusual…

M43BC

#223 AKS on 04.20.18 at 11:59 am

Re: The Home and Condo Builders

Option 1 *Sign a contract to buy a yet-to-be-built home or condo where the builder has every aspect slanted in their favour. They can bail out at any time in the future for any reason. All they have to do is return your deposit.

Option 2 *Don’t sign the contract

Option 3 *Sign the contract, then complain about how unfair it is when a builder cancels the contract.

#224 Ian on 04.20.18 at 12:03 pm

#210 Simply
#216 Leo

That’s the thing…I think we will have soaring inflation due to all the cheap money in the last eight years, but faltering economic growth.

#225 Lisa on 04.20.18 at 12:23 pm

Derek, if you’re reading this, you’re a jerk. You may not have done anything illegal but your greed is utterly repugnant. People like you make me sad for humanity.

#226 TnT on 04.20.18 at 12:47 pm

#225 Lisa on 04.20.18 at 12:23 pm

Troll Alert

#227 jess on 04.20.18 at 12:49 pm

Two federal regulators are fining Wells Fargo $1 billion for forcing customers into car insurance and charging mortgage borrowers unfair fees.

http://money.cnn.com/2018/04/20/news/companies/wells-fargo-regulators-auto-lending-fine/index.html

#228 Howard on 04.20.18 at 12:49 pm

TD lowers variable mortgage rate, suggesting no Bank of Canada rate change

https://ca.finance.yahoo.com/news/td-drops-variable-mortgage-rate-suggesting-no-bank-canada-rate-change-184754945.html

#229 crowdedelevatorfartz on 04.20.18 at 12:57 pm

@#228 Lisa

Derek wasn’t greedy. The buyer was greedy, trying to buy something they ultimately couldn’t afford.
Derek just held them to their legal obligation to PAY for what the said they would buy.

Trying “Adulting Classes” at the local RBC Seminar near you. They cover things like “Paying your bills”, Shopping for food”, etc.etc.,etc,.
It will be very educational

#230 Howard on 04.20.18 at 12:58 pm

#196 NYCer on 04.20.18 at 9:19 am
I’m surprised so much anger towards Derek.

I read comments all the time here and I guess those who are bashing Derek I guess just hate people who are “greedy” whether they are buyers or sellers.

At the end of the day, the buyers chose to overbid, chose to not put financing, bought a house more than they can easily afford.

Derek pursued legally and won legally. No laws were broken.

If that family is ruined, they did it to themselves legally.

————————————————-

You’ve simply restated what everyone here knows. I’m not sure which comments you are reading.

Nobody has accused “Derek” – he of the 14-car garage -of legal improprieties. Nor did anyone state that he doesn’t have a right to go after the buyer. Nor did anyone state that the buyer wasn’t a complete moron.

There’s a difference between what’s legally right and what’s morally and ethically right. Greed is a trait in all of us, but in some it seems to occur at particularly heinous levels.

Maybe now that the verdict is in he’ll cut the delinquent buyer a deal, perhaps at least waive the payback of legal fees, so this might well be a rush to judgment on my part.

#231 Proof ? on 04.20.18 at 12:58 pm

to comment # 225 Lisa

Please print out your comment and keep it handy for the next time someone doesn’t perform their contracted obligations to you.

#232 SoggyShorts on 04.20.18 at 1:29 pm

#197 Howard on 04.20.18 at 9:19 am
Maybe I’m a softie, but I don’t think I’d have the heart to do what “Derek” did.
At the least I’d cut the delinquent buyer a deal. Chop the settlement in half to $250K and call it a day.
No sympathy for the stupid buyers here, but Derek’s greed is a little bit galling.

******************************
I call BS. When was the last time you cut a quarter million dollar check because you felt bad about something that wasn’t your fault?
All these posters saying they would forgive the debt or cut them a deal after a year of legal fees and stress are delusional and or straight up liars.
Show me a pic of your tax return where it proves you are giving half of your money to charity.

#233 Natrx on 04.20.18 at 1:30 pm

Remember, the buyers did not contact or do anything for over a month. During that time, the sellers might have sold to someone else. ‘Derek’ also spent about 100K in legal feels so it’s not pure profit. For those who feel sorry for these buyers, it is these type of people that caused the craze, pricing people out. They just want sympathy now for trying to prevent others from ever affording their own place.

#234 IHCTD9 on 04.20.18 at 1:32 pm

#225 Lisa on 04.20.18 at 12:23 pm
Derek, if you’re reading this, you’re a jerk. You may not have done anything illegal but your greed is utterly repugnant. People like you make me sad for humanity.
___________________________

Derek and Dave made a deal and signed a contract.

Dave tried to bail, Derek held his feet to the fire.

Just because Dave and his wife (?) are dumb as dirt does not make Derek greedy.

If anyone was greedy it was Dave and Yixing. They wanted that big house that was way out of their league so bad they bid themselves into oblivion.

Derek, if you are indeed reading – I applaud you for going through with enforcing the contract, it must have been hell doing so not know what the outcome would be – but knowing for sure you were getting screwed 100% either way. I am happy you were made whole in the end.

Hats off to Justice Mark Edwards too.

#235 Your on Record Smoking Man on 04.20.18 at 1:58 pm

#177 Smoking Man on 04.20.18 at 2:11 am
The theam of my book. You cant beat the machine.
When Trump dumped Bannon I knew it was over.
He promotes John Bolton and now Ruddy Julliani back in the picture. 911 scum bags.

Screw Trump. Coward.
One term wonder.
___________________________________________
#64 Smoking Man on 02.28.17 at 9:59 pm
Deleted Seriously.

Trump Rocks….Suck it up.
Don’t worry about me. Think The first episode of Breaking Bad.
Trump the exact opposite of what MSM says he is.
The real racist is the lefty loons. Chicago, get that around your head.
I’ll bet you a million bucks that Trump helps those poor black buggers in those inner cities enter the middle class. They shoot people and sell drugs because that’s the only option. Till now. They are just votes to the globalist lefty loons.
Obviously, you never read the chapter titled Shlong Zumanga in my book. Otherwise, my post would not be deleted. You bastard
Yes It’s Jack tonight. Sorry for the aggression.
__________________________________________
Trump Rocks….Suck it up?
I’ll bet you a million bucks that Trump helps those poor black buggers in those inner cities enter the middle class.

Whats the matter eh?
You falling out of love with The Donald?
wow Smoky your twitter-verse is filled with Trump love.
I’m not quite sure what is more fiction Smoky Man or Donald Trump? Your both deserve each other. Kiss, kiss, hug,hug, make up, ew yuk.

#236 Baloney Sandwitch on 04.20.18 at 2:08 pm

What will go up, will go down. Its part of life. P&G and J&J 2 of the premier AAA companies in world – which pay great dividends are down 15% in <3 months. Why? Mr. Market is freaking out and I am buying more on margin. I have "lost" 700K in the same time – but compared to the 9 mill I made since the last top in 2007 – this is small potatoes. Gotta keep things in perspective.

#237 Stan Brooks on 04.20.18 at 2:22 pm

In case of drug addictions who is morally responsible?

The drug dealer.

In the case of credit addiction?
Banks and government.

#238 Edward on 04.20.18 at 2:24 pm

#230 Howard
Well put. It seems that many people here simply do not grasp the difference between legal/illegal and right/wrong. To them, something is “wrong” only if it’s punished. (And that’s probably why they’re so appalled at the the thought of letting the buyer’s walk. That would imply that the buyers were “right.”)

The other thing they don’t seem to comprehend is that this situation is fundamentally asymmetrical. Derek’s losses were paper ones. Letting the buyers walk would not involve “cutting them a cheque.” It would simply mean accepting less than he was legally entitled to. The buyers’ losses on the other hand are very real.

#239 Heloguy on 04.20.18 at 2:36 pm

Howard wrote “There’s a difference between what’s legally right and what’s morally and ethically right.”

There was a difference in the past when the sheep were following the fairy tail that is religion. In my real world, if it’s legal, then it is both moral and ethical.

#240 SimplyPut7 on 04.20.18 at 2:37 pm

#224 Ian on 04.20.18 at 12:03 pm

I think the US Fed sees that and wants to correct asset prices before they get more out of hand. Canada will have to follow or our dollar will decline to 60 cents.

I don’t know if the tech sector and real estate industry are prepared for the bubble they want to pop. But if the markets and housing continued to grow out of control on their own, they were going to collapse by themselves in a fashion similar to the 2008-2009 financial crisis.

It will take some time to get back to normal, everyone has forgotten it takes savings and profits to expand economies not lots of debt.

https://www.cnbc.com/2018/04/03/feds-brainard-warns-about-high-asset-prices-even-after-the-stock-correction.html

#241 Blacksheep on 04.20.18 at 2:41 pm

Stan # 219,

“Anyone who believes that prices are not over-inflated at least 3-4 times in GTA/Vancouver is just plain idiot.”
——————————————-
Inflated, yes, of course.

But, OVER-inflated? Compared to what. RE prices, pre 9/11? George W. said go out and spend and the masses went out and spent….

I will assume you missed my Ray Dalio post a few weeks back.

https://www.youtube.com/watch?v=PHe0bXAIuk0

Ray’s lecture explains “How the economic machine works in 30 minutes” and points out the small, 5-7 year recession cycles, laid over the long term, 70 year recessionary cycle.

The most important takeaway from Ray’s video for me is:

Rule # 3) “Do all that you can to raise your productivity” (@ 30:20 min.)

How is this relevant to your comment?

Well the system realized, had it let things take a more natural course that once the excesses of the long term 70 year credit super cycle would have been wiped clean (depression) the West would have simply lacked the ability to “raise your productivity” to the level required to climb out of the mud and the get the economic machine really moving again, for a multitude of reasons, which is a whole other conversation.

So… What to do?

Just keep the balls air borne, at ALL costs to avoid the depression and painful cleansing.

What ever is required was and will be done.

This puts us in uncharted waters economically as this has never been attempted on this scale, for this long, in modern times.

So I ask again…OVER-inflated?

Based on the free money of the past 10 years and the new voracious emerging markets that yearn to have the lifestyle of the West?

The growth that took place post WW II in the West, is and has been occurring with the rising Dragons from the East. We opened our markets (RE included) to the new global capitalists, but are yet somehow surprised and insulted at the results, based on demand?

Denying the reality will not change said situation, only cause one to misinterpret what has actually taken place, leading to the misallocation of funds.

So…The Cat is out of the bag, The genie is out of the bottle, Pandora’s box has been opened and 3 X income is gone, gone, gone.

Accept it or just keep bitching, its your call.

#242 IHCTD9 on 04.20.18 at 2:44 pm

#238 Edward on 04.20.18 at 2:24 pm

It would simply mean accepting less than he was legally entitled to. The buyers’ losses on the other hand are very real.
______

Derek had a signed legal contract for 2.2 Mil. You can take paper like that to the bank and borrow against it. It was (and still is thanks to the Courts) as good as cash money in your hand. 100% equal.

The paper gains became real gains the minute Dave’s signature hit the document.

Derek is the guy losing 100K in legal fees – he should be going after Dave for that too.

On the day Dave’s offer was accepted, if it had not happened, Derek would have got very near if not exactly the same from the next guy.

#243 Stan Brooks on 04.20.18 at 2:44 pm

There is no question that Brantford Ontario, Scarborough and Mississauga are more exclusive neighborhoods than Vienna or Berlin.


Why everyone should buy real estate in…Brantford?

http://www.macleans.ca/economy/realestateeconomy/why-everyone-should-buy-real-estate-in-brantford/

The Beautiful Blue Danube:

https://www.youtube.com/watch?v=IDaJ7rFg66A

Absolutely, the Branforth entertainment center – the farmers market is much more sophisticated than the Schönbrunn Palace or the State/Statts Opera in Vienna,

What a fucking joke this country has become.

#244 RyYYZ on 04.20.18 at 2:50 pm

“Well put. It seems that many people here simply do not grasp the difference between legal/illegal and right/wrong. To them, something is “wrong” only if it’s punished.”

You want to talk about right and wrong? I think it is morally “right” to hold people to the (legally binding) agreements that they voluntarily enter into. And that it is wrong to enter into agreements if you don’t know that you can actually fulfill your end of the bargain.

And Derek’s losses were not only “paper” losses. He could have accepted another offer, for nearly the same amount, from someone who would actually fulfill their obligations. Instead the buyers dragged their feet and cost him REAL money, not theoretical money (like me saying “I could have sold my house for $400K last year”).

#245 Mattl on 04.20.18 at 2:57 pm

“There’s a difference between what’s legally right and what’s morally and ethically right. Greed is a trait in all of us, but in some it seems to occur at particularly heinous levels”

There is no moral or ethical issue with enforcing a contract that was signed in good faith. There are issues with breaking an agreement signed in good faith.

I think its wonderful that a lot of you would take a 480k hit on a transaction. Thats a nice (and stupid) thing to do but there is no moral issue at play here.

Is it immoral for a buyer to close on a house that went up in value between contract signing and close? All of you that would void the agreement, I take it you would be ok with a seller refusing to close on a house that was bought under market due to a price increase? Ya, didn’t think so. Jealousy runs strong in this comments section, whats yours is mine and and whats mine is mine is the underlying current here.

#246 Islander on 04.20.18 at 3:06 pm

#130 randy on 04.19.18 at 10:18 pm
“Same here on South Vancouver Island. Houses using inflated 2018 assessed values are selling at or above listing price in most cases if they are quality. If they are not, then it takes weeks or months – but they still sell and near asking. But no decline in prices, which are already up 30-50% from two years ago; inventory is non-existent; and there is no palatable awareness that maybe the market ‘is supposed’ to change because of B20. Sorry, too much Vancouver money fleeing over here…

Nice try. Victoria home sales are down 40% in March from 2 years ago and inventory has been increasing for months. We have more inventory here than last year and sales are way down from 2017. Days on the market has doubled to sell. The only reason we are not seeing price drops is because so few homes are selling. The spec tax hasn’t even started yet. A storm is brewing here. Come fall and winter things are going to get ugly here fast.

———-
Nice try, but where did I say Victoria? I said South Vancouver Island which includes all the communities in the Capital Regional District and north like Cobble Hill and Duncan..

Houses are still selling at list or over on inflated assessed values because there is no inventory and no sales. Unless there is a deluge of inventory, whichh is very very unlikely as the Spring market has passed, people best get used to the new norm of low inventory, low sales and high prices…

#247 Stan Brooks on 04.20.18 at 3:07 pm

#241 Blacksheep on 04.20.18 at 2:41 pm

Yes, way over inflated. Compared to real income, quality of life, opportunities, alternatives.

You watched Ray Dalio, that is good, but you derived nothing from that.

You post overall is exceptionally stupid so I will only address some key points:

1. There is no growth in the west in the last decade or two. There is decline through outsourcing and credit explosion.
The growth is in the east.
Go to a Canadian hardware/electronics store and find me something not produced in Asia/Europe.

2. ‘Free’ money is not free and is not money.
It is your empty brain accepting it as such.

credit is not money
and it is not free.

You will never ever retire due to that.

3. Over allocation to housing is consumerism and destroys economy in long run.

We are going to be hit with an inflation the like of one you have never seen in your (short) life accompanied with the complete inability of the idiots in power to do anything (i.e. raise rates) due to extreme indeptedness.

I never saw a single wealthy person living on the ‘ever growing’ balance of his credit card.

#248 Stan Brooks on 04.20.18 at 3:09 pm

#241 Blacksheep on 04.20.18 at 2:41 pm

Oh, I forgot:

You well see soon/in Canada what a severe inflationary depression looks like.

#249 DriveByArgument on 04.20.18 at 3:11 pm

It’s easy to see why Dereck is in the wrong here:

He has money.

And in this country, having money is evidence of a criminal or immoral lifestyle. End. Of. Story.

If he has any left over after paying his lawfully owed taxes he’ll be a “filthy tax cheat” too.

If he tries to withdraw more than a few thousand of it from a bank he will be put on a terrorist watch list since “no one *needs* $5,000 in $100 bills unless they are a drug dealer”

I once read a story about a Canadian minimum wage earner in an industrial laundry company winning $30K on a scratch ticket. She eventually got run out of her job by people who couldn’t understand why she was still coming to work.

The only escape for Dereck is to somehow turn that $400K into $25 million or so, put it in a trust that avoids (or evades) taxation when it goes to his kids. Then they can become finance minister and bask in the adoration of those who are sick and tired of people like Dereck ruining this country.

#250 Mattl on 04.20.18 at 3:13 pm

#238 Edward

Just so I’m clear, you are ok with your boss withholding a few paycheques a year due to hardship, and you wouldn’t consider that a loss. So you have an 80k salary in place, he doens’t cut cheques in December, so you only realize 75k in income for the year, and that isn’t a real loss? I mean you never had that cash in hand so whats the big deal? Business hits a tough spot, the right and moral thing to do is cut your boss a break, miss a few months income and move on.

Would you be ok with your life insurance policy paying out at 80%? Whats the big deal, you wife is getting a windfall right? I mean you never had that money in hand so that extra 200k is not a big deal.

Some of you really need to think through what you are saying. You are so caught up in your jealousy for a seller that hit a big number that you can’t think this thing through. Either contracts made in good faith matter or they don’t. And the person that breaks a contract made in good faith is ALWAYS the morally deficient one.

#251 Entrepreneur on 04.20.18 at 3:16 pm

WOW, and this is where us Canadians are now and what a mess we are in. What country is T2 in now? One has to wonder about him.

Real estate is mostly bought with debt through the banks then sold with debt. The banks play along. The governments play innocent, dumb. And then added #171 Chelsea comments about the black market corruption adding fuel.

And the buyer is being played/masterminded by the system, whether right or wrong in signing the contract. There is too much money/debt in play that will ruin a family (and looks like many more to come).

It seems to me that when high-housing-pricing manipulation should be scrutinized so this does not happen to others and to protect Canadian families, especially the children.

And with housing so expensive jobs are to fight over for, a dog-eat-dog world. Lack of respect for humanity and the earth.

#252 Hamsterwheelie on 04.20.18 at 3:17 pm

#201 #3 of the majestic 12

Comraderie of the financial situation is appreciated – every day covered in plaster dust now = getting near the end. We also have stellar credit but now just the 2 properties, much lower value than you – look forward to telling the bank that refused us to $uck it – (and still sign up with some other one) Cheers!

#253 SimplyPut7 on 04.20.18 at 3:22 pm

#228 Howard on 04.20.18 at 12:49 pm

Or TD is taking a page out of the private lenders/MICs books:

1. Offer lower rates to new borrowers

2. Raise them at renewal, because B20 makes it difficult for them to leave you.

3. Trap them into mortgage debt they will take the next 25 – 50 years to pay off when you include the HELOC you gave the borrower because you know the low interest only payments and large credit line will provide a false sense of security that makes them believe their debt levels are manageable.

#254 Suck to be you.. I know I know on 04.20.18 at 3:25 pm

If you check out sold record around my area ( Riverdale), you won’t believe this price drop non sense. Everyone of those houses were sold recently were at leat 15-30% over-asking. And they weren’t priced artificially low.

#255 Suck to be you.. I know I know on 04.20.18 at 3:30 pm

#225 Lisa on 04.20.18 at 12:23 pm

Both Derik and Dave are grown men. They should be responsible for their action. I am definitely sure Dave won’t split half of this profit with Derek imagining price went up 25%.

#256 Alistair McLaughlin on 04.20.18 at 3:30 pm

Blacksheep, you just made a “new normal” argument.

That’s an automatic FAIL.

#257 SoggyShorts on 04.20.18 at 3:44 pm

#238 Edward on 04.20.18 at 2:24 pm
#230 Howard
The other thing they don’t seem to comprehend is that this situation is fundamentally asymmetrical. Derek’s losses were paper ones. Letting the buyers walk would not involve “cutting them a cheque.” It would simply mean accepting less than he was legally entitled to. The buyers’ losses on the other hand are very real.
That is idiotic. He wasn’t thinking about maybe selling his home. He sold it. That 500K was very real.
Selling it for 500K less because of someone else trying to cheat out of a contract is a very real loss.

If your boss decides not to pay you, is that just a “paper” loss since you don’t have to cut a cheque?

#258 Jay (not that one) on 04.20.18 at 3:45 pm

Don’t invest money you aren’t prepared to lose.

“Oh, but these people aren’t investing!” — bullshit. Nobody would pay 2.2 million dollars for something they don’t consider to be an investment. That’s more money than many Canadians will make during their entire life.

Don’t make huge risky investments with borrowed money. If the margin call comes, you’re going to be on the hook for the remainder.

“But they couldn’t afford a house otherwise!” — bullshit. There are hundreds of thousands of houses across the country available for a tenth of what these idiots spent. My mortgage was less than 10% of what these idiots offered for a house. They insisted on buying a 2.2 million dollar house in Toronto.

We’re all adults. We make informed decisions and bear the benefits of good decisions and the burden of our bad decisions. That’s why we need to be careful that we’re making good decisions.

“Oh, Derek should have let them off the hook!” — bullshit. They made an agreement to purchase a property. As adults, they signed the papers. As a direct result of their willful actions, Derek suffered damages because he had to relist the house when the housing market had cooled and he made less than he could have.

We are adults. All of us. Act like it. Whether it feels good or it hurts.

#259 SoggyShorts on 04.20.18 at 3:45 pm

#237 Stan Brooks on 04.20.18 at 2:22 pm
In case of drug addictions who is morally responsible?
The drug dealer.
In the case of credit addiction?
Banks and government.

*****************************
Please tell me that was sarcasm.

#260 Overheardyou on 04.20.18 at 4:15 pm

#82 RentYVR on 04.19.18 at 7:49 pm

———-

Wow. Just wow. Do you even read Garth’s posts?

#261 Overheardyou on 04.20.18 at 4:26 pm

#89 Lost…but not leased on 04.19.18 at 8:07 pm
#53 jwk

I agree…..the issue is one sided…WHY should a developer be able to change the terms of the contract…let alone cancel it outright ?

Seems like any other contract( other than RE) in the real world would have the courts on side of the buyer/customer/purchaser.

The implication is Gov’t inherently sides with the Banks and Developers..and to hell with everyone else.

——

Lets see…the developer takes on all the risks to get it built. While you park your money there hoping to make money when you sign on the unit. Sounds fair right?

#262 Peter on 04.20.18 at 4:48 pm

I disagree, Derek would have been paid cash over 2 mil last year. Instead he’s 0.5 mil short still. Why would he forgive him. This buyer has been buying and selling to accumulate his wealth to 1 mil house doing Realtor job. If you weren’t happy with the 1 mil house (that he’s currently living in), and got greedy to buy 2.2 mil, then it’s time to pay the price.

#263 dee on 04.20.18 at 5:08 pm

but how do homes in north york that are old, not renovated, far from transit, full of blue collared workers go for $800k? I think this thing is bigger than most think. The downside could be breathtaking. Not that it will be but it could be. Prices rose too far too fast for too long. Ridiculous by every metric imagineable. Top it off with absurd personal and public debt and our one trick pony (real estate) is seriously running out of steam. Happy Friday everyone :)

#264 Dan from Richmond Hill on 04.20.18 at 5:45 pm

Hey Stan,

Maybe you like this one, too:

https://www.youtube.com/watch?v=mczwsV-Wz-Q