Despite popular belief, the high demand and increasing population aren’t Ontario real estate’s greatest driving factors! The downturn in real estate values is due to rising interest rates, and the swift change in market conditions made it more challenging to sell. One of the new phenomena this seems to have created is an increase in the number of misrepresented properties on the MLS.

In a recent episode of KT Confidential | The Real Estate Podcast, Ariel and Adrian discuss how over-emphasizing or completely lying in a listing has the opposite impact on the sale that was intended.

The State of the Housing Market in Ontario

Things have changed since the record sales of the COVID real estate boom. Properties aren’t selling in two days, or some cases, selling at all. Real estate agents riding the coattails of a booming real estate market don’t know what to do. It’s an interesting time. The change in the market will inevitably weed out fly-by-night, part-time real estate agents trying to capitalize on the hot market.

The easy days of spending ten hours and selling a home a week are over. House prices have come down; they’re taking longer to sell, and homeowners are becoming increasingly aware that a good real estate agent will profoundly influence a sale’s outcome.

What’s a Real Estate Agent’s Greatest Expense?

For example, one of the greatest expenses when preparing a home is the cost to stage the house and the ongoing rental of the staging. Over the last decade, having to incur the cost of renting staging for more than a month was a rare occurrence, however, now, it’s a commonplace, and it’s getting expensive, too expensive for those not committed to running their business as a true business.

The result is that fewer agents are bothering to stage, or opting for virtual staging instead. This leads to many poorly presented properties and a market where the nice homes shine.

Home Staging vs. Virtual Staging

As you’ve probably guessed, virtual staging is when the listing photos have been edited, having virtual furniture and decor superimposed into the image, making it appear staged.

With increasing costs, virtual staging is becoming more common. And, while virtual staging has a time and place, it’s not the best option for most properties listed for sale, and here’s why.

Investing in a Property Right Now

Is it a good time to buy a property right now? Despite higher rates and carrying costs, it’s better today than in January or February of 2022, pre-interest rate hikes. In three or five years, you’ll likely be able to refinance at a lower rate and be farther ahead than people who bought at the height of the real estate market.

Misleading Property Descriptions

You can’t blame a seller for trying to make their property stand out by highlighting the home’s best features. But at some point, overenthusiasm becomes pure invention.

For example, you can get away with saying, ‘over 3,000 square feet of living space,’ because most people realize it means the finished basement is included in the measurement. However, listing the home as being 3,000 square feet is not allowed; only above-grade square footage counts.

Of course, as soon as the buyers walk into the property, they’ll realize that the supposedly 3000 square feet home is just 2300 square feet plus a finished basement. This will result in an upset visitor and no sale.

You won’t believe the types of things that we come across when viewing properties, including this misleading listing!

Who’s legally responsible when a property is misrepresented?

Property owners and real estate agents are equally responsible for ensuring that a property is properly represented and known problems are disclosed. The seller could be legally liable, as well as whoever buys the home and the real estate agents representing them.

Check out this CTV News article from 2020 in which an Oshawa couple won their case when they filed a complaint with the Real Estate Council of Ontario (RECO) due to a missing gazebo and hot tub.

Misrepresented (Illegal) Apartments

Another thing Adrian and Ariel are finding is finished basements being listed as basement apartments -despite clearly not being an apartment. Adrian recently had an unbelievable conversation with a Realtor who either was a great actor or genuinely had no idea that they were severely misrepresenting their property, indicating it had a finished basement, even though there was no kitchen, no egress windows, and no separate entrance; “you just need to add a door” he said.

The problem with illegal basement apartments has become such a problem that our team will no longer represent a landlord or a tenant in the lease of an illegal, non-permitted basement apartment.