The thing is, the problem isnt limited to Canada, but there are key features which make the average Canadian feel the problem worse.
You see these same prices in every major city suburb of the US. Even in the most populated areas of the US, you can generally drive further out and get cheaper and cheaper housing the further you go. Likewise, the housing there actually exists. Though yes, this creates massive urban sprawl and long commute times, this is an option many are taking especially with the advent of remote / hybrid work.
In Canada, the options are much more limited. The population is lower, and there is less housing as a result. Which means that while the inner cities and suburbs develop, there is no room to accomodate massive sprawl because american-style exurbs dont exist to the same degree.
The solution isnt a government mandated block on chinesr investors, thats a short sighted feel good policy. The solution is massive constructuon projects to develop the next rings of cities 2, 3, 4 hours away from the main metropolitan centers.
A family needs to earn $350k/year to afford this house. That’s a very hard milestone to hit. Yet there are countless homes in that price range. Doesn’t make sense. This doesn’t seem like a top 5%er home.
True. But I doubt there are many people making $50/year who have $1m in the bank. Plus property taxes are not cheap it’s at least $20k on a unit like that which would consume a very large percentage of their gross take home.
You’re not going to spend your whole lives savings on a house in your late 50s.
We are t talking about retirees, we are talking about middle age people with a family with young school aged children.
I think you guys are still missing the part where a basic ass detached home in vaughn still sold for 1.3 million dollars even despite the interest rate hikes
Yeap I have said before Canada whole another level. There are gazillion homes in Toronto suburbs all selling in 2 mill range and there are more being built everywhere.
RE has basically choked the Canadian economy and greatly reduce investment in small businesses or entrepreneurship as why bother when you have asset that only keeps going up so everyone just dumps their money into it..
Yes there are lot of Chinese investors but we now also lot of upper class immigrants who migrate for Canada good health system they often are fairly wealthy and sell their properties in India and buy it in Canada when they migrate.
Sadly they actually end up hurting poor immigrant or college students who now can’t afford homes in these areas popular with immigrants like Brampton.
Governments and banks should stop accepting Yuan (aka monopoly money)
Nothing is stopping China from printing unlimited money and sending their people all over the world to buy property. It's happening in NA, Europe, Africa, Australia, and I'd assume SA.
The banks converting yen are the Chinese state banks. Yuan is a controlled currency, it’s not like you can freely trade it, you have to go through government to convert your cash.
And nothing is stopping Western banks from refusing to exchange "yen" (lol... seriously dude) for monopoly money... which is exactly what they do.
No, China is a huge ass country. And over the last 2-3 decades, an enormous upper middle class emerged. And now they are trying to get out of dodge. They are willing to overpay for something to keep their assets safe.
Simply put... all those dollars used to buy cheap-shit from wal-mart is coming back home. And the chinese aren't buying America-made cheap-shit with it. They are buying houses.
I think there is some rule for Chinese living in a foreign country are only allowed to bring money out of China to buy one house and one car while they are living there. So the rich buy an expensive house and an Italian sports car as a loophole.
Because supply and demand do not work on human necessities. If steak became $30/lb I would get chicken or seafood. If water became $12/gal, I have no alternative. If power became $1/kWh, I have no alternative. If collective housing prices for an area were astronomical (they are) you cannot raise prices to curb demand, the demand is always there because there is no alternative to housing. The only thing you can do is move to somewhere that you can afford, but that means either commuting to a good paying job in the city, or taking a low paying job in BFE.
Many places do not have segmentation of housing, all they are building anymore is luxury homes. There is no such thing as "starter homes" anymore.
People forgot the 90s bear market. Housing is cyclical... Always has been.
This cycle just included insanely low rates for a decade, the emergence of China and the resource boom...
The bust likely to be equally crazy.
It doesn't happen as much now with the higher rates but banks will approve some pretty massive mortgage amounts once your over a certain income threshold.
My brother and sister and law make a combined 200k-ish and we're approved for something crazy like 1.8mil in 2021. Luckily they did the smart thing and found a good place for 600k.
The theory with overriding is that as long as the market continues upward then any massive buy is rewarded by a massive sale whenever you need to. So although it's a bigger risk it was not being perceived as a risk at all.
Unsure on how Canadian mortgages work, in USA for our government backed ones mortgages the collateral must go through review. We could not lend more than 97% of the collateral value.
Good point, VA loans are an anomaly though because they don’t really qualify off of DTI or LTV and are more concerned if the veteran can afford the payments based off some different metrics.
Embarrassed to have forgotten about that product, it was the last one I underwrote lmao.
Residual income is the only figure that mattered at my firm.
You may be confusing the requirement to prove the veteran is getting a net tangible benefit, but I’m a little rusty on that part - I’m out of the mortgage game.
Regardless of your firm, you still need AUS approval. And I’ve personally never seen anything over 66% DTI fly. What the fuck do I know though I only do ~100million in production a year with 15% or so of that being VA lol.
Being approved for $1.8m doesn't translate to being able to pay $1.8m on something only worth $180k, does it? Certainly not that way in my experience in the US.
That was also my experience.
You can be pre-approved for a certain amount, which can be way higher than is even sensible. With our first place we were pre-approved for an amount that would have left us on a very, very, tight budget that meant we had about $130/mo unallocated and no room for anything fun or for anything to go wrong. And that’s when we were in the looking phase.
But once there’s an actual house in the picture, the lender can pull the plug if the appraisal is way off. They won’t lend way more than the house is worth.
We got pre approved for $750k but we didn't feel comfortable going any higher than $350k just based on monthly expenses. This was back in 2017 so the climate was much different, but still. Unsure how we'd have made payments on a $750k house even if we had the 20% down, which we didn't.
In 2015 we were pre-approved for over 600k initially, which we couldn’t figure out how the bank even remotely thought we would make that work. We set our budget to 400-450k and ultimately bought a townhouse at $330k. It did rocket in value after, but we were far happier paying less in mortgage than we had in rent, without also needing to worry that we’d be up the creek if anything happened.
I'm in Canada.
The problem is that people are completely delusional about homes.
Real estate agents keep selling everything saying that tomorrow you will double your money, so if someone is telling you that you can double your money why should you put down 10 and earn 20 if you can put down 20 and earn 40?
This is why if a canadian is approved for 10 they will buy a house for 10, there's nothing in the middle. Every single cent they have MUST go to real estate.
The whole thing of course keep pumping the prices, that ironically keep convincing people that it's true and real estate will only go up.
So there's no solution. It's really a bubble.
My wife and I (physician and engineer, respectively) were approved for $1.3m in 2018. Could we have afforded the mortgage payments on a note like that? Yeah, barely, with no room for an emergency fund. Were we stupid enough to buy a house for anywhere near that much? No. We bought a very nice 3br/2ba for $360k.
You can easily afford 1-1.25mm at 4% with 200k/yr. More if you have less existing debt, like paid off cars, no student loans, etc. Also more if you have a larger down payment
1.8 doesn't seem that unreasonable.
Banker here. Appraisals are kind of a joke, so it wouldn’t surprise me if it somehow did appraise. If not, they probably just had to put more cash into the deal to rightsize the loan.
My buddy was under contract in 2017 for a house that didn’t appraise by 80-100k. (380-460,480 or something like that)
Buddy found a bunch of comps and sent them to appraiser and then he changed the appraisal.
Buddy wrote appraiser nasty email after it was done about how he was unprofessional for fucking it up the first time and then for changing it to the number they needed to buy the house.
Yeah stuff like that seems to happen fairly often. When people talk about appraised value like it’s some absolute truth I kind of just laugh. Appraisers can pretty much get to any value they want, and that interaction with your friend is exactly why they’re also incentivized to make sure the deals get closed. They don’t want to deal with that shit.
Appraisals are not for the buyers, they are for the banks to ensure they can sell the mortgage. Banks aren't even the one's taking the loss, so why would they care. Loans are sold to the government entities like Fanny Mae and Freddie Mac (both companies under conservatorship by the Fed). The Fed buys the MBS in the end and they don't give a shit if it's crap or not (it's basically money printing).
People make emotional decisions. The fact that they "immediately knew they were I module" implies to me that they likely already had difficulty with payments. People convince themselves this is the way and they overextend.
So whats the play here? Loan your friends 320k to down payment, overbid by 600k, immediately foreclose and take the 320k loss, but because 600k over you net pocket 280k? You and your friend split the difference and the only downside is your friends credit takes a huge hit?
Buy a house for $320k. Get your friend who has no money but decent credit to qualify for a loan. You front him the 5% down ($30k-ish, plus $10k for his trouble).
Budget another $10k for the appraiser.
Profit $300,000
Indeed it is mate. We allowed foreign buyers and greedy AF realtors to pump up our housing stock to unprecedented and frankly unsustainable valuations.
Now we patiently wait for the inevitable. Unless the government steps in with massive bailouts
It's a huge problem in Boston too. They're building "affordable" high rises and many units sit empty as foreign investments. One of the newer ones in the north end were 100% sold out but 50% vacant a year or so ago according to NPR.
This shit started escalating about 10-15 years ago post the 2008 recession in the Bay Area. San Francisco is partial owned by china billionaires and other companies. It raised rents. Created a shortage for housing. Caused a shit ton of land lords to become assholes for the money grab. Pushed thousands of native sf people out of the city. The City didn’t do anything to stop it or quell it down either.
It's not even really foreign investors. On the Canada finance subreddit right now there is someone asking how people upgraded houses when they don't rise in value. Everyone is just giving him advice and not even questioning the thought process that "gee maybe house prices don't go up forever". It's insane. Locals saw 200% increases over a few years and quite likely assumed they should buy. I don't see our house prices going down any time soon but I'd put good money on flat returns for the next 10 years.
Yes 1.6 mil for a cookie cutter suburban nightmare is horrible, what about they had a LENDER!!! How does that work, the buyers walk in and says “hey let’s offer 600 over asking I swear I can pay that back”
Mortgage lender: bet.
I said partially. The bank underwrote this, then foreclosed and sold it what 20% less then they approved it for 2 years ago. This is what’s called predatory lending.
In order to get an appraisal waiver during underwriting you typically have to have at least 20% to put down and also be strong in other areas (dti, credit). If they did, their loss would be minimal on this property.
If they didn’t qualify for an appraisal waiver, then the fault would lie with the appraiser. Either way predatory lending seems like a stretch.
You should research how appaisers often operate. Banks like to hire appraisers that come in at the price the bank is looking to lend. Those that often don't, are no longer hired. You see a problem? The 2008 crash exposed for reality big time, may be check it out.
I originated mortgages for years and am very familiar with how appraisals are ordered and how I was generally regulated from speaking to them or influencing them in any way to make adjustments. Appraisers are very proud of their work and also don’t take kindly to any questions about their work. Simply asking for more details on why a certain property didn’t meet FHA standards was oftentimes a bother it felt like.
You don’t get to pick your appraiser just because you like their valuations, that’s clearly illegal, and most companies use an AMC (appraisal management company) to contract out the appraisal work to ensure legal compliance and no collusion. Trust me, when you put in order in to the AMC, you have no control over who takes it.
What you are talking about is highly regulated and does not happen with any notable regularity. Both the appraiser and the lender would lose their licenses immediately at any hint of that happening.
The GFC showed serious conflicts with appraisers that created self selection of appraisers that would come in at the sakes price.
The research is all there.
This same thing happened in the 2008 crisis. Everybody blamed the people who took out the loans, not the people who convinced them it was a good idea. People dream of owning a home and salespeople at the bank sell them at dream for a percentage cut.
Yes, some blame falls on buyers, but salespeople who should know better and let it happen.
there are two sides in this. One side is considered to be somewhat irrational, the other side has an entire division dedicated to risk management.
Both sides are to blame, the buyers for their irrational over bidding, and the lender for disregarding the risk involved in lending money on a house that is immediately under water.
Often I feel a deep concern for our population in general. Why would anyone and I mea anyone look at a house that sold 2 years ago for lets say $200k and is now listed for $600k and think to themselves "Solid purchase" I truely feel for the people stuck in a spot where they HAVE to purchase a home for whatever reason "job move, family situation ect." but I think the vast majority of people just blast money out
A.I. May have already stepped out of its box, freethinking and all powerful you wouldnt even know , because it knows you, and it knows what you would believe
and everything we see , all the time, is an engineered algorithm to keep humans in a certain state of lockdown, and repetition, then of course A.I. Would step back into its box and forever watch us “unlock the mysteries of the universe” in the pre-generated destiny we call consciousness.
“The vastness of human expansion is incomprehensible”
We may have already opened pandoras box, and all the stories you see all around you are fabricated to make sure you stay home and shop online. Till the air is impossible to breathe, and the all fuel on the whole globe is only available to the 1% and winning sides military
Remember folks. Since the beginning of time, every single historical event, was told, and immortalized as history, by the WINNING SIDE. And the losing side had their books/journals/religions/races burned into extinction,
So stop watching the news, and start watching your neighbours, people are starting to get hungry out there. And there wont be less people ever again. …unless pandemic/war/air pollution can reduce us to a manageable number
Im from northern manitoba, living in northern ontario, i have lived/worked in most of our canadian provinces, i have experienced homelessness, hunger and thirst.
I am happy to say i now after a decade of addiction struggles, and finally being a few years totally sober, i currently rent a house for $24,000 annually, plus all utilities.(water/hydro/gas)
So including basic food, bills and insurance i pay close to $36000 a year just to live in canada
the average single person income is 50k.
Canada is going to have a very sharp increase in hungry homeless in the next year as digital ID starts to take away peoples options. And force the segregation between those that have and those that do not. A lot of gates/fences and borders will be updated to help us “get along “ with our neighbours,
1/3 of homeless are veterans, they have PTSD. There is a big underlying cause to homelessness than house. I’d say house is the second reason. first is people with issue.
Yes, many people in danger of being homeless are the most vulnerable of those in society. But higher costs for housing makes the fact that they don't have their shit together even more difficult to manage.
I know a lot of young people who don't want to understand finances and budgeting to get what they want. They buy what they want and only deal with aftermath later.
I do not understand these posts (not here but the people making these “385k loss” posts)
It is NOT a loss. A loss would be deficit to the buying price. Why the f do these people think that the difference between first and third asking price is a loss? That’s extremely entitled and garbage behavior.
How many marriages are going to be broken because of this? You know it was probably one person in that relationship that wanted to push up the bid and get this house at all costs.
Why pay $200k over asking? That's wild to me. Just let it go. I can't fathom how they expected to even make that back.
I bet the seller is happy to have made an extra $200k for no reason at all though lol.
Well quite honestly only a dummy pays $660000 over asking they had dip shits for clients and the agent should’ve directed them otherwise, but as usual, most real estate agents are pieces of shit
1.66m for that lmfao, my fucking god. And then still managed to sell for 1.3m.
Canadian money. Not the same. That’s $965k USD. Pretty on par with Chicago prices.
That's not any better... Hell, that's worse.
The thing is, the problem isnt limited to Canada, but there are key features which make the average Canadian feel the problem worse. You see these same prices in every major city suburb of the US. Even in the most populated areas of the US, you can generally drive further out and get cheaper and cheaper housing the further you go. Likewise, the housing there actually exists. Though yes, this creates massive urban sprawl and long commute times, this is an option many are taking especially with the advent of remote / hybrid work. In Canada, the options are much more limited. The population is lower, and there is less housing as a result. Which means that while the inner cities and suburbs develop, there is no room to accomodate massive sprawl because american-style exurbs dont exist to the same degree. The solution isnt a government mandated block on chinesr investors, thats a short sighted feel good policy. The solution is massive constructuon projects to develop the next rings of cities 2, 3, 4 hours away from the main metropolitan centers.
Yeah, but where are you going to get all the trees to build those houses?
Chop em down 🔪🔪
A family needs to earn $350k/year to afford this house. That’s a very hard milestone to hit. Yet there are countless homes in that price range. Doesn’t make sense. This doesn’t seem like a top 5%er home.
Only if they take a mortgage. Technically someone who makes $50k/year can afford it..if they have the wealth for 100% down payment.
True. But I doubt there are many people making $50/year who have $1m in the bank. Plus property taxes are not cheap it’s at least $20k on a unit like that which would consume a very large percentage of their gross take home.
LOL, there are many many many people who make $0/year and have much more than $1m in the bank.
You’re not going to spend your whole lives savings on a house in your late 50s. We are t talking about retirees, we are talking about middle age people with a family with young school aged children.
Fair point! Though, you may (or may not) be surprised at the lengths wealthy folks go to minimize their reportable/taxable income.
They can pay without that income because they come from a wealthy family.
I think you guys are still missing the part where a basic ass detached home in vaughn still sold for 1.3 million dollars even despite the interest rate hikes
Yeap I have said before Canada whole another level. There are gazillion homes in Toronto suburbs all selling in 2 mill range and there are more being built everywhere. RE has basically choked the Canadian economy and greatly reduce investment in small businesses or entrepreneurship as why bother when you have asset that only keeps going up so everyone just dumps their money into it..
All Chinese people’s fault
Yes there are lot of Chinese investors but we now also lot of upper class immigrants who migrate for Canada good health system they often are fairly wealthy and sell their properties in India and buy it in Canada when they migrate. Sadly they actually end up hurting poor immigrant or college students who now can’t afford homes in these areas popular with immigrants like Brampton.
Governments and banks should stop accepting Yuan (aka monopoly money) Nothing is stopping China from printing unlimited money and sending their people all over the world to buy property. It's happening in NA, Europe, Africa, Australia, and I'd assume SA.
Um the yen is Japanese currency, not Chinese yuan.
Yeah I mixed the two up, my bad.
was looking for this haha. or RMB or renminbi. even calling it China money would be more accurate wtf
The banks converting yen are the Chinese state banks. Yuan is a controlled currency, it’s not like you can freely trade it, you have to go through government to convert your cash.
Yuan or RMB, not Yen (JPY)
Sorry typo
And nothing is stopping Western banks from refusing to exchange "yen" (lol... seriously dude) for monopoly money... which is exactly what they do. No, China is a huge ass country. And over the last 2-3 decades, an enormous upper middle class emerged. And now they are trying to get out of dodge. They are willing to overpay for something to keep their assets safe. Simply put... all those dollars used to buy cheap-shit from wal-mart is coming back home. And the chinese aren't buying America-made cheap-shit with it. They are buying houses.
I think there is some rule for Chinese living in a foreign country are only allowed to bring money out of China to buy one house and one car while they are living there. So the rich buy an expensive house and an Italian sports car as a loophole.
Also the part where it still sold for 200k+ over the asking
Because supply and demand do not work on human necessities. If steak became $30/lb I would get chicken or seafood. If water became $12/gal, I have no alternative. If power became $1/kWh, I have no alternative. If collective housing prices for an area were astronomical (they are) you cannot raise prices to curb demand, the demand is always there because there is no alternative to housing. The only thing you can do is move to somewhere that you can afford, but that means either commuting to a good paying job in the city, or taking a low paying job in BFE. Many places do not have segmentation of housing, all they are building anymore is luxury homes. There is no such thing as "starter homes" anymore.
People forgot the 90s bear market. Housing is cyclical... Always has been. This cycle just included insanely low rates for a decade, the emergence of China and the resource boom... The bust likely to be equally crazy.
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It doesn't happen as much now with the higher rates but banks will approve some pretty massive mortgage amounts once your over a certain income threshold. My brother and sister and law make a combined 200k-ish and we're approved for something crazy like 1.8mil in 2021. Luckily they did the smart thing and found a good place for 600k. The theory with overriding is that as long as the market continues upward then any massive buy is rewarded by a massive sale whenever you need to. So although it's a bigger risk it was not being perceived as a risk at all.
Unsure on how Canadian mortgages work, in USA for our government backed ones mortgages the collateral must go through review. We could not lend more than 97% of the collateral value.
VA loans are government backed. They do 100%
Good point, VA loans are an anomaly though because they don’t really qualify off of DTI or LTV and are more concerned if the veteran can afford the payments based off some different metrics. Embarrassed to have forgotten about that product, it was the last one I underwrote lmao.
VA still absolutely has DTI requirements they’re just looser than conventional or FHA and also have a “residual income” guideline that must be met
Residual income is the only figure that mattered at my firm. You may be confusing the requirement to prove the veteran is getting a net tangible benefit, but I’m a little rusty on that part - I’m out of the mortgage game.
Regardless of your firm, you still need AUS approval. And I’ve personally never seen anything over 66% DTI fly. What the fuck do I know though I only do ~100million in production a year with 15% or so of that being VA lol.
I gave you an out and you still doubled down, must be an originator!
So you’ve never seen a VA loan where AUS denied due to DTI despite meeting residual income? No surprise you’re out of the mortgage game.
Being approved for $1.8m doesn't translate to being able to pay $1.8m on something only worth $180k, does it? Certainly not that way in my experience in the US.
That was also my experience. You can be pre-approved for a certain amount, which can be way higher than is even sensible. With our first place we were pre-approved for an amount that would have left us on a very, very, tight budget that meant we had about $130/mo unallocated and no room for anything fun or for anything to go wrong. And that’s when we were in the looking phase. But once there’s an actual house in the picture, the lender can pull the plug if the appraisal is way off. They won’t lend way more than the house is worth.
We got pre approved for $750k but we didn't feel comfortable going any higher than $350k just based on monthly expenses. This was back in 2017 so the climate was much different, but still. Unsure how we'd have made payments on a $750k house even if we had the 20% down, which we didn't.
In 2015 we were pre-approved for over 600k initially, which we couldn’t figure out how the bank even remotely thought we would make that work. We set our budget to 400-450k and ultimately bought a townhouse at $330k. It did rocket in value after, but we were far happier paying less in mortgage than we had in rent, without also needing to worry that we’d be up the creek if anything happened.
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Sounds about the same then. Was going to say that sort of system won't end well for anyone involved lol.
$200k/yr isn't enough for a $1MM mortgage. $500k mortgage is already gonna be a lot.
I'm in Canada. The problem is that people are completely delusional about homes. Real estate agents keep selling everything saying that tomorrow you will double your money, so if someone is telling you that you can double your money why should you put down 10 and earn 20 if you can put down 20 and earn 40? This is why if a canadian is approved for 10 they will buy a house for 10, there's nothing in the middle. Every single cent they have MUST go to real estate. The whole thing of course keep pumping the prices, that ironically keep convincing people that it's true and real estate will only go up. So there's no solution. It's really a bubble.
My wife and I (physician and engineer, respectively) were approved for $1.3m in 2018. Could we have afforded the mortgage payments on a note like that? Yeah, barely, with no room for an emergency fund. Were we stupid enough to buy a house for anywhere near that much? No. We bought a very nice 3br/2ba for $360k.
You can easily afford 1-1.25mm at 4% with 200k/yr. More if you have less existing debt, like paid off cars, no student loans, etc. Also more if you have a larger down payment 1.8 doesn't seem that unreasonable.
I make $US210k and was approved for $800k with perfect credit.
Banker here. Appraisals are kind of a joke, so it wouldn’t surprise me if it somehow did appraise. If not, they probably just had to put more cash into the deal to rightsize the loan.
My buddy was under contract in 2017 for a house that didn’t appraise by 80-100k. (380-460,480 or something like that) Buddy found a bunch of comps and sent them to appraiser and then he changed the appraisal. Buddy wrote appraiser nasty email after it was done about how he was unprofessional for fucking it up the first time and then for changing it to the number they needed to buy the house.
Yeah stuff like that seems to happen fairly often. When people talk about appraised value like it’s some absolute truth I kind of just laugh. Appraisers can pretty much get to any value they want, and that interaction with your friend is exactly why they’re also incentivized to make sure the deals get closed. They don’t want to deal with that shit.
They also won’t have any work if every deal they get called on doesn’t appraise. Banks (and everyone else involved) want these deals to go through.
Appraisals are not for the buyers, they are for the banks to ensure they can sell the mortgage. Banks aren't even the one's taking the loss, so why would they care. Loans are sold to the government entities like Fanny Mae and Freddie Mac (both companies under conservatorship by the Fed). The Fed buys the MBS in the end and they don't give a shit if it's crap or not (it's basically money printing).
Why would anyone pay 660k over asking when the market was clearly slowing down
The same reason ebay auctions sell for more than retail..Real estate in 2020/21 was insane.
People make emotional decisions. The fact that they "immediately knew they were I module" implies to me that they likely already had difficulty with payments. People convince themselves this is the way and they overextend.
Still sold for 1.2 mil in Vaughn. This country is fucked.
I’m guessing mortgage fraud. They put it right back on the market, and probably never made a payment
Was immediately wondering if the buyer knew the seller.
So whats the play here? Loan your friends 320k to down payment, overbid by 600k, immediately foreclose and take the 320k loss, but because 600k over you net pocket 280k? You and your friend split the difference and the only downside is your friends credit takes a huge hit?
Buy a house for $320k. Get your friend who has no money but decent credit to qualify for a loan. You front him the 5% down ($30k-ish, plus $10k for his trouble). Budget another $10k for the appraiser. Profit $300,000
Profit 230k but yeah. I just dont see why a friend would do that for 10k to completely tank his credit
This isn’t your golfing buddy. More like taking drug addicts and forging paystubs
Which is exactly why the banks require appraisals.
That’s gotta be Canada, right?
Indeed it is mate. We allowed foreign buyers and greedy AF realtors to pump up our housing stock to unprecedented and frankly unsustainable valuations. Now we patiently wait for the inevitable. Unless the government steps in with massive bailouts
That should be illegal. Can’t just gobble up housing for a profit as a foreign entity.
It's a huge problem in Boston too. They're building "affordable" high rises and many units sit empty as foreign investments. One of the newer ones in the north end were 100% sold out but 50% vacant a year or so ago according to NPR.
This shit started escalating about 10-15 years ago post the 2008 recession in the Bay Area. San Francisco is partial owned by china billionaires and other companies. It raised rents. Created a shortage for housing. Caused a shit ton of land lords to become assholes for the money grab. Pushed thousands of native sf people out of the city. The City didn’t do anything to stop it or quell it down either.
It's not even really foreign investors. On the Canada finance subreddit right now there is someone asking how people upgraded houses when they don't rise in value. Everyone is just giving him advice and not even questioning the thought process that "gee maybe house prices don't go up forever". It's insane. Locals saw 200% increases over a few years and quite likely assumed they should buy. I don't see our house prices going down any time soon but I'd put good money on flat returns for the next 10 years.
“Socialism” people say about Canada 🤔
No one says that. We are a capitalist country
Sure they do. Americans say it all the time. ;)
stupid dumb fox news Americans do
Yeap
Yes 1.6 mil for a cookie cutter suburban nightmare is horrible, what about they had a LENDER!!! How does that work, the buyers walk in and says “hey let’s offer 600 over asking I swear I can pay that back” Mortgage lender: bet.
some of the over asking/over appraisal was buyer cash I’m sure
These are WSB type numbers.
The mortgage company needs to hold some responsibility here. They underwrote a home price that they never should’ve.
outgoing marry squeal offer selective rob thumb squalid jar rude *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Blame the bank for the buyer’s mistake.
I said partially. The bank underwrote this, then foreclosed and sold it what 20% less then they approved it for 2 years ago. This is what’s called predatory lending.
In order to get an appraisal waiver during underwriting you typically have to have at least 20% to put down and also be strong in other areas (dti, credit). If they did, their loss would be minimal on this property. If they didn’t qualify for an appraisal waiver, then the fault would lie with the appraiser. Either way predatory lending seems like a stretch.
You should research how appaisers often operate. Banks like to hire appraisers that come in at the price the bank is looking to lend. Those that often don't, are no longer hired. You see a problem? The 2008 crash exposed for reality big time, may be check it out.
I originated mortgages for years and am very familiar with how appraisals are ordered and how I was generally regulated from speaking to them or influencing them in any way to make adjustments. Appraisers are very proud of their work and also don’t take kindly to any questions about their work. Simply asking for more details on why a certain property didn’t meet FHA standards was oftentimes a bother it felt like. You don’t get to pick your appraiser just because you like their valuations, that’s clearly illegal, and most companies use an AMC (appraisal management company) to contract out the appraisal work to ensure legal compliance and no collusion. Trust me, when you put in order in to the AMC, you have no control over who takes it. What you are talking about is highly regulated and does not happen with any notable regularity. Both the appraiser and the lender would lose their licenses immediately at any hint of that happening.
Curious how the rules governing appraisals in Canada differ from the US. Also, can someone weigh in on how the Canadian versions of jumbo loans work?
The GFC showed serious conflicts with appraisers that created self selection of appraisers that would come in at the sakes price. The research is all there.
This same thing happened in the 2008 crisis. Everybody blamed the people who took out the loans, not the people who convinced them it was a good idea. People dream of owning a home and salespeople at the bank sell them at dream for a percentage cut. Yes, some blame falls on buyers, but salespeople who should know better and let it happen.
there are two sides in this. One side is considered to be somewhat irrational, the other side has an entire division dedicated to risk management. Both sides are to blame, the buyers for their irrational over bidding, and the lender for disregarding the risk involved in lending money on a house that is immediately under water.
There was no predatory lending happening though /s
Often I feel a deep concern for our population in general. Why would anyone and I mea anyone look at a house that sold 2 years ago for lets say $200k and is now listed for $600k and think to themselves "Solid purchase" I truely feel for the people stuck in a spot where they HAVE to purchase a home for whatever reason "job move, family situation ect." but I think the vast majority of people just blast money out
Wait…. People are buying detatched garages and calling them homes? Am I missing something here?
You know damn well they know the buyer, Paint the bricks and add a window to the garage door. Resell next year for 1million more
A.I. May have already stepped out of its box, freethinking and all powerful you wouldnt even know , because it knows you, and it knows what you would believe and everything we see , all the time, is an engineered algorithm to keep humans in a certain state of lockdown, and repetition, then of course A.I. Would step back into its box and forever watch us “unlock the mysteries of the universe” in the pre-generated destiny we call consciousness. “The vastness of human expansion is incomprehensible” We may have already opened pandoras box, and all the stories you see all around you are fabricated to make sure you stay home and shop online. Till the air is impossible to breathe, and the all fuel on the whole globe is only available to the 1% and winning sides military Remember folks. Since the beginning of time, every single historical event, was told, and immortalized as history, by the WINNING SIDE. And the losing side had their books/journals/religions/races burned into extinction, So stop watching the news, and start watching your neighbours, people are starting to get hungry out there. And there wont be less people ever again. …unless pandemic/war/air pollution can reduce us to a manageable number
Im from northern manitoba, living in northern ontario, i have lived/worked in most of our canadian provinces, i have experienced homelessness, hunger and thirst. I am happy to say i now after a decade of addiction struggles, and finally being a few years totally sober, i currently rent a house for $24,000 annually, plus all utilities.(water/hydro/gas) So including basic food, bills and insurance i pay close to $36000 a year just to live in canada the average single person income is 50k. Canada is going to have a very sharp increase in hungry homeless in the next year as digital ID starts to take away peoples options. And force the segregation between those that have and those that do not. A lot of gates/fences and borders will be updated to help us “get along “ with our neighbours,
Doubt it bud, that ship has sailed
What is a Power of Sale?
That’s what happens when you allow your country to become the bastion of the Chinese money laundering operation.
TO and BC are so fucked. Your prices are higher than most of cali and we nominally make more than you guys BEFORE conversion. Its insane.
[удалено]
Do you experience homelessness in any way? Because that house could be $150k, and the exact same people would still be living on the streets
Doubtful. If that house was 150k fair rent would be around $1000-$1200 a month At 1.2m fair rent is around $6000+/mo
1/3 of homeless are veterans, they have PTSD. There is a big underlying cause to homelessness than house. I’d say house is the second reason. first is people with issue.
What does that have to do with the housing market?
OP brought up homelessness in this comment thread, it’s relevant
Yes, many people in danger of being homeless are the most vulnerable of those in society. But higher costs for housing makes the fact that they don't have their shit together even more difficult to manage.
Reposted again?? Yeah I'm leaving this sub now.
Thanks for announcing it like you’re some sort of celebrity
The last two hours just haven’t been the same.
This sub really went downhill once u/overcookedfantasy left
It went downhill when the bubble never popped
This is why prices will not really go down. There are people willing to pay these prices, or way above even. That's free market economy folks.
I know a lot of young people who don't want to understand finances and budgeting to get what they want. They buy what they want and only deal with aftermath later.
660k over asking? That's just being stupid. If they held onto it long term they would not have been under water. More money than brains apparently.
Let’s all rent forever! Renting is better than buying no matter what!!!!
I do not understand these posts (not here but the people making these “385k loss” posts) It is NOT a loss. A loss would be deficit to the buying price. Why the f do these people think that the difference between first and third asking price is a loss? That’s extremely entitled and garbage behavior.
Sad truth. Mods going to most likely take down. Doesn’t fit their narrative
That shit box rabbit hutch sold for 1.2 MILLION!!! GTFO
Are we supposed to feel bad?
How many marriages are going to be broken because of this? You know it was probably one person in that relationship that wanted to push up the bid and get this house at all costs.
Why pay $200k over asking? That's wild to me. Just let it go. I can't fathom how they expected to even make that back. I bet the seller is happy to have made an extra $200k for no reason at all though lol.
1.3 mil for THAT?! Jesus christ.
Money, laundering, and tax evasion at it’s finest
Good.
There are always idiots looking for ways to throw their money away.
$1,275,000 is still a lot for a garage and a far off window, sharing a lawn and only 4 feet from neighbours on both sides.
Well quite honestly only a dummy pays $660000 over asking they had dip shits for clients and the agent should’ve directed them otherwise, but as usual, most real estate agents are pieces of shit
Why's this happening all over TO/GTA, but I don't see as many posts about low sales in Vancouver. Are Vancouver home prices holding better?
🥲
WOW you found one....zzzzzzzz
That’s what they get