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Condo developer paying people to stand in line??

Source: http://www.greaterfool.ca/2011/02/16/2020-2/

Quote:

http://www.youtube.com/watch?v=GACrYXDYEsw

"Well, this was predictable.

Days ago I reprinted a Craigslist ad offering to pay people to line up outside the sales office of a new condo development in Burnaby. “We need people to hold spots and line up for a new condo project located in Burnaby (Kingsway/Willingdon Ave),” it said. “Line up may start as early as weds/thurs night. Grand opening is Saturday February 19, 2011. Warm beverages and washrooms will be provided by the developer. Shifts are determined on how long you would like to stay. (preferably 8 hours+) Get paid cash quickly for sitting in a line up!”

This, of course, is reprehensible. False advertising, meant to misled people and create an untruthful situation. Until, of course, illusion becomes reality. That apparently happened last night when a TV crew from Global showed up, and footage hit the air of anxious buyers ready to mob the latest dream building. By Saturday morning this charade may actually have created demand in Canada’s most delusional market.

Jen works nearby. This is her report:

“When I went to work Tuesday morning I noticed a bunch of people at the empty lot and wondered what was up. Through the morning, the crowd/lineup grew. At noon, I noticed the porta-potty in a parking lot behind an adjacent building. An hour later it was gone (I kinda wonder if we should call the employment standards people – after all, I think it was in the job offer). The line grew by 50% from what was there at 9:30, so at 2:45 when I left, the lineup stretched beyond the length of the adjacent building. By 4, they were erecting tents (like very nice party tents - fully enclosed) for the people in the lineup exposed to the rain. When I went back to work at 8 there were flood lights for the people now in the tents. And alas, when I left at 10, the floodlights were extinguished, but several police cruisers were in attendance

“A co-worker went out and spoke to the people in the lineup at lunch. When asked what they were in the lineup for, the first two people in line didn’t know. A little further down the line, someone said they were waiting to buy a condo. When asked if one of them were going to buy a condo, the guy said no, but his friend beside him was going to buy one. Asked if they were getting paid to stand in line….answer…no! Upon leaving the project with a loud comment from my co-worker “hope you guys are getting paid well for this”, the answer from one “not bad, not bad”.

“I’m horrified and can’t believe that we live in such a society. But from 15 floors across the road, it’s very entertaining! And…there is the possibility of snow on Thursday night or Friday! I think I might try to sell coffee at an inflated price.”

Okay, same Bat Channel, different Bat City. In Toronto another blog dog reports on a mortgage just handed to his friend by one of the country’s Big Five chartered banks. You know the ones – the global leaders in responsible lending, guardians of an impeccable financial system that would never, ever allow the kind of deadbeat McMansions-for-Oakies loans that lead to the seminal collapse of the US housing market.

Or not.

“My colleague just got a loan approved for $400,000 from one of the top 5 banks. He has s 5 % downpayment (around 20,000). He’s not even on a company payroll but on a contract. No real job prior to joining our company. Wife is in a retail job of $12 an hour. Above all: will complete 2 years in the country in Sep 2011. What the lending standards the bank has followed here I fail to understand.”

No steady job. No employment security. Minimal downpayment. Uncertain credit history. And yet rubber stamped for 95% financing. At teaser rates destined to reset far higher. How, exactly, is this different from the sub-prime mentality which facilitated the demise of real estate to the south?

Well, one difference is that in the States these days they’re far more conservative than we crazed beavs.

While Ottawa endorses and supports home purchases with just 5% down, the Obama administration is calling for minimum downpayments to be 10% before qualifying for mortgage insurance.

http://www.greaterfool.ca/wp-content...11/02/DOWN.jpg

But that hardly matters. In nine of the biggest American cities the average down on a house is now 22% – a number which has doubled in the last three years. This is also three times the average downpayment in Canada right now, which CMHC estimates is running at just 7%.

And who’s driving this trend towards more prudent lending standards? Here’s how the Wall Street Journal put it:

“The move to force home buyers to lay out more cash is driven mostly by banks, who have found that larger down payments discourage delinquencies by increasing the buyers’ exposure to loss and reducing the impact of declining prices. Many home buyers placed little, if anything, down during the boom.”

It’s also interesting to note while buyers here can get 100% financing, and purchase houses with zero money – thanks to those cash-back mortgages at some of our big, conservative, prudent banks – this is impossible in the US. The only exceptions are for military veterans or rural residents, where government programs allow for no equity. In Canada you just need to be a bank customer, and fog a mirror.

The point of this post, therefore, is to be fooled not by illusion.

The condomaniacs you see lining up, desperate to grab an imaginary unit in an unbuilt building, may be as phoney as the developer’s moral compass. The buyers of houses selling for near half a million may be two paycheques from oblivion. And the bankers in towers of granite and gold may give us our own Madoff moment."

I am basically posting this as a response to the "Realtors of Mainland Chinese Using Helicopters to Buy!" Which IMO was another attempt on behalf of the media to hype real estate.

I can't help but point this sort of thing out, everyone is always so quick to believe what the media feeds them, it's a shame that advetising dollars trumps ethics. Both of these news bits were on Global and less than a week apart.

Thoughts anyone?

EDIT** http://vreaa.wordpress.com/2011/02/1...al-tv-and-cbc/

Sounds like some other people figured out this was a setup.

I want this scandal exposed more and more. Shame on them for screwing with people's mind.

Quote:

Originally Posted by Gnomes (Post 7308846)

I want this scandal exposed more and more. Shame on them for screwing with people's mind.

Well what's worse...

-Media not following a fairly basic code of eithics?
-Real estate promoting false consumer sentiment? (And they call themselves professionals/advisors???)
-Consumers not taking the time to educate themselves

So that's what i saw.... i was wondering what the fuck those morons were doing even asked in rs chat about it; if it wasn't for the global story though you'd have no idea why they were outside

reminds me of this thing i read in the 50 laws of power

i dont see anything unethical about creating a buzz for your product with employees - companies that make all your favorite products do it all the time for pr. if that makes u buy ur problem. its capitalism man. as for banks pulling shit, i do agree they have some responsibility. ane consumers need to be less retarded. but the realtors' job is to market and sell - absolutely nothing wrong with paying ppl to line up wtf
Posted via RS Mobile

Quote:

Originally Posted by jasonturbo (Post 7308848)

Well what's worse...

-Media not following a fairly basic code of eithics?
-Real estate promoting false consumer sentiment? (And they call themselves professionals/advisors???)
-Consumers not taking the time to educate themselves

Its only the biggest purchase of their life, right?

I see people put more effort into researching what shoes to buy. Sad statement about society.

Quote:

Originally Posted by drunkrussian (Post 7308893)

i dont see anything unethical about creating a buzz for your product with employees - companies that make all your favorite products do it all the time for pr. if that makes u buy ur problem. its capitalism man. as for banks pulling shit, i do agree they have some responsibility. ane consumers need to be less retarded. but the realtors' job is to market and sell - absolutely nothing wrong with paying ppl to line up wtf
Posted via RS Mobile

First, let me say Realtors don't pay people to line up, Developers do.

Second, CREA has an entire section on ethics, and that's why many choose a Realtor cause it is someone they can trust. Hell they run commercials stating this too. Yet Realtors pull similar stunts, thus the CREA ethics is just a bunch of BS.

Quote:

Originally Posted by drunkrussian (Post 7308893)

I agree with a lot of what you are saying with regards to the position of the realtors and developers. The consumer is responsible for their own actions, no one else.

What I don't agree with, is the media's role, most people believe media outlets like Global News maintain an impartial-third-party position on all matters ... where in this case, they are showing you what their paying customers want you to see.

The real story should be an expose on the financial relationship between a developer with a good marketing team, and an unethical media outlet. If my favorite news channel is using their income stream to determine my news about the condo market, then what else are they telling me that isn't accurate based on internal financial matters.

These people call themselves reporters and journalists... but they can't "figure out" people are being paid to stand in line hahaha. What a joke.

My favourite local blog tracks sales and listings: http://vancouvercondo.info/

Feb is on pace to:
- crush every other Feb for the past decade for active listings
- below average sales at best
- 2nd lowest sales/list ratio in a decade

What does this mean?
- sales should be much higher considering the people that are supposedly rushing to beat the Mar 35-30yr amortization change
- either people are rushing to sell to beat the deadline OR the inventory taken off the market last year is being put back on since spring is the strongest market to sell. Wait for the listings in Mar after the deadline passes. If listings continue to grow at a ridiculous pace, then it is inventory that was taken off the market being put back on.
- this is the 6th month of bad numbers. Not terribly bad numbers, yet definitely not good numbers. There's been no improvement, so either we're heading to flat numbers for a long time, or the snowball is about to pickup momentum down the hill.

Im glad i listed my apartment last month rather than sep 2010. Was gonna list for 339k last year but waited til jan and listed for 349k and sold 6days later for 355k. :)
Posted via RS Mobile

Quote:

Originally Posted by True.True (Post 7308969)

Im glad i listed my apartment last month rather than sep 2010. Was gonna list for 339k last year but waited til jan and listed for 349k and sold 6days later for 355k. :)
Posted via RS Mobile

Nice! I am definitely torn on whether or not to list mine right now or wait until the spring. I feel like there should be more people right now jumping on low interest rates and avoiding the 35 to 30 amortization period rule change.

Like Taylor said it is not happening. I am watching the condo market in Victoria and sales are very slow.

Looks like people have contacted Global. It will be interesting to see if they do a follow up on the story... I won't hold my breath

Quote:

Originally Posted by AME_VIP (Post 7309068)

You might as well list it now, if it takes 2 weeks or 6 months to sell it doesnt affect what you pay the realtor.

Sure people will tell you number of days on the market is a neg. factor in selling a property but that's realtor talk for "drop the price so it will sell and I get my commision" After all, if you sell for 5% less than asking, it barely affects what the realtor makes, and consider the more propertys they sell the better, so their best interest is quantity (7% on first 100k, 3% there after is common). If you're asking 20k too much and they show your house 100 times the ratio of time invested showing house to profit is a not nearly as good if they get you to settle on a lower price and the house sells for 20k less and it only takes 5 showings etc.

With typical commision, the difference between 520k and 480k (Lets say market value is 500k) is only 2000$ in commision roughly, so take that another step further and figure that bewteen the brokerage, the other realtor (the buyers realtor), you are only really going to see 1/3rd of the overall commision. So if you get 40k less for a house, you as the realtor only lose 666$. Imagine how much faster a house sells when it's 40k less than comparables,... pretty quick.

Another reason why realtors "can be" scumbags.

** Feel free to subsitute "can be" for "are"
*** Disclaimer: I had to write this fast so hopefully it makes sense hahaha

Quote:

Originally Posted by AME_VIP (Post 7309068)

Why do you feel there should be more people jumping on low interest rates and prior to the rule changes? Serious question, the market is ruled by emotion so it is important to understand why people think this way.

In my opinion the rule changes don't affect FTBs very much right now, thus why sales have not picked up with the pending rule changes. Why do I feel this way?

From the stats, it seems first-time buyers were already sitting on the sidelines for the past 6 months. The stats show that sales of lower end units has fallen off dramatically, while mid-higher end units still sell well. This is why prices haves remained high or moved higher, since only averages are reported and less entry priced units being sold skews the prices higher.

I feel FTBs are sitting on the sidelines cause either they cannot afford a place, or are paying attention to the negative media and waiting. We're at > 70% ownership levels and back to 2008 peak prices - there's not en endless supply of people that can afford that to keep ownership levels rising.

---

If I were you I would list now and hope for a sale before the end of spring. If listings continue at this pace, or the pace picks up, unless your condo stands out from the pack in pricing or features it may sit.

I don't even know how buyers could possibly choose at this point. Just in the 20 square blocks around my condo there are > 10 2bdrm condos $500-550K with very similar features. Some areas downtown/west end/FC have more than that in 2 square blocks.

:duh: Maybe someone should tell all those people about MLS.ca lol If they only knew there was thousands of other condo's for sale they wouldn't have to wait in line!

Oh wait, they are paid actors lol silly me.

I dont like MLS.ca - the format of it isnt very easy to navigate through. Pretty messy IMO. And it's a shame presales arent listed in MLS.

Quote:

Originally Posted by Gnomes (Post 7309395)

And it's a shame presales arent listed in MLS.

Why? They can cost even more cause CREA would then get a cut.

Quote:

Canadian Association of Broadcasters'

Code of Ethics (Revised June 2002)

Clause 5 - News

(1) It shall be the responsibility of broadcasters to ensure that news shall be represented with accuracy and without bias. Broadcasters shall satisfy themselves that the arrangements made for obtaining news ensure this result. They shall also ensure that news broadcasts are not editorial.
(2) News shall not be selected for the purpose of furthering or hindering either side of any controversial public issue, nor shall it be formulated on the basis of the beliefs, opinions or desires of management, the editor or others engaged in its preparation or delivery. The fundamental purpose of news dissemination in a democracy is to enable people to know what is happening, and to understand events so that they may form their own conclusions.
(3) Nothing in the foregoing shall be understood as preventing broadcasters from analyzing and elucidating news so long as such analysis or comment is clearly labeled as such and kept distinct from regular news presentations. Broadcasters are also entitled to provide editorial opinion, which shall be clearly labeled as such and kept entirely distinct from regular broadcasts of news or analysis.
(4) Broadcasters shall refer to the Code of Ethics of the Radio and Television News Directors of Canada ("RTNDA") for more detailed provisions regarding broadcast journalism in general and to the Voluntary Code Regarding Violence in Television Programming for guidance with respect to the depiction of violence, graphic reporting of delicate subject matter or the use of explicit language in news and public affairs programming on television.

Clause 6 - Full, Fair and Proper Presentation

It is recognized that the full, fair and proper presentation of news, opinion, comment and editorial is the prime and fundamental responsibility of each broadcaster. This principle shall apply to all radio and television programming, whether it relates to news, public affairs, magazine, talk, call-in, interview or other broadcasting formats in which news, opinion, comment or editorial may be expressed by broadcaster employees, their invited guests or callers.

I also looked into the CREA realtor code of ethics but it's pretty much a joke, the only section which could even be considered relavent...

Quote:

As REALTORS®, we accept a personal obligation to the public and
to our profession. The Code of Ethics of The Canadian Real Estate
Association embodies these obligations.
As REALTORS®, we are committed to:
• Professional competent service
• Absolute honesty and integrity in business dealings
• Co-operation with and fairness to all
• Personal accountability through compliance
with CREA’s Standards of Business Practice.
To meet their obligations, REALTORS® pledge to observe the spirit
of the Code in all of their activities and conduct their business in
accordance with the Standards of Business Practice and the Golden
Rule — Do unto others as you would have them do unto you.

Golden rule my ass.

EDIT** Now I just have to find the "Honest used car salesman code of ethics" for a comparisson.

JasonTurbo,

Please prove and provide all materials/information that you think it was the media or developer hyping the pre-sale of the condo project.

I would really love what you and all the other speculators out there have to say.

Quote:

Originally Posted by dealt (Post 7309606)

JasonTurbo,

Please prove and provide all materials/information that you think it was the media or developer hyping the pre-sale of the condo project.

"It is difficult to get a man to understand something when his salary depends upon his not understanding it."
-Upton Sinclair

You're employed in real estate... why don't you make light of the situation for us? And being that your income is directly affected by something like this, I'm sure you'll provide an unbiased opinion.

I didn't realize the demand for condo's was so crazy here... especially after the olympic village fiasco.

http://vreaa.wordpress.com/2011/02/1...al-tv-and-cbc/

Hahahaha, well done by the Realtor on that one. I would hire them.

They're direct marketers, their only job is to sell sell sell.

Quote:

Originally Posted by dealt (Post 7309606)

Its hard when the craigslist posts are deleted.

Reminds me of clubs in France and Italy. They hire models/attractive actors to chill in their club.

Rent-a-crowd is nothing new but the key is not to get caught.