Category Archives: #mortgagesmadesimple

Real estate market uncertainty is forcing appraisers to take a second look

The potential for rapidly dropping prices in southern Ontario is forcing appraisers to have a second look at properties they have already assessed to see how much the market has shifted.

Claudio Polito, a Toronto appraiser and principal owner of Cross-town Appraisal Ltd., says lenders basing mortgage decisions on value, as opposed to income and credit history, are really trying to stay on top of a market that appears to be changing rapidly.

By his estimates, prices in the Greater Toronto Area have dropped anywhere from five per cent to 15 per cent over the last 30 days. The next set of statistics from the Toronto Real Estate Board are due out Monday and will mark the first full month of data since provincial changes to cool the market that included a tax on foreign buyers.

“Lenders I deal with they want to know if your property is still worth $1 million if they are loaning you say $650,000,” said Polito. “They don’t base it on anything else. We have to be precise because it’s not a bank, (smaller lenders) can’t afford to lose a dollar.”

 

It wouldn’t be the first time, appraisals have lagged purchases prices — a phenomenon that previously caught some Vancouver buyers by surprise when it was time to close.

A lower appraisal could increasingly be an issue for people with previous deals, not yet closed, in Toronto, especially when buyers are coming up with only the minimum 20 per cent down payment for a non-government backed loan.

If you buy a home for $1 million with $200,000 down, you need an $800,000 loan to close. But if your appraisal comes in at $900,000, your financial institution will only agree to a maximum $720,000 loan based on 80 per cent debt to 20 per cent equity. Those buyers are left searching for a second mortgage — at a higher rate — to get the extra $80,000 if they can find someone to loan them the money.

“We are seeing some people walk away from deals,” said Polito, because they can’t close — a move that comes with myriad problems if the sellers seek legal damages. “What we are seeing is properties sold in January and February, values are still there but if it sold in March, it is very hard to support the value.” Toronto prices rose 33 per cent in March from a year earlier.

 

Keith Lancastle, chief executive of the Appraisal Institute of Canada, said the warning for buyers is probably not to get into bidding wars if they don’t have a cushion to come up with a higher down payment. “I would expect it’s quite routine where the appraisals are being done and it’s coming in at lower than people hoped to see.”

He says the volume of sale in Toronto makes it easier to find comparable sales but the pace at which the market is changing makes it “tough to keep up” and that forces appraisers to look at some data and consider whether it’s an anomaly or part of trend.

A more difficult market to assess is one like Calgary, which has seen transactions drying up, making comparisons hard to find.

“The more valid data you have access to, the simpler the task of preparing the appraisal becomes,” said Lancastle. “When the Calgary market was slow, the lender would say we want sales that are within the last 90 days for comparable. If nothing has sold for comparable for 90 days, you ask the lender if they want to extend the time or the geographic window.”

Nicole Wells, vice-president of home equity financing at Royal Bank of Canada, said her institution is relatively conservative when it comes to appraisals to begin with — limiting the impact of a shifting market.

“Given how quickly prices rise, you really have to make sure you are adequately appraising the property,” said Wells. “We always promote affordability, making sure you know what you want and what you can pay. It’s really dangerous to get into a bidding war (with the minimum down payment).”

Source: Financial Post – Garry Marr | June 1, 2017 

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When planning home improvements, finding a reliable contractor is an important first step

Hiring the right contractor can make all the difference when renovating your home

Skyrocketing Toronto real estate prices are motivating many existing homeowners to improve their homes, rather than replace them. “We’re seeing a big trend to add value to homes through renovations and to increase living space by building ‘up or out,’” said Kris Potts, president of Toronto’s Norseman Construction & Development. “In doing so, existing homeowners are achieving the living space improvements they would normally seek by moving to another home, but at a much lower cost.”

Whether the homeowner’s goal is to add living space by ‘building up or out’ or just to bring kitchens, bathrooms, and other rooms up to 2017 standards, their biggest challenge is often finding a contractor who can be trusted to do the job right; on time and on budget.

With an impressive 83 per cent score on the consumer rating site HomeStars.com, Norseman Construction & Development is one such contractor. Established in 2005, this family-owned-and-operated company listens to its customers throughout the design and build process; keeping them constantly informed about their project’s progress until it is completed, and each customer has received exactly what they asked for.

“We do our best to take each homeowner’s vision and make it a reality, ensuring that the finished product exceeds their expectations,” said Potts. “We do this by keeping on top of the perpetual advancements in the field, and by addressing the constantly changing needs of local homeowners. Add Norseman’s wealth of experience, superior workmanship and unparalleled attention to detail, and we are able to provide our customers with innovative solutions, competitive pricing and timely results on all their home improvement projects.”

Norseman’s attention to customer needs starts with the company’s consultation process. “Book an appointment on our website, and one of our skilled estimators will come to your home to provide a free quotation on whatever you have in mind,” said Kevin Potts, Norseman’s Operations Manager. “We will do our best to come up with a plan that not only meets your needs, but also fits within your budget and schedule.”

Once the home improvement project is underway, Norseman keeps customers ‘in the loop’ about the project’s progress on a daily basis. “Our people use a program called Buildertrend to upload status reports and photos of each day’s work,” Kevin Potts said. “Our homeowners can log into it as often as they wish to see firsthand how their build is going, and to get answers to any questions they may have.”

“Today’s homeowner is very savvy, thanks to all the home improvement shows on TV,” said Becky Potts, Norseman’s Marketing Manager. “Here at Norseman, we respect this level of awareness by giving homeowners open access to information about their projects at all times. Check out our Facebook, Instagram, and Twitter pages, and you will see our customer-first values in action!”

‘Customer-first values’ is a phrase that means something at Norseman Construction & Development. It is why this contractor provides a two-year warranty on its work – many other contractors only provide a year’s coverage.

It is also why the Potts family insists on alerting customers to project-related issues should they occur. All construction projects carry with them some element of the unknown. Opening walls or floors can bring to light new information not present at the project’s beginning. “Setbacks happen,” said Kris Potts. “When they do, we tell the customer about them upfront, and we fix them in consultation with the customer.”

As well, customer-first values drive Norseman’s approach to its skilled tradespeople. “Unlike some other contractors who are focussed on profits first, Norseman treats its trades fairly,” said Kevin Potts. “In return, we inspire loyalty in the most skilled tradespeople in the industry. The payoff is the best quality work on our customers’ homes.”

That’s not all: Norseman invests money and time in ‘giving back’ to the GTA community. Its charitable efforts include underwriting the annual free Messiah for the City Christmas concert for clients and staff of the United Way. This much-loved music is performed by the Toronto Beach Chorale and members of the Toronto Symphony Orchestra. Norseman also supports Habitat for Humanity, which aids low-income families in attaining affordable housing; serves hot meals at the Scott Mission, and funds numerous local sports and charity events in the GTA.

“The way we treat our customers and our community underscore what Norseman Construction & Development stands for,” concluded Kris Potts. “When you hire us for your home improvement project, you will receive quality-oriented, customer-focussed service from a stable firm that truly puts you first, and who cares about the community we all live in.”

For more information about Norseman & Construction & Development, visit their website or connect on Facebook.

This story was created by Content Works, Postmedia’s commercial content division, on behalf of Norseman Construction.

Source: National Post

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Ontario’s 16 new housing measures

Houses are seen in a suburb located north of Toronto in Vaughan, Canada, June 29, 2015.

The Ontario government has announced what it calls a comprehensive housing package aimed at cooling a red-hot real estate market on Thursday. Here are the 16 proposed measures:

  • A 15-per-cent non-resident speculation tax to be imposed on buyers in the Greater Golden Horseshoe area who are not citizens, permanent residents or Canadian corporations.
  • Expanded rent control that will apply to all private rental units in Ontario, including those built after 1991, which are currently excluded.
  • Updates to the Residential Tenancies Act to include a standard lease agreement, tighter provisions for “landlord’s own use” evictions, and technical changes to the Landlord-Tenant Board meant to make the process fairer, as well as other changes.
  • A program to leverage the value of surplus provincial land assets across the province to develop a mix of market-price housing and affordable housing.
  • Legislation that would allow Toronto and possibly other municipalities to introduce a vacant homes property tax in an effort to encourage property owners to sell unoccupied units or rent them out.
  • A plan to ensure property tax for new apartment buildings is charged at a similar rate as other residential properties.
  • A five-year, $125-million program aimed at encouraging the construction of new rental apartment buildings by rebating a portion of development charges.
  • More flexibility for municipalities when it comes to using property tax tools to encourage development.
  • The creation of a new Housing Supply Team with dedicated provincial employees to identify barriers to specific housing development projects and work with developers and municipalities to find solutions.
  • An effort to understand and tackle practices that may be contributing to tax avoidance and excessive speculation in the housing market.
  • A review of the rules real estate agents are required to follow to ensure that consumers are fairly represented in real estate transactions.
  • The launch of a housing advisory group which will meet quarterly to provide the government with ongoing advice about the state of the housing market and discuss the impact of the measures and any additional steps that are needed
  • Education for consumers on their rights, particularly on the issue of one real estate professional representing more than one party in a real estate transaction.
  • A partnership with the Canada Revenue Agency to explore more comprehensive reporting requirements so that correct federal and provincial taxes, including income and sales taxes, are paid on purchases and sales of real estate in Ontario.
  • Set timelines for elevator repairs to be established in consultation with the sector and the Technical Standards & Safety Authority.
  • Provisions that would require municipalities to consider the appropriate range of unit sizes in higher density residential buildings to accommodate a diverse range of household sizes and incomes, among other things.

Source: The Canadian Press – April 20, 2017

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Liberal budget released: These are the housing related promises

Liberal budget released: These are the housing related promises

Cities and affordable housing providers will find themselves with $11.2 billion more to spend on new and existing units over the coming decade, as part of the federal government’s multi-pronged push to help people find homes.

Of that money, which comes from the government’s social infrastructure fund, $5 billion will be allotted to encourage housing providers to pool resources with private partners and to allow the Canada Mortgage and Housing Corp., to provide more direct loans to cities.

The funding falls short of the $12.6 billion the mayors of Canada’s biggest cities requested last year and Wednesday’s federal budget shows that the majority of the $11.2 billion isn’t slated to be spent until after 2022.

Over the next 11 years, the Liberals pledged $202 million to free up more federal land for affordable housing projects, $300 million for housing in the North and $225 million to support programs that provide units to indigenous peoples off reserve.

The money, coupled with $2.1 billion for homelessness initiatives over the next 11 years, sets the financial backbone for the Liberals’ promised national housing strategy that will be released in the coming months. The document will outline how the government plans to help people find affordable housing that meets their needs, and ensure a robust emergency shelter and transitional housing system for those who need it.

Finance Minister Bill Morneau told reporters the spending will make a difference for those who rely on social housing. He said the Liberals want to ensure cities can access funds as quickly as possible to make necessary investments in the country’s stock of aging affordable housing.

Liberal budget released: These are the housing related promises

The details are among many laid out in the budget, which outlines how the government plans to spend the $81 billion it is making available between now and 2028 to address future infrastructure needs and, the government hopes, boost the economy to create new jobs and government revenues.

It also gives $39.9 million over five years for Statistics Canada to create a national database of every property in Canada. This will include up-to-date information on sales, the degree of foreign ownership and homeowner demographics and finances to answer lingering questions about the skyrocketing cost of housing that may squeeze middle-class buyers out of the market.

The Liberals clearly see a need to attract private investors to help pay for infrastructure projects, including affordable housing, given the federal government’s tight fiscal position.

At the centre of that push is a proposed new infrastructure bank that would use public dollars to leverage private investment in three key areas: trade corridors, green infrastructure and public transit.

The government is setting aside $15 billion in cash for the bank, split evenly between each of the aforementioned funding streams, with spending set to start as early as the next fiscal year on projects based on budget projections.

Morneau said that the government wants to have the bank up and running this year, including having some projects that will be identified for investors.

But the budget document again projects that the majority of the bank’s spending won’t happen until after 2022. And in the case of trade corridor infrastructure, spending isn’t expected to start until 2020, even though some experts argue this stream would give the country the biggest economic bump.

The Liberals are also tweaking how much of the bill it will cover for municipal projects under the second phase of its infrastructure plan in order to nudge provinces to pony up more money for work and to prod cities to consider using the bank for projects that could generate revenue, like transit systems.

The government will cover up to 40 per cent of municipal projects under the upcoming phase of its infrastructure plan, 50 per cent for provincial projects and 75 per cent for indigenous projects.

Source:  The Canadian Press 22 Mar 2017

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Solving the enigma of Canada’s housing bubble

A real estate sold sign hangs in front of a west-end Toronto property Friday, Nov. 4, 2016. THE CANADIAN PRESS/Graeme Roy (Graeme Roy/THE CANADIAN PRESS)

If Yogi Berra were alive today, he’d probably describe the Toronto housing market like this: Things are so good, they’re bad. And if they get any better, that’ll be worse.

In February, the Teranet-National Bank house price index showed prices in Greater Toronto rising 23 per cent over the previous year – or about 21 per cent faster than the rate of inflation. Homes in neighbouring Hamilton were up 19.7 per cent. Even in Metro Vancouver, long the hottest market but which recent policy changes have somewhat cooled, prices are up 14.3 per cent. Most of the rest of the country, however, looks relatively calm.

But not Toronto. It’s become such a sellers’ market that – another Berraism – nobody wants to sell.

In response to surging demand, the number of properties offered for sale has dropped. Potential sellers are holding off putting houses and condos on the market, because they assume the longer they wait, the higher prices will go.

“In the first two months of 2017,” writes Simon Fraser University public-policy professor Josh Gordon in a recent report on Toronto housing, “new listings dropped despite rapidly rising prices, likely because even more sellers now expect prices to climb higher. That has sent the sales-to-new-listing ratio soaring, which is a good proximate indicator for future house price increases.”

In other words, prices in Toronto appear to be feeding on themselves. Why? It’s the psychology of FOMO – the fear of missing out. Purchasers fear that, unless they buy now, they’ll miss out on ever owning a home. Potential sellers fear that, if they sell now, they’ll miss out on windfall profits from inevitable price jumps. Based on the past few years, these have become rationally held beliefs. Speculation is now wisdom.

If you’re already a homeowner, it’s wonderful. If you’re a young person, an immigrant or middle-class, it’s depressing. If you’re an economist or a banking regulator, it’s terrifying.

Toronto has long shown signs of a classic bubble, and so has Vancouver. And when housing bubbles burst, they send tsunamis rushing through the financial system, and the entire economy. Just look at what happened in the United States in 2008.

That’s the danger. And the best way to address it is to try to carefully let some air out, before the balloon pops.

A real estate sold sign hangs in front of a west-end Toronto property Friday, Nov. 4, 2016. THE CANADIAN PRESS/Graeme Roy (Graeme Roy/THE CANADIAN PRESS)

So what’s been driving prices in Toronto and Vancouver? A lot of things – some of which can’t be changed, or shouldn’t be.

There are the Bank of Canada’s record low short-term interest rates, a response to weak domestic and global economic conditions. Should Ottawa be agitating for higher borrowing costs, across the entire economy? Obviously not.

The Bank itself is also reflecting a worldwide savings glut, which has pushed global bond yields and mortgage rates to the floor, while pushing up the value of a lot of investment assets. Can Ottawa or the provinces address that? Not really.

Some of the price increases are a reflection of population growth, with the Greater Toronto Area adding nearly 400,000 people between 2011 and 2016, and Greater Vancouver growing by 150,000. Should government policy aim to stop people from moving to these successful cities? Absolutely not.

However, housing in Toronto and Vancouver has also been driven skyward by other factors. Greater Montreal, Canada’s second-largest market, has the same low interest rates, and over the last five years, it’s added twice as many people as Vancouver. But Montreal prices have not been bubbling.

The price boom in Toronto and Vancouver has been far beyond what population and income growth would suggest. For example, there tends to be a long-run relationship between average incomes and average housing prices. That’s because, as Yogi Berra might have put it, people can’t afford what they can’t afford – except when they can. In Toronto and Vancouver, the unaffordable is now the norm.

Average home prices are normally expected to be about three times median family incomes. As of last summer, that’s roughly where things were in Montreal, Ottawa and Calgary. But in Toronto, prices were more than eight times family income. Vancouver? Nearly 12.

Last year, the situation finally pushed British Columbia to act. The government introduced a 15 per cent tax on foreign buyers, which appears to have had an impact. Vancouver prices actually dipped late last year, reversing steep gains earlier in 2016.

The levy, which doesn’t apply to immigrants, had a dual effect. It discouraged non-resident speculators, while also signalling to the entire market that prices might not go up forever.

(Unfortunately, B.C. recently undermined the measure, by watering down its application, and creating a price-inflating program of interest-free loans for first-time homebuyers.)

Ontario Finance Minister Charles Sousa is now also musing about a foreign-buyers tax for Toronto. As in Vancouver, it might calm the market, and it’s hard to see how it could hurt. Non-resident investors are likely only a small part of the picture – the data is still poor – but they may be having a significant impact on prices and psychology.

Economists keep sounding alarms about a Canadian housing bubble; the latest comes from the Bank of International Settlements. A popped bubble will harm the entire country, but the entire country is not in a bubble. There’s no need for a national plan to throw cold water on buyers from Halifax to Ottawa to Edmonton. Policy has to go after the problem where it makes its home, in Southern Ontario and B.C.’s Lower Mainland.

Source: The Globe and Mail – Published Friday, Mar. 17, 2017

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How to choose the right home for your budget

how-to-choose-the-right-home-for-your-budget

As a first-time homebuyer, affordability is an important factor when purchasing the right home. Wondering how to find the right home for your budget? Try our three-step plan for determining how much home you can afford, so you can choose – and successfully close on – the right home for your lifestyle and price point.

 

Step 1: Dream it 

It’s easy to get caught up in other people’s ideas of the perfect starter home – design magazines and TV programs sell you on what’s hot now. Ignore the hype and sit down to itemize what’s most crucial to you and your family. Make a list of your top priorities, so you can find the right home for your budget.

Here are some key issues to consider.

Transportation

Do you need easy access to public transportation? Is dedicated parking for your car essential, or will street parking suffice? Would a secure bike locker be crucial to your commute

Recreation

Do you need a walkable park for your kids or dog? Would an on-site gym help you manage your hectic schedule?

Space

How many bedrooms do you need now? What about three to five years from now? (That is, is a baby on the horizon?) Do you need a home office for your side gig? Is a big, open-plan main floor essential, given your high-volume entertaining?

Lifestyle

Do you have the time and inclination to sacrifice hours each week to maintain a house and yard? Would you rather come home after work to a turnkey property each night? Do you want a condo with all the amenities, or would you sacrifice bells and whistles for a lower maintenance fee?

Can’t find the perfect home?Why not build yourself? Build a custom home and finance it with as little as 5% down. Find out how

Look over your list and differentiate between the must-haves and the nice-to-haves. Chances are, you might not find your entire wish list on a starter-home budget, so it’s important to know your priorities.

Step 2: Crunch some numbers

Just as important as knowing what you need in a first home is knowing what you can afford. Price dictates not only how much home you can buy but also what neighbourhoods you should be looking in.

Sit down with your partner to assess your income, debts, savings and investments, so you can anticipate how much money will be available for a down payment, and how much you can afford to pay each month in home carrying costs (mortgage payments, taxes, heating, etc.).

how-to-choose-the-right-home-for-your-budget

Work out the monthly budget you’ll need to cover your responsibilities as a new homeowner, and start living on it now, so you can see how sustainable it is. If you find that it’s cramping your lifestyle, you will have to reassess whether homeownership is right for you, or consider a lower-priced home. 

Step 3: Assemble your real estate pros 

Once you’re ready to buy, build your real estate team: a REALTOR® or real estate agent, a mortgage specialist, a home inspector and a real estate lawyer (or notary, in Quebec). These are the pros you’ll count on to get you the keys to the right home for your budget.

Your first point person is your REALTOR® or real estate agent. Be forthright about your priorities and budget, as well as the neighbourhoods you’d like to live in. A REALTOR®’s insights are priceless, especially as they pertain to affordability. BONUS: A good REALTOR® will have the inside scoop on up-and-coming neighbourhoods that offer more bang for your homebuying buck.

The mortgage specialist is your next priority because mortgage pre-approval is essential in today’s real estate market. While it’s useful to attend open houses and check listings beforehand, most sellers won’t consider offers from potential buyers without pre-approval. Your mortgage broker will also have real-world insights into affordability, so tap into that resource early.

Next, have that home inspector on speed dial to ensure that any home you make an offer on is a home you can afford – without any major hidden costs (such as faulty wiring, asbestos or termite damage in need of remediation).

Finally, a real estate lawyer (or a notary, in Quebec) will ensure that things run smoothly with your real estate transaction, including researching the title, checking whether there are liens against the property, and verifying the accuracy of legal descriptions of the property. The lawyer also makes sure that everyone is paid appropriately, so you can take ownership of your first home without any financial bumps.

 

Source: Genworth – HomeOwnership.ca

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Three TD Bank Group employees are speaking out about what they say is “incredible pressure” to squeeze profits from customers by signing them up for products and services they don’t need.

The longtime employees say their jobs have become similar to that of the stereotypical used car salesman, as they’re pushed to upsell customers to reach rising sales revenue targets.

They say there has always been a sales component to the job, but the demand to meet “unrealistic” quarterly goals has intensified in recent years as profits from low interest rates have dropped and banks became required — after the financial meltdown of 2008 — to keep more capital on hand to protect against a downturn in the market.

“I’m in survival mode now,” says a teller who has worked at TD for more than 15 years, “because it’s a choice between keeping my job and feeding my family … or doing what’s right for the customer.”

She and the two managers who contacted Go Public have worked more than 50 years combined at the bank. CBC has agreed to conceal their identities and location because they are worried about being fired.

“When I come into work, I have to put my ethics aside and not do what’s right for the customer,” says the teller.

TD profits graphic

TD has steadily increased profits from 2012-2016. (TD 2016 annual report )

Documents provided to Go Public show the teller’s sales revenue goals have more than tripled in the past three years.

“You don’t know what it’s like to go to bed at night, knowing your job is now to set people up for financial failure,” says the teller, her voice cracking.

Go Public has heard from TD tellers in several Canadian cities who say they quit their jobs because the pressure to push products was so extreme.

“I was made to feel as if I was committing a huge wrong for looking out for the best interests of my customer over the interests of the bank,” says Dalisha Dyal, who worked as a TD teller in Vancouver for four years.

Another TD teller says the relentless pressure to meet sales numbers is so severe, the teller is currently on a medical leave.

Teller screens highlight potential sales

The three bank employees who initially contacted Go Public explained how tellers upsell customers: when a customer keys in a PIN at the teller counter, a gold star lights up on the teller’s computer screen, indicating that “Advice Opportunities Exist.”

TD monitors graphic

When customers enter their PIN at a teller counter, a gold star informs the teller of ‘opportunities’ to sell the customer products. (CBC)

When a teller clicks on the star, products and services the customer hasn’t purchased pop up, such as overdraft protection, credit card or line of credit.

Each time a teller gets a customer to sign up for one of those options, it counts towards meeting their sales targets.

“Customers are prey to me,” says the teller. “I will do anything I can to make my [sales] goal.”

TD disputes pressure to sell

TD Bank Group declined a request to be interviewed, but sent an email that disputes the allegations that products and services are sold to ill-informed customers who may not need them or realize how much they cost.

‘We will only achieve our goals by doing the right thing for our customers.’– Daria Hill, TD Bank Group

“Our expectations are that our employees should never sell a customer a product that doesn’t fill a need,” spokesperson Daria Hill wrote.

Hill said having “metrics” and “goals” is a good business strategy, but that “we will only achieve our goals by doing the right thing for our customers.”

Hill says customers have said they want TD employees “to know them, understand their needs, give them proactive advice and ask them about how we can best meet their financial needs.”

That explains why customer profiles are flagged for products, services and pre-approved offers, Hill says.

TD reports record profits

The employees’ allegations come amid reports last week of record profits for Canadian banks.

TD Bank Group reported fiscal first quarter earnings of $2.5 billion — up 14 per cent from a year ago. Revenue rose six per cent to $9.1 billion — making it the largest bank in Canada, based on assets, surpassing RBC.

The TD employees say elderly customers are a common target because they’ve grown to trust their tellers over the years.

“There are elderly customers who have fought for us — they have an army pension,” says the teller. “And here I am, setting them up with all these service fees and they don’t have a clue what’s going on.”

Both the managers sometimes work the front counter and say there’s a big push by their branch manager to sign up people for overdraft protection, so sometimes clients with large balances get it, too.

“Customers pay enough in service charges,” says one manager. “They shouldn’t have to worry … ‘What has my teller added to my profile today?'”

‘More pressure on us’

“The higher-ups are also putting more pressure on us to get tellers to achieve these goals,” says the other manager.

“And if they don’t … our job is to make sure that they understand that they’re no longer right for this job.”

“I feel bad for what they’re making me do,” she says.

TD branch

The TD employees Go Public interviewed say the push to make higher profits is turning some customers away. (CBC)

When the managers expressed concerns to their branch manager and district vice-president, they say they were asked to consider whether they were still “a good fit” for the job.

Documents obtained by Go Public show tellers who fail to reach their sales goals are called “underperformers” and placed on a “Performance Improvement Plan,” which involves daily coaching and monitoring by managers. If sales performance doesn’t improve, employees are warned “employment could be terminated.”

In the statement from TD, Hill says “Performance Improvement Plans are intended to support our leaders and people managers in helping employees improve their overall job performance and are intended to help employees be successful in their role.”

Short-term gains

Pushing products on customers to maximize shareholder profits may produce short-term gains, but it’s not in a bank’s long-term interest, says Laurence Booth, a professor of finance at the University of Toronto’s Rotman School of Management.

Laurence Booth

Laurence Booth of the University of Toronto’s Rotman School of Management says pushing products on customers to maximize shareholder profits may produce short-term gains, ‘but sooner or later, these things come back to bite you.’ (CBC)

“If their [TD’s] employees start looking at everybody that comes into the bank as … somebody to try to make as much money off as possible, then the result is they’re going to be squeezing short-run profits,” he says.

“But sooner or later, these things come back to bite you.”

Booth says all banks want to be known as “trustworthy,” but that trust can erode quickly if a bank gets a poor reputation.

Hidden camera test

Go Public conducted a hidden camera test at five Vancouver TD branches to see what happens at the teller counter.

One teller offered to “activate” overdraft protection — not mentioning that there would be a fee.

She also suggested opening an account with monthly service fees of $29.95, when a “basic chequing account” — with fees of $3.95 — was requested.

Another TD teller put a Go Public tester in an account with fees of $14.95 — never mentioning the $3.95 account that would have met her stated needs. He also tried to sell a TD Aeroplan credit card, with annual fees of $120, and suggested the tester open two other accounts.

Tellers at three TD branches didn’t try to upsell the testers.

Tellers now called ‘front-line advisers’

One manager pointed out that tellers are no longer called “customer service reps” — an example, she says, of how far TD has shifted the focus from its customers.

“We’re now called front-line advisers,” says the teller. “That would be funny, if it wasn’t so sad.”

All three TD employees say they’ve considered looking for work elsewhere, but what they want most is for their employer to listen to their concerns — for the sake of its employees, and its customers.

Source:  By Erica Johnson, CBC News Posted: Mar 06, 2017 2:00 AM PT  With files from James Roberts

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