October 2006
GIVING YOU MY BUSINESS: ELECTRONIC SIGNATURES
In October 2000, the Ontario Government signed into effect the Electronic Commerce Act, aimed at removing obstacles to E-commerce and giving electronic signatures and contracts the same legal status as paper documents.
The government later amended the general legislation to specifically state that it would not apply to agreements of purchase and sale. Also excluded from the legislation were wills and codicils, along with powers of attorney.
Faxed agreements of property purchase and sale continue to be legal documents.
It seems only a matter of time however before electronic signatures will become the new standard. In some cases a person’s name typed at the end of an e-mail message has been deemed legal signature. Other simple methods involve a “capture” or digital representation of written signature which can thereby be placed anywhere a written signature might go.
Less easily copied is a more complex option called a “key pair”, which uses an elaborate one-way code that ensures only officially certified parties can create and verify a particular signature via a third party. The certification is generally done by government agencies or private enterprises called merchant providers (now sometimes seen with logos on web sites requiring credit card payment). Other methods involve a “security token” which is a small hardware device carried around by the user that authorizes him or her to access the network service.
The real estate industry is in a technology quandary due to the inordinate impact one transaction may have on parties to a sale, the rising threat of fraud, and the growing likelihood of city to city or even continent to continent property sales.
It’s impossible to witness in the flesh a signature being created half a country away. The legal and practical conundrum continues, and in the mean time agents are left in an unrealistic and vulnerable position.
In a time when our bills are paid on-line, and large personal and corporate funds are transferred to other parties via e-mail, you’d think this industry would solve the puzzle of signature witnessing for contracts of property sale!
WOMEN BEAT MEN
For nearly the past decade, single women have been buying twice as many homes as single men! Since 1997, single women have made up about 20% of all home buyers, versus 8% single men: married couples make up the other 62% of buyers.
Ever since I’ve been in this business, clients and casual acquaintances have stopped me to confide their certainty with detail about the housing market they see poised for collapse. Resale housing activity in Canada’s major markets in the first six months of 2006 surpassed all previous records for the first half of any year, according to statistics released by The Canadian Real Estate Association. Sales activity remains on track to set a new annual record in 2006. Sales just in my office for the month of September alone were up by 6 million dollars in dollar volume of sales, with the annual number of listings up over last year together with the annual dollar sales volume.
According to CIBC World Market’s latest economic forecast, a badly sagging central Canadian economy should drive the Bank of Canada’s interest rate down to 3.25 per cent by the end of 2007.
The forecast reports that with even this 100 basis point interest rate cut, Canada's GDP will grow by a disappointing 2.5 per cent in 2007. It’s predicted that growth will be marked by wide regional disparities with continued sizzling expansion in the resource-rich provinces (Alberta) with struggling performances in the country's industrial heartland. A slowing U.S. economy and a 90-cent Canadian dollar has resulted in the Canadian manufacturing sector shedding more than 10 per cent of its workforce since 2002, with most of the job losses in Ontario. With exports to the U.S. accounting for 33 per cent of Canada’s GDP, Ontario is looking at the potential loss of another 50,000 manufacturing jobs.
The CIBC World Markets report forecasts the U.S. Federal Reserve Board will only make three 25 bps cuts in the same period. As Canadian rates continue to fall relative to the U.S., negative interest rate differentials will balloon to 125 bps in the overnight market by the end of 2007.
In response to the multiple Bank of Canada cuts, Jeff Rubin (Chief Economist and Chief Strategist, CIBC World Markets). expects that holders of long Canada bonds can look forward to as much as a 10-point rally in the price of their bonds, as benchmark long bond yields decline by as much as 50 bps from current levels. The report also predicts that the TSX will set a new record high beyond 13,000 within the next 12 months. Nearly 40% of the TSX is in interest-sensitive financials, telecoms and utilities, and another third of market capitalization is in energy and base metals.
“While the TSX will have to ride out near-term weakness in the North American economy, Bank of Canada rate cuts will help high-dividend paying financial stocks, while rising crude and uranium prices will support valuations in much of the energy sector,” notes Rubin. “As the North American economy pulls out of a mid-cycle slowdown, we expect to see the composite index hit a new high."
FALL SHAKES LOOSE – COULD IT BE TIME TO FLY ? |