In this article we will discuss the key compliance and security benefits and look specifically at some of the most critical items raised by developer lawyers in response to requirements by the various governing bodies and how our specialized workflow conforms.

There are three main reasons why EFT is the better option moving forward:

Individualized collection and payment protocols. From the start, Avesdo’s EFT payment process is pulling all information directly from the contract and sending payment requests with contract specific payment links directly to the contract holder (the purchaser). By following these unique payment links, the purchaser is prompted to confirm payment instructions are correct and complete their own PAD authorization form which is required to initiate future payment.

This direct process ensures you are not distributing wire transfer details publicly for fraudsters to leverage and links payments with contracts and purchasers from the start for the tightest verification of source of funds and the most exact fulfillment of contractual deposit obligations.

Speed and Real-time tracking. EFT is the closest to real-time payment option available. A purchaser initiates a payment by signing their PAD – the system is updated. The funds are transferred – the system is updated. In our review the average check payment takes up to 45 days to process from the time it’s initiated by the purchaser to reconciled in the trust account with manual tracking along the way. Wires are not much better and take a month minimum and largely due to heavy reconciliation requirements as funds hit the trust account without notice. Each step in the EFT process is tracked in real-time with the most complete settlement report of any payment type and is issued the day funds leave the purchaser’s account.

Lower risk of error. In our development of this product we were amazed to learn how often checks are lost, and how often mistakes are made resulting in short payments, difficulty reconciling transfers, reporting errors from manual entry and that all these avoidable issues can delay large funding draws. Avesdo’s EFT process is pulled directly from information on the contract and when completed everything is exactly as contracted with little room for human error by any party in the chain. 

As we’ve been signing clients up, there are three main concerns we have been hearing from clients’ lawyers which have been identified and accommodated in the Avesdo EFT workflow that we will clarify here:

1. Revocability. This is an important one related to the ability for funds to be revoked from the trust account after payment is made. The way the Avesdo payment automation has been set up the funds are irrevocable once the transfer has been made. Any attempt to cancel a PAD before funds are transferred must be made through the developer / Avesdo so you would be well informed of their intent vs. other payment types that could be canceled at the bank without your knowledge. Even if they attempted to stop payment at the bank Canadian law requires they inform you first. And if the bank allowed them to break the law by not informing you, the payment would fail and no transfer would occur to be revoked.

Despite this confirmation, some have cited Payments Canada Rule H1 Pre-athorized Debits stating that there are up to 90 days for a payee to make a claim for reimbursement and so questions related to fund holds arise.

There are only three conditions where this claim is allowable for which none are possible with Avesdo’s payment workflow. They are:

A. The PAD was not drawn in accordance with the Payor’s PAD agreement

– At Avesdo, the information from the PAD comes directly from the contract, and the transfer is made exactly from the terms of the PAD. There is no manual entry where an error between the PAD and the transfer might occur.

B. The Payor’s PAD agreement was revoked

– As noted above, if the payor revokes the PAD they can only do so prior to the transfer and through request to you and therefore are unable to do so on their own after the transfer has been completed. 

C. A Confirmation, pre-notification or notice was not given in accordance with [requirements listed in other sections]

– Avesdo notifications are built into the automation and conform to all requirements by Payments Canada and have been vetted by the law firm who wrote those requirements.

Even if a purchaser claims one of the above conditions have been met, they must complete a formal dispute per the terms of Payments Canada to receive a refund and funds are not automatically recalled and therefore irrevocable once transferred.

2. Record keeping. The Law Society of BC Rule 3-64.2 and Bylaw 9 on Financial Transactions and Records from the Law Society of Ontario outline similar requirements for the management of trust accounts. Avesdo’s EFT payment automation not only conforms to the requirements, but also improves upon them. Settlement reports are issued (lawyers included in the notice) when a deposit leaves the purchaser’s bank account and is in transit to the trust account. The report includes an estimated settlement date and all the payment details down to the strata lot and deposit number.  We have reviewed our workflow with the Law Society to ensure compliance.

3. Direct transfer. FINTRAC PCMLTFA, RESA (BC), REBBA (ONT), RECA (ALB) all contain requirements for trust account management. The transfer of funds directly from the purchaser’s bank account to the trust account is imperative for the tracking of source of funds among other reporting as it links funds directly to the purchaser’s verified bank account vs. traveling through an intermediary obscuring the source and/or making reporting/transparency more complicated or difficult.

Through Avesdo’s EFT payment automation, Avesdo makes a direct connection between the purchaser and developer without passing through Avesdo’s hands in the process. The settlement report includes full transparency to the source of funds and associated contract down to the strata lot and deposit number.

Here is a handy reference for how EFTs stack up against other payment types:

Our team has spent many months developing this product and are well-versed on associated compliance requirements. Please do let your advisor know if you need clarification on how Avesdo’s automation workflow conforms to the various requirements in question. 

The post EFT Compliance: Essential Guidelines for Lawyers Across Canada appeared first on Avesdo.

In the highly competitive landscape of new home presales, success hinges on a number of key factors: agility, revenue optimization and unit sell-through, with efficient operations that minimize [read: eliminate] risks. This white paper delves into the significant enterprise benefits of leveraging Avesdo—a tool for new home sellers to accelerate sales, boost revenue, and dramatically reduce costs and risks in administration and associated human errors.

Let’s talk about the problems we know developers face

Presale home developers face countless challenges in a rapidly evolving market. Selling a project is much different than selling a single home. The numbers are bigger, making the risks greater, and the process more complicated. Lengthy sales cycles, presale requirements, financial risks, regulations, human error, and administrative bottlenecks can impede success. Avesdo emerges as a strategic industry ally, shifting traditional approaches toward more future-forward workflows (and with more ease), paving the way for our clients’ success in today’s automated world.

Challenges in Traditional Approaches

New home developers often contend with cumbersome administrative processes using paper or disparate apps and spreadsheets; human errors often slip through the cracks and losses can be measured in millions; protracted sales cycles, and inherent financial risks walk a fine line between a project being viable or not, nevermind the cost and headache to track data for future decision-making and regulatory compliance. All these risks for systems which don’t allow quick real-time decision making where the opportunity to increase revenues is almost always lost in the rear-view mirror.  These challenges have not only hindered profitability, but have also limited the industry’s propensity for innovation and, ultimately, growth.

Software Challenges

Before Avesdo, systems like ours typically had to be custom built or compromised on clunky generic CRM or ERP platforms that were extremely costly, a headache to maintain, and almost never worked as intended. Real estate developers had to become software developers without the ability to leverage their investment across the industry. The net result was easily duplicated systems for standardized industry processes offering no competitive advantage producing frustrated execution, data collection and data use which are the real competitive advantages. 

Project level solutions are not sufficient either as they face the added challenge of siloed project data, frustrating the desire to leverage learnings from one launch to the next. And newer catch-all new home focussed platforms claiming to provide “everything-in-one-place” seems like a no-brainer but, in practice, the complexities across departmental processes are infinite and the cost to customize and maintain softwares worthy of company-wide consideration are enormous and far too big for any start-up or small business to effectively take on. Most apps are not enterprise-worthy, and almost none of the software providers except Avesdo have the industry experience required to understand the important nuances of the new home sales market. For these reasons, there are failed software implementation stories spread like shrapnel throughout the top-tier developers.

Avesdo: A Comprehensive but Focussed Solution

Our thoughtful, detailed, robust and specialized sales platform was designed to automate industry sales best practices, empowering developers by addressing specific challenges they face at a project or enterprise level. By digitizing and automating critical sales processes, like payments through Avesdo Deposits [link to blog], it allows developers to focus on their core competencies: building and selling homes.

Key Benefits

Faster Home Sales

• Avesdo expedites the sales process, reducing time-to-market, and facilitating a swift return on investment
• Digital demand tools allow clients to run simultaneous pre-sale events, expediting a typically lengthy sales rollout with consecutive events
• Enhanced customer engagement tools and integrated communication features accelerate decision-making and purchaser action, expediting the entire sales cycle

Accelerated Revenue Generation

• Real-time data and proven presale workflows developed in the top presale markets in the world enable real estate developers to see and capitalize on demand early and quickly before it’s too late. 
• Streamlined workflows and automated processes enable real estate developers to sell quicker generating required presale revenue targets more rapidly
• Advanced project management tools facilitate efficient unit (and resource) allocation, optimizing yield and maximizing profits
• Our new Avesdo Deposits product, and digital EFT payment system, ensures our clients get paid faster (which means they get draws quicker to build quicker)

Risk Mitigation

• Comprehensive risk management features minimize administrative risks, streamlining operations and reducing costs
• Defined workflows and wizards ensure best-in-class processes must be followed and make it easy for anyone to do so
• Built-in regulatory compliance features help developers navigate legal complexities, reducing the likelihood of costly setbacks

Effortless Administration:

• Simplified documentation, automated reporting, and integrated inventory management significantly reduce administrative burden
• Developers can focus on strategic decision-making, innovation, and growth without being encumbered by paperwork
• Avesdo Deposits fully automates the chasing and collecting of crucial contracted payments, providing the support you need for your most important but cumbersome and disliked administrative function 

Real-world Impact

Case studies and testimonials from hundreds of launches and tens of thousands of sales underscore the tangible benefits realized by presale home developers who have embraced new home sales processes and platforms like ours. From shortened sales cycles to substantial revenue increases, as a leader in this space, Avesdo has proven to be a catalyst for our clients’ success.

In Conclusion

The adoption of Avesdo transcends a mere technological upgrade—it is a strategic imperative for the future of new home sales and development. Faster sales, accelerated revenue, and simplified administration are not just aspirations; they are tangible outcomes that are a must to be successful in today’s competitive new home selling space; achievable through the innovations found in our platform.

Your Next Steps

If you’re not using Avesdo yet, take the opportunity to transform how your business functions—and supercharge your sales. If you’re an existing client, connect with us to understand how to leverage more of the platform and reap the clear benefits. 

This is the future of new home sales—in a swift, profitable, and easier way.

For further information or to dive deeper into the Avesdo platform, please contact us at [email protected] or connect with your dedicated account manager

(photo credit: Tolu Olubode for Unsplash)

The post More are Switching to Avesdo as their Trusted Sales Operating System appeared first on Avesdo.

The post How Different Payment Options Stack up to Avesdo Deposits: A Comparative Chart appeared first on Avesdo.

In this article:

• About Contract Profile Management
• About Invitations
• About Consent

About Contract Profile Management

Each Purchaser and Realtor has a contract profile. The contract profile is the full set of required information that is collected for any given contract. Contract profiles are unique to projects, meaning a Purchaser or Realtor have the same information for all contracts on a given project, but the information can vary from project to project. 

Contract Profiles are project specific. The same profile is used on multiple contracts within a project and cannot be changed without affecting all other contracts within the project.

Purchasers and Realtors now see their contract profiles when logging on to Avesdo TMS. 

Changes cannot be made directly to the contract profile. However, all information is displayed as it will appear in the contract, and changes can be requested via the project sales admin. 

In future releases, contract profile changes by Purchasers and Realtors will be supported.

Invitation

Currently, contract profiles are created in 3 ways:

1. Registration
2. Allocation
3. Sales Admin (New Purchaser, New Realtor)

In this release we’ve introduced a new method of creating contract profiles called Invitation. Invitation is presented as an option in TMS wherever a new Purchaser or Realtor are created: 

• Reporting → Purchaser/Realtor → New User
• New Deal → Add Purchaser/Add Realtor
• Deal Center → Deal Users → Add User
• Purchase Request → New Deal → Add Purchaser/Realtor

Invitation behave much like Registration, but instead of being sent a registration link, a new User receives an email inviting them to complete their contract profile. 

Why send an Invitation?

Sending an Invitation a user to complete their own profile provides several advantages for Developers:

Users enter and verify their own personal information. Mistakes often occur when Sales Admins are entering a user’s personal information. By placing this task in the hand of the user, mistakes can be minimized.

Personal information is not sent to a Developer via insecure means (email, etc.). Users that send personal information electronically to be included in a contract risk having that information compromised. Email and text messages are insecure methods of sending sensitive information, so eliminating this step provides security for all users.

Developers do not need to store sensitive personal information. User information that is sent to a Sales Admin through email or text becomes part of an insecure device (laptop or phone), representing significant security and legal risk to the Developer. By eliminating the transmission of personal information, this risk is also eliminated.

Confirmed Profile

With the introduction of Invitation, the current method of completing a contract profile has been renamed to Confirmed Profiles. This method remains unchanged and is used when Purchaser or Realtor information is available to a Sales Admin, such as during an in person contract.

(Above image: a confirmed profile)

Using Invitation: Sales Admin (Inviter)

When creating a new Purchaser or Realtor contract profile, a new prompt will appear asking to select a mode for completing the profile:

Choosing “Invitation” will bring up the Contract Profile dialog. In this mode, the only information required is the User email address, Legal First Name and Legal Last Name.

Selecting “Invite” will complete the process. The new User will be sent an email notifying them of their invitation to complete their contract profile. 

Invitation: New Deal

If a Purchaser and/or Realtor are added to a New Deal using Invitation mode, two things will happen:

1. The Deal will be listed as a Draft Deal within Reserved Listings.
2. The invited Purchaser/Realtor will be listed as a Pending Participant within the Draft Deal.

Draft Deals are found within Reserved Listings.

Selecting a Draft Deal brings up the following dialog:

Selecting a Draft Deal will show any Pending Participants.

Like all Reserved Listings, Sales Admins can only see the Draft Deals that they have created.

A Draft Deal will remain unpublished until all of the Users within the deal have completed their contract profiles. 

Completing the contract profile of a Pending Participant

If a Pending Participant is unable to complete their contract profile, the Sales Admin can choose to complete the profile by invoking Confirmed Profile mode. This is done by selecting the edit icon (pencil) beside the Pending Participant:

This will open the full contract profile page, and present an option to switch the profile to Confirmed Profile mode (found at the bottom of the profile page):

Choosing “Switch Method” brings the Sales Admin back to the mode select dialog:

From here, the switch to Confirm can be done, and the contract profile can be completed.

When all Pending Participants have completed their contract profiles, the Deal will automatically publish to Deal Center.

Release Deal

Invitation: Existing Deal (Deal Center → Deal Users → Add User)

If a Purchaser and/or Realtor are added to an Existing Deal using Invitation mode, the invited user will be shown within the Deal as a Pending User:

Inviting a User to an Existing Deal

When adding a Purchaser or Realtor to an existing Deal using Invitation mode, notices and warnings are provided that explain the Pending User rules.

Completing the profile of a Pending User

If a Pending User is unable to complete their contract profile, the Sales Admin can choose to complete the profile by invoking Confirmed Profile. This is done by selecting the Update button beside the Pending User:

This will open the full contract profile page, and present an option to switch the profile to Confirmed Profile (found at the bottom of the profile page):

Choosing “Switch Method” brings the Developer Admin back to the mode select dialog:

From here, the switch to Confirm can be done, and the contract profile can be completed.

Remove a Pending User

Identifying Draft Deals and Pending Users

Deal Finder has been expanded to include any Draft Deals and Pending Users within a project:

Search By Unit

Lists any Pending Users in a searched Unit

Search By Email

Lists the Deal for any searched user email address that is Pending.

Search By Name

Lists the Deal for any searched use that is Pending.

Draft Deals

Finds all Draft Deals in a project.

Pending User Deals

Lists any Deals that contain Pending Users.

Using Invitation: Purchaser or Realtor (Invitee)

Purchasers and Realtors that are invited to complete their contract profiles will receive an invitation email containing the following:

• A notice that they were added to a development project.
• Their username.
• A password reset link and login instructions.

Once the Purchaser/Realtor has successfully logged in, they are presented with their contract profile:

All required information must be filled out in order for the profile to be completed. Once completed, they will be able to view and sign documents for that development project. If the activity is cancelled, the user will be shown the contract profile page at the next login. Any previously entered information will not be saved.

Consent

With this release we are gathering explicit consent from Purchasers and Realtors, and we are informing Sales Admins of their responsibility to gather consent when completing contract profiles. 

We’re asking Users to consent to:

• Receive, approve and sign contracts and documentation via Avesdo/Offplan
• Allow the personal information that they provide to be used in a contract profile
• Allow project administrators to input and modify their contract profile information if requested.
• To conduct transactions by electronic means and to use electronic signatures in the project.

Consent is required for any User (Purchaser or Realtor) in order for a Deal to proceed. 

User Consent is required once per project, as the consent is between Purchaser/Realtor and Development. Avesdo is collecting consent on behalf of the Development. 

Where we are gathering Consent

New Purchaser/Realtor: Confirmed Profile

When completing a Purchaser/Realtor contract profile in Confirmed Profile mode, the User Consent disclaimer is shown:

Sales Admins must communicate this consent to the Purchaser/Realtor being added to the project.

New Purchaser/Realtor: Invitation

When completing their contract profile, Purchasers and Realtors are shown the Consent disclaimer:

Should the Purchaser/Realtor cancel completing their contract profile, a warning is shown:

Existing Purchaser/Realtor

Existing Purchasers and Realtors will be shown a consent statement the first time they login to Avesdo. To proceed with any other actions, they will need to accept the consent statement. This must be done once for each project.

The post Contract Profile Management, Invitation & Consent User Guide appeared first on Avesdo.

So, how can you be better prepared for the incoming fall market of project launches with Avesdo? Here are five steps you can take to future-proof your fall season.

Upload and input the project’s units, unit information and prices into the platform.

The loading of the inventory is the first step in viewing your units in the system that starts the purchasing process.  The individual unit information provides your sales team and purchasers the exact information used during the purchase process.  This information with the Onboarding Survey creates the business rules of the system that allows your sales and admin teams to begin the process of generating deals.

The timeframe to provide your team access to the system with this information is approximately 2 – 4 business days.

Upload relevant contracts.

The second step that moves your sales and admin teams further in the purchaser process is the loading of the relevant contracts and addendums. This process begins with draft copies of each of the documents, that provide our Customer Success team the ability to program the individual field information contents. With each relevant document loaded and programmed, the sales and admin teams continue the purchaser path and ensure the business specific needs are identified and adjusted accordingly.  As we know that documents are rarely finalized until the last minute, the draft copies allow your team the ability to fast track the implementation and as the final documents are completed, the process to overwrite the draft is an easier step than having no draft documents.

The timeframe to load and program the relevant draft documents with the information is approximately 2 – 4 business days.  The timeframe to replace draft documents with final documents is approximately 1 – 2 business days.

Upload all your floor plans.

The third step that gets Avesdo to another level with your sales and admin teams is the uploading of the marketing assets: Floor plans, color schemes etc. which are the show and tell of your development. This process involves the uploading of each of these assets that provide our Customer Success team the details of your development and provide that customized look and feel to your development on Avesdo.

Seeing is believing and when your teams see these assets and your clients view these items online, the process only enhances the purchasing process to another level.

The timeframe to load these assets is approximately 1 – 2 business days.

Ensure all necessary integrations are set up.

System integrations have become a cornerstone of the real estate industry. Integrations with other systems, data warehouses, data analytics, the process of moving important data from Avesdo to other endpoints facilitates communication between systems that do not normally communicate. These integrations ensure that all systems and data work together and in harmony to increase productivity and data consistency.

Our Customer Success team can generate API information and provide necessary documentation within 1 business day.  We can also work with your integration providers on best practices that we have seen in the industry. This makes it sound like it takes 1 day, we should maybe suggest that it may take their teams longer on their side depending on the complexity of their system. 

Check that database information is up-to-date and correct.

With every project launch on Avesdo there are many moving parts. To ensure the success of every project launch we follow a stringent Quality Assurance Process to validate that nothing is overlooked. These steps are critical and involve both your team and our CS team from the Primary QA thru to Project Launch and handing your team the keys to your project on Avesdo.  This process will verify the process and business needs, as well as identify any changes required with final certification of the project on Avesdo.

The timeframe to complete this process is approximately 2 business days.

*A note about customer service

There are always last minute requests, and our clients have come to know we will do everything we can to accommodate.  We do offer overtime services for a cost when we have the heads up to coordinate. As this fall is scheduled to be a busy one, we really encourage you not to rely on last minute miracles and plan accordingly. Just because we have been able to work a miracle in the past, doesn’t mean we can do it again so it’s best to be ahead of the game.

Need support in your fall prep? Connect with one of our customer service support team members at [email protected] or with your dedicated account manager. 

The post Five ways to Futureproof Your Fall Selling Season with Avesdo appeared first on Avesdo.

Thrilled to share the first of our quarterly product updates, where we give an update on new features and product enhancements that our team is working hard and diligently on for you. In Q2, we introduced a responsive OffPlan for realtors and an augmented API V2, including a usage indicator and add/edit plan feature for enterprise plans. 

The post Quarterly Product Update: Q2 2023 appeared first on Avesdo.

This is becoming an all-too uncomfortable and sticky narrative. In the battle to tame inflation, interest rate increases continue to beat up the housing market, but not in the way the BoC might hope. In a roundabout way, with the intention that interest rates might subdue home prices, we just keep suppressing supply, and are creating the opposite effect.

Today, we thought it would be useful to share the very real impact these rate hikes have on the new home market, and how – combined with other factors like immigration and high demand – this impacts Canada’s overall housing dynamics.

We are going to keep things simple, by highlighting some basic correlations.

• Immigration is at record highs so more housing is needed.
• Inflation is high, so rates have increased, which makes mortgage and construction debt expensive.
• Material costs have inflated, as has the cost of labor, so housing is extremely expensive to build. This means more money/debt, and higher prices, are required to start a project.
• Debt is expensive, so more buyers struggle to afford what they used to, so prices fall. But, more housing is needed, so prices only fall to the point supply and demand meet.

The circle looks like this: 

As the graphic shows, the challenge is that every counter measure leads to, with equal or greater momentum, the opposite result.

It would be different if there were no demand or immigration, or if developers had to bring inventory to market – which they don’t. 

It would also be different if there was a glut of supply in the market – which there isn’t.

The Data On Demand

The week of the rate announcement, we saw new deal starts drop 34% vs. the week prior, only to rally right back up the following week and hit a 2023 high point the next week. 

The Data On Supply

Despite having more than 50 projects contracted and ready to launch this quarter, we saw less than half actually go forward, totaling only 65% of what was launched the same quarter last year. The data shows that as buyers get momentarily fearful and pull back, developers pull supply back even further, and don’t come back to the table as quickly as buyers do.

All About Prices

The week’s sputter in absorption had virtually no effect on prices. In fact, in 2023, the average sale price of a new home launched through our system in Canada is over $1,100psf, up from just over $1,000psf in 2022. And that’s without significant, high-priced downtown tower launches to pull up the averages – these numbers stem largely from suburban projects and towers in the outer rings of the greater Vancouver and Toronto areas. 

More On Supply

For 20 years, the government has tried to tackle housing from the speculative demand side. They’ve added taxes, increased mortgage qualifications, and dissuaded foreign ownership, among other tactics. But this only addressed demand for ownership (and just slightly), not housing. As our population has grown – passing 40 million this month – CMHC reports housing supply has not kept up. Now, after many years of increasing housing demand, the supply gap is so large that ownership demand tactics simply don’t work – not even temporarily.

Assuming there is no longer debate over the fact this is a supply issue, let’s look honestly at where housing supply comes from. (Trigger warning, this may feel scary): 

1. Developers build it
2. People leave their homes — owners have to sell and rent, renters have to vacate and become homeless, or people leave the country
3. People die, no longer needing housing, so properties go back to the market

Let’s tackle these one at a time.

Developers Need To Build More

Based on our data, which we’ve been sharing for months, developers are not building enough. They continue to stall projects by the dozens, shorting the market thousands of units annually. This will not change until the math works. Period. The small number of units being built by not-for-profits or government development companies is a small fraction of what the development community is withholding, and capable of delivering. Whether for or not-for-profit, the supply is not being built to the level needed in all asset classes.  

People Lose Their Homes

Sadly, this will increase. As ownership has moved out of reach, more will either elect or be forced to rent. As rental demand increases, rents sky-rocket – as we’ve seen. This means more residents pushed out, adding to the number of adults living with elderly parents, in vans/RVs, shelters, or on streets. BC reports almost 20% of its homeless population is actually employed. More people are coming to Canada than leaving, and those moving from cities and provinces are relocating further afield, driving prices up in all regions, further displacing more people.

People Die, Freeing Up Housing

Without leaning into the sensational and grim reality of this statement, it’s real. We must consider the aging Baby Boomer, who will make up most of this group in the coming years. Currently, the oldest Baby Boomers are 77. As the average age of death in Canada is currently 82, we expect to see the mortality rates for Baby Boomers begin rising dramatically within the next five years. When you consider that birth rates have been on the decline in Canada for decades – currently well below replacement rates – today’s immigration efforts are more easily understood (but unlikely to fully compensate for the impending losses). I would point to our current labor market as a leading indicator: immigration struggles to offset the increasing number of Boomers leaving the labor market, majorly impacting wage inflation the last few years. In summary, more supply is coming – but will take between five and 10+ years to onboard as our aging population dies.  

Combining all these factors with their current solutions, this story ends with home ownership and rent costs at an all-time high, more homes owned by the rich and institutions, and increasing counts of people living with their parents, in their car, or on the streets.

As I’ve likely been branded “pro-developer” – and some may have already stopped reading – I’ll spare you my opinions, and instead point to this problem’s glaringly simple answer.

We need to ensure the housing development industry delivers the much-needed supply that it can, and the only way to ensure that happens is to help them make the numbers work. That’s it. 

It means you will have to become okay with them making a profit. It means you may even need to subsidize that profit with government incentives. It means that you may need to become okay with density in your neighbourhood, or with the fact that unproductive agricultural land, growing weeds, may need to be repurposed. It means that some housing will get more expensive, in order to subsidize affordable housing. It seems to me the alternative is for more people to lose their wealth, and their housing, or for us to wait until they lose their lives.

You don’t have to like it, but the data is clear: if the pro forma doesn’t work, housing doesn’t come to market, which undersupplies the market, which – in the current high demand environment – makes prices (and pain) go up.

The government can’t build enough social housing. It’s too expensive, and one of the main mechanisms to do so is to attach it to market condo development as a requirement. None of which will get built if the numbers don’t work.

It’s slow, and requires now-non-existent cheap debt, for average Joes to build laneway homes or basement suites. Office owners would require zoning, plus massive and expensive infrastructure changes, to become residential builders and reno empty offices into condos at any scale. Foreign buyers left the movie, and it appears they weren’t the problem. 

Having followed the data daily, and with my 20 years of development experience, I would suggest that new home builders are the only ones who can quickly and effectively solve this supply problem. And looking at our backlog, they are ready to do it – quickly, with thousands of units – if the numbers work.

What You Can Do

Contribute politically. Vote for housing. Support municipal, provincial, and federal politicians who plan to empower the industry to deliver it. Support projects at public hearings, developer open houses, and the like. Put down your NIMBY (not in my back yard) placards and support density in your community. Support all housing types — social and market, rental and ownership – we need it all. 

Stop sitting on the sidelines hoping for a crash — the data suggests it’s likely that the cost (price and debt) will just keep rising. The only scenario where it doesn’t is a crash so dramatic and devastating that only the rich and the institutions will be able to buy (so you’ll miss out then too, and may actually be contributing to that eventuality). 

Baby Boomers, continue to help your kids — they desperately need it. Start moving your wealth out of your homes now to offset their debt costs. Sell your second home to get your kids into their first; buy a presale for your kids, or to downsize into in a few years – you can help finance when it closes, when rates are likely to be lower. 

Whatever you do, support the new home building industry to do what they do, and bring any and all housing to market.

This article is authored by Ben Smith, President of AVESDO: a Canadian software company harnessing the power of data to help real estate professionals make better, faster, and more informed sales decisions.

The post Dueling Interests: How Inflation Remedies Are Hurting Housing Starts appeared first on Avesdo.

Today, amid rapid change, we’re going to check in on where things are at in the new home real estate realm, and we’re going to try to answer: After all the events of the last couple years, why didn’t the market crash?

Q2 2023: Where We’re At

We left Q1 with a mounting wave of project launches, building since Q3 2022. Over the last six weeks, developers and sales firms have scrambled to prepare for launch. We expected to see more launches in April than in all of Q1, but that didn’t happen; only half were able to get out the door. This leaves a bigger wave of more than two dozen projects slated to come to market in the remaining few weeks of May, and another dozen lining up for June. 

So is this the same old delay story, or is it different this time? Time will tell. But the difference we see now is, the reasons for delay appear to be much less about selling confidence, and much more about the practical challenges associated with turning a market back on. In my view, this is an indicator we’ve moved to the next stage in a market turnaround.

Let’s dwell on this for a second. The last year has been marked by a hard-stop of launches and forward movement from developers. This led to a series of layoffs and hiatuses for many sales staff on the floor. Some found new jobs, some moved to head office, some focused on their resale business. Now there’s a scramble to get them back, get teams assembled, and get ready to sell — and that’s taking time.

Similarly, vendors who served the industry — from signage companies to law firms and everyone who supports a project going to market — also had layoffs, or reverted their focus to more active lines of business. We are hearing about challenges in getting these people back on the job in a timely manner, with delays in printing, getting disclosures and legal documents sorted, finalizing floor plans and renderings, etc.

The good news is that it appears the entire industry is actively rallying and preparing for the launch wave to hit.

Assuming we’re right and it does hit, will anyone buy? We suggested in our last article that Q1 challenged absorptions, but they showed signs of increases heading into Q2. Our data shows in the last two weeks, more than double the number of new sales transactions were started than the previous weekly starts. In fact, there were more new deals started in the last two weeks than in the entire months of January and March. This should come as no surprise, given mainstream media reports of strong sales at some widely publicized launches.

So, it would appear the new home market is dusting off its cobwebs and is actively taking off.

Why Was There No Crash?

If we are correct, and a market rebound is upon us, now is the time to look back and consider why the “imminent market crash” never happened. We’ve talked about it in roundabout terms a few times, but at the risk of repeating ourselves, we want to explore a couple factors in more detail.

The first factor we won’t spend much time on – as we have beat it to death – is supply. Read our articles here, here, and here. We sound like a broken record stuck on the ability for the Canadian new home development industry to control supply, balancing it almost perfectly with demand. In the downturn the last 12 months, we never reached an oversupply point… ever. In fact, some might argue we remained under supplied the entire time.

The second factor we want to highlight is around deal security or risk. That is, why weren’t buyers walking from their deals, flooding the market with excess inventory, overpowering the industry’s ability to control supply? Aside from the legal ramifications of trying to do so, we’ll look at two contributors: deposits and equity.

Very simply, people only consider walking away from deals if they physically can’t close, or stand to lose more by keeping it than they do from hanging on. So what does a buyer have to lose by walking away when a market seems dead?

For starters, they would lose any equity gain from what they paid to what it’s worth today — even in a suppressed pricing environment. As a reminder: anyone who needed to close in the last 12 months likely made their purchase 3-5 years prior, at 2018-2020 prices. And as we described here and here, most who bought pre-peak never got into a negative equity position.

So, when you consider most homes required to close in the last year had positive equity – add in the fact they would have around 20% deposit that could immediately be converted to their down payment – the risk of buyers breaching contracts or struggling with financing was extremely low in this country. This is ultimately why the new home market never crashed, and it likely won’t.

Looking ahead, we’re excited to watch this market rebound, building on the strong foundations of the Canadian new home development industry. And we’re even more excited to help contribute to minimizing developer and purchaser risk with our new AVESDO Deposits.

Ask a sales advisor about how AVESDO helps developers and sales firms minimize their risks and maximize their opportunities.

This article is authored by Ben Smith, President of AVESDO: a Canadian software company harnessing the power of data to help real estate professionals make better, faster, and more informed sales decisions.

The post Strong Early Indicators Point to Market Rebound in 2023 appeared first on Avesdo.

Despite challenging conditions, we believe it’s essential to provide transparency and clarity to help you make informed decisions. Our analysis shows that sales, prices, and supply have decreased. However: the devil is in the details; we’ve gone through the data to bring you some specific insights.

Sales

It’s no surprise to see sales were down. Specifically, sales through our system in Q1 2023 were 61% of Q1 2022, and only 55% of Q1 2021. When we talk with our clients working the floor, it’s evident there is a real change in sentiment driven by the current economy, and a +4% increase in interest rates from the peak. But what else can we learn from the data?

In order to have sales, you must have supply and absorption. We’ll tackle supply in a minute, but first, let’s analyze absorptions to understand the level of market demand.

Through Q1, absorptions were a tale of two coasts, and were even more granular neighbourhood to neighbourhood. In Greater Vancouver, the absorption numbers were down from peak intensity, but were pretty consistent on all-time averages; projects absorbed 45% of their inventory within 30 days of their launch, on average. These numbers vary dramatically across neighbourhoods, and by product type and price, but typically show the resilience and stability of this market.

The Greater Toronto Area was a dramatically different story, with some projects achieving 30-day absorption rates of <5%, skewing the Q1 launch average well below standard. 

Digging deeper, there appears to be a number of reasons for this. For starters, there weren’t many launches in Q1 in either market to compare, so big successes or failures swung averages dramatically. That being said – and recall we’ll be diving into supply shortly – after a full analysis of every launch, and with 20+ years of personal experience informing my gut feel, there did appear to be a meaningful difference in BC’s versus Ontario’s presale market paces in Q1, with Toronto not showing the same resiliency of its west coast counterpart. 

It should be noted that it’s likely the location, prices, or product types of Ontario’s launches did not help their cause, while BC’s projects boasted more favourable conditions. It’s important to clarify Ontario project sales have not stopped, but just continue to absorb slowly on average. In the last few weeks, we have seen a significant increase in absorption, so I wouldn’t count the GTA out just yet.

Before getting to supply, I should note that we did see a small increase over both 2021 and 2022 in the number of sales occurring within projects launched the year prior. Meaning, older inventory from projects that launched as far back as 2017, with the majority of these past sales from 2022 projects. This speaks to the lack of new supply pushed into the market, and suggests demand was potentially stronger for products or prices that the market hasn’t been able to introduce so far this year.

Supply

Well, I may have already stolen my own thunder here: surprise, supply was way down. Q1 saw half as many project launches through our system as there were in Q1 2022, and just 57% of 2021. There were a few large tower launches, but generally, supply by unit number was down similarly. I note these are pretty similar statistics to what sales volumes were, showing the industry’s incredible ability to match supply with demand. 

As we described in the fall, we’ve watched developers control supply for many months now, holding back thousands of units across dozens of projects. Q1 was no different, and the general sentiment was that everyone stared at each other, waiting for someone else to launch in order to prove the market. 

Today, we can see more than 7,000 units with confirmed launch dates, and only 600+ still pending. These dates could continue to slip, but having an actual date is a big change from even a few months ago, and our onboarding schedule is far more green than red – which it has not been for almost a year. If April is an indication of what’s to come, and if everything goes as planned, our clients will launch more projects through our system in the month of April than what was released through all of Q1.

Price

We’ll finish by discussing what everyone wants to know: are prices up or down? In an undramatic fashion, I regret to inform the doom and gloom TikTokers that, although the average price of homes sold through our system are down from the peak in Q1 2022, on average, 2023 prices have been 1% higher than Q1 2021 prices. This is just a continuation of what the data showed us last October when we published that “YoY prices are neutral in most markets with the gains from Q3 2021-Q1 2022 all but erased.” 

You don’t have to be an expert to see that although sales are down, they remain steady. And although demand is down, supply has been equally constrained. Plus, if you factor in historically high immigration and population growth, and construction prices that have remained high, we are still convinced of our position that prices for new homes are unlikely to go down any further. In fact, they’re more likely to rise, if these upcoming launches produce the successful sales pace expected.

With a robust spring launch schedule on the horizon, another rate hold from the Bank of Canada this month, declining inflation numbers, and ever-increasing supply needed to meet population requirements, we are confident the new home market has started to rally — and we will see sales and inventory increase through the spring market.

This article is authored by Ben Smith, President of AVESDO: a Canadian software company harnessing the power of data to help real estate professionals make better, faster, and more informed sales decisions.

The post Down But Not Out: New Home Sales Industry Proves It Can Balance Supply and Demand appeared first on Avesdo.

Minds were blown. Excitement grew, as did fear, and many questions emerged as AI jumped into the mainstream, pulling data from digitally accessible, text-based information sources to come up with answers to questions and results for tasks (note: it parses information that existed at the time of ChatGPT’s training, prior to 2021). 

The real estate industry has typically been slow to adopt new technologies, but there has already been some buzz as forward-thinkers try to understand how AI could impact their business — and the industry — moving forward. 

In this article, I will break down how you might think about this new innovation, and prepare yourself for a future that might look very different. Let’s start with some tech basics, both in general and specifically for real estate. When thinking about the importance of technology, I like to break it into two categories: workflow and data.

Workflow

I built my first intranet in the early 2000’s. The goal of that build — and most since then — has been workflow automation to create efficiencies, such as doing work processes faster and with more accuracy, eliminating opportunities for human error, and leveraging the ability to compare data points to introduce triggers for quicker decision making. The primary goal of these workflow systems was to save money by reducing costly errors or creating efficiency, generally measured against human wage savings. 

Even now at AVESDO, by digitizing many new home development sale processes, we provide value to our clients via error/risk reduction, and minimizing costly administrative personnel. In more recent years, we have expanded our workflows to increase strategic automations and processes. These have made executive-level decisions more efficient, requiring fewer senior-level experts to manage, further reinforcing the cost side of the equation whilst adding revenue-optimization opportunities. The value of these more advanced workflows are almost directly proportional to the amount of data they analyze and process within the workflow automation. This will only become increasingly more sophisticated.

Data

The other side of the workflow coin is data; data can be both qualitative and quantitative, and forms the basis for software/computer operations. Very simply, a computer can be programmed to collect and store data, which it will use to perform certain functions or automations. At AVESDO, we collect over 300 data points from a purchase and sale agreement, which the system uses to create workflow automations, or display within reporting in other platform areas. 

In early days, these data points were limited, and over the years they’ve grown in both the volume and breadth collected. Software is now able to do complicated data references and associations within seconds, leveraging increasingly large data sets. The limitation and useability are largely related to data cleanliness — and a human’s ability to define the software’s logic path. That is, an expert must understand what data points are relative and relevant to each other, in order to program a computer to automate those connections.

As an example, our early AVESDO system could enter the price of something and then display that price in multiple locations and reports, and use it to automate the calculation of taxes and other workflows in other locations. Newer software could create further automations around that price point, or pull the data from other systems and databases to create new data points or provide preprogrammed analysis, dramatically speeding up decision-making.

Looking ahead

Understanding these concepts, let’s explore AI’s workflow and data impacts. It’s easy to imagine the first part: in workflow, there are already significant advancements happening in AI and its predictive modeling and analysis. 

In the last year, we have already started moving in this direction with the implementation of our demand analytics features. This allows clients to intake demand requests/data, which the system uses to provide a building heat map, facilitating yield management decision automation. With the implementation of AI language models like ChatGPT, it’s easy to imagine a scenario where you might ask the system to “optimize my building to balance an even distribution of inventory while maximizing revenue,” or “based on selection requests submitted, price each unit to maximize absorption,” or ask: “based on past sales performance, who is the best realtor to sell the last remaining units?” – among many other exciting queries. 

The issue is going to be with the second half of the equation data. As an example, I asked ChatGPT some of those questions, and received the following result: 

“I don’t have access to current real estate market data, so I can’t give you a precise estimate. However, I can suggest some general guidelines that can help you arrive at a reasonable range.”

It proceeded to give me a list of the factors I would consider to answer the question. And based on my 20 years experience selling new homes, I can tell you, it was bang-on accurate with what those factors were, showing me that if it had the data, it could easily do it for me.

The problem is that there is no database or dataset that exists today that an AI could reference to easily answer these questions. Especially in the new home segment of the market, where there is no MLS, nor a central database of transactions — and there may never be.

So, therein lies the clue to where our market may go moving forward. There are many questions — from pricing, to yield management, to optimizing distribution — that ChatGPT or other AI language models could answer easily today, changing the new home development industry forever… but it would have to have the data to do so. The future is in the data.

Therefore, the most important trend we are likely to see in new home development sales will be the collection and creation of relevant datasets an AI could reference to answer questions and perform functions. Those datasets may be built around pricing, inventory, unit-related data that may be fed in through construction- or development-focused softwares, and other sources.  

At AVESDO, we continue to emphasize the importance and priority of data for our clients, and we are focused on improving their ability to collect it, manage it, and use it to make important decisions that will save or make money. We really believe their power is in their data. 

We are working on many new features to help clients capture or input important data points and workflows that leverage the data they already have. We are excited to arm our clients with the tools they need to leverage the very real and exciting power of AI, as it becomes more integrated into our day-to-day lives. 

Call us today to speak to one of our experienced Real Estate Technology Advisors and find out how we can help you harness the power of your data and future proof your sales process.

This article is authored by Ben Smith, President of AVESDO: a Canadian software company harnessing the power of data to help real estate professionals make better, faster, and more informed sales decisions.

The post The Future Is Now: How ChatGPT Could Impact New Home Sales  appeared first on Avesdo.

That is why we are going to cover email deliverability in this blog post, arguably the most important piece of the puzzle when considering going digital and in selecting a sales OS platform.

What is email deliverability?

Simply put, it’s a measure of how well your emails perform in their ability to make it to the receiver’s inbox. More than just delivery status, deliverability assumes the email made it past the recipient’s server and provides performance metrics for how many made it to the recipients inbox vs. a junk, spam, social etc. folder.

Why does this matter?

For software you rely on to deliver important things like inventory allocations, contracts, addendums, and amendments, the probability of the email making it to the recipient is the difference between a deal or no deal, or even that contract holding up in court. In short, it’s everything to us and should be to you.

What does the research say?

According to the latest from Influencer Marketing Hub, only 79.6% of legit emails reach their final destination. This means that on 500 sales where the contract is delivered by email, on average 102 don’t make it!  That is a staggering and unacceptable amount, and a tonne of risk for any developer to take on. 

What impacts your deliverability rate?

Several factors affect email deliverability:

• Amount of received spam complaints
• Content of the email
• Sending volumes of emails in particular time frame
• Infrastructure used to process emails
• Open and bounce rates

One of the biggest offenders is marketing emails as they tend to negatively impact every single one of the aforementioned. Statistically benchmark open rates on marketing emails in the real estate industry are just 26% vs. transactional emails which average 80-85%. 

And, like all things on the internet, your proficiency is tracked by a reputation score which ISPs care a lot about and will check before every attempt. If your reputation is bad you can’t just improve your deliverability overnight but you will need to slowly build back your reputation.

Generally speaking, email best practices suggest a company should target delivery rates over 85% and seek to be as high as 95%. 

How does Avesdo perform?

As this is a metric we have prioritized since inception and wish to over-perform against given the importance of sales related emails, today, we are very pleased to say we have a consistent delivery rate of over 99% and bounce rates below 1% (invalid recipient, full mailbox, etc.) or blocked (invalid domain, mailbox full, invalid configuration, etc.).  This means that in almost every instance an email sent through Avesdo was accepted by the receiving mail server! 

With such a high reputation score and email deliverability metrics, Avesdo is among the very best and most reliable email distribution systems out there. So much so, it is very likely that Avesdo’s email system may outperform your own email servers and almost certainly outperform any server tied to your email marketing efforts.

Deliverability as an Answer to questions we are often asked?

As the industry becomes more sophisticated it’s these little details that can make all the difference for why one system is a better solution than another, and quickly answers common questions you might have. 

For one, we are often asked how we are different from an off-the-shelf digital signing tool; aside from the many workflow and reporting differences, our ability to ensure the recipient actually receives the contract is a major one and a significant risk if your deliverability and reputation are less than Avesdo’s.

Another big question is why we don’t incorporate CRM into the platform and have chosen to focus on building the very best sales OS. Now that you can see the impact of email marketing on deliverability, and given CRM’s in real estate are often just email marketing machines, you can understand the impact that would have on our ability to ensure delivery and how detrimental that could be to our offering. This is just one major reason why we choose to connect to world-class CRM providers via API and keep the contracting platform and its email server completely separate.

Contact one of our experienced Sales Advisors today to get a complete demo and ensure your next sales launch with Avesdo.

The post Ensure delivery of critical documents with Avesdo’s best-in-class deliverability rating. appeared first on Avesdo.

If you have a question that you can’t find the answer to, please contact us.

What is Avesdo?

Avesdo is a software solution for residential real estate developers, builders, sales & marketing firms and brokerages to make selling an entire project easier.

We call ourselves a ‘transaction management software’ or TMS.

How does Avesdo make (and save) me money?

Avesdo can help you put more money into your pockets in two different ways: (1) saving costs and (2) increasing profits.

Our workflows reduce operational friction. What this means is that you can close deals with greater certainty, less risk and fewer errors. Additionally, your administrative team spends less time completing paperwork and fixing costly mistakes. Combined, this speeds up your project’s time to completion.

Our clients also gain unparalleled insights into the demand of their project before sales commence. This helps ensure that each home or unit’s selling price is fully optimized, and that you are maximizing your project’s value..

Is Avesdo a CRM (Customer Relationship Management) software?

No. Avesdo ingests CRM data to take things beyond the “desire” stage of the homebuying process and manages the workflow through to transaction and post-sale management (hence the term TMS). CRMs are beneficial to intake leads and nurture them until they are ready to make a purchase. Avesdo manages the actions of buyers who are ready and able to buy a home.

Does Avesdo integrate with our current software?

Yes. Avesdo integrates with CRMs, ERPs and other real estate software providers. We have an open API that allows us to work with each provider based on their needs and the needs of your own administrative and reporting teams, including real-time implementations, specialized reports or hosted data warehouses. Discuss integrations with our team.

How long does it take to adopt Avesdo?

This is an area of great pride for us. Avesdo was built by real estate professionals, so onboarding is both quick and thorough. You will find familiarity in our workflows, just optimized for a digital world. In fact, we generally reduce the number of steps you are used to making, allowing you to write contracts in less than a minute!

Training is complimentary, and our documented Client Success process ensures that all of the different members of your team are comfortable using Avesdo long before your sales program starts.

How is Avesdo different from other software providers?

We’re highly experienced real estate professionals, and we used that to build industry-specific software. Not the other way around.

A large portion of our sales process is spent educating our clients on how best to take full advantage of the Avesdo platform. There are many ways for you to leverage the over 300 data points captured on each transaction, and so we focus on helping you with the bigger picture, not just selling you the software.

Perhaps most importantly, however, is that our pricing model is different from any other software out there. We actually align with the way that you sell. Instead of locking you in with up-front, recurring annual or special user fees, we charge on a transaction basis and only when a home sells. There is absolutely no risk in trying Avesdo on your next project.

How does Avesdo benefit realtors and buyers?

Our clients are developers, builders and sales teams, but the majority of our users are actually buyers and realtors. With over 15,000 annual transactions, a huge number of them have used the Avesdo TMS to successfully buy their next home.

Realtors and buyers benefit from our paperless workflows, allowing them to sign contracts and amendments in the comfort of their own home. More importantly, our secure and online portal stores all required documentation in one place so that realtors and buyers can easily find their paperwork when they need it. This is particularly important for realtors who are working with multiple buyers at the same time. Log in to Avesdo, and once authorized, you can see all of the respective documents that have already been signed, as well as those still requiring a signature. Easily send those to your buyers for digital completion. No more scrambling to find papers on your desk!

To talk to a member of our team, connect with us here.

The post FAQ: Answers for real estate developers, builders, sales teams, brokerages and real estate agents. appeared first on Avesdo.