Thursday, February 28, 2013

Feb 28, 2013


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Thurs Post #1: MAC Marketing Solutions president Cameron McNeill issues apology at CHBA-BC awards ceremony. Public and media still wait for an accounting

Every year the Canadian Home Builders' Association of BC (CHBA-BC) produces an annual awards program they call the Georgie Awards. It's an industry shindig to celebrate excellence in home building.

Says the CHBA-BC
Entrants and finalists exemplify the high caliber of expertise and hard work that is associated with CHBA-BC member companies.
Earlier this week the 2013 awards were handed out and a number of employees from the disgraced MAC Marketing Solutions were up for recognition.

Talk about your awkward situation.

It prompted the CHBA-BC to issue this statement on the MAC Marketing fiasco (click on image to enlarge):

The CHBA-BC was keen to stress that:
"the Georgie Awards® won by MAC Marketing Solutions were for projects not related to the recent news reports."
MAC Marketing president Cameron McNeill got up at the ceremony and made a speech/apology to the assembled throng.  You can listen to that speech here.  

This is what McNeill had to say:
… and what has ensued since then is, ya know,despite the fact that the media started to die down, it's had a chance for me to have a lot of self reflection and to really scrutinize, ahh, ya know our, our moral compass as a company. 
And, ahhh, I think it's really important to, ahh, for me to, ahh, to understand that. And today, I'm, ahh, I'm incredibly proud of of a MAC team of about 25 people here, ahh or 20 people here, this is my 20th year at the Georgie Awards and ahh, I've had, an incredible outpouring of support from people in the industry, ahh, the Canadian Homebuilders Association. I'm very, very, very proud of this industry and our place in it.

And despite the fact that our reputation has been bruised, our morale character remains steadfast and I'm so proud of that. 
I think I owe the entire industry an apology, and the media an apology, for any embarrassment that this may have caused, and any hardship that may have happened as a result of this, ahh, unfortunate incident. However, umm, I think it's really also important for us to use this as a celebration of the, uhh, high standards that we share as an industry, and that I know MAC represents. 
And, ahh, it is now my job, more than ever… excuse me, i'm (illegible) a little here, it's my job more than ever to, ahh, ensure, and it's MAC's job more than ever to ensure, that this never happens again. So thanks for giving me a moment and, ahh, good luck to everyone tonight.
McNeill says he thinks he owes the entire industry an apology and the media an apology.

We agree.  Although we would add that he also owes the public an apology too. And the proper forum for that apology is a press conference that addresses the unanswered questions about exactly what happened, who was involved and what has been done.

CHBA-BC may be satisfied with the response by MAC Marketing, but they are the only ones.

And since McNeill is clearly willing to speak publicly about the issue, it's now time to provide that accounting.

(hat tip derp for the audio)


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Wednesday, February 27, 2013

Fake condo line ups, fake press photo ops, fake buyers... and now fake houses?- Updated

We've spent a lot of time this month covering the shenanigans of the local real estate industry.
  • We've told you about fake condo line ups (wherein ads appeared on craigslist for people to stand in line for condo pre-sales).
  • We've told you about fake press photo opportunities.
  • We've covered incidents where realtors have been caught posing as fake buyers.
But has it stooped so low that realtors are now faking the very existence of the house that is for sale?

For the past couple of days the blogosphere has been talking about what appears to be the latest example of deception in the media (hat tip Many Franks).

Over the weekend, the Vancouver Sun carried a story about the most expensive home currently listed in Canada. It is located at 3810 Marine Drive in West Vancouver.

Google the story and you will find the two google links in the image above.

If you clicked on them on the weekend, they would have lead you to this story (this version was in the North Shore News):

Attached to the story was this picture gallery showing you this gaudy home, presumably for sale on this property:

Go through the gallery and you will see these images.  Each picture has a description of what you are looking at and the website of the listing realtor:

There's just one problem, there's no such house on this property.

Don't misunderstand, the property at 3810 Marine Drive exists - and it is for sale.  But the house in these pictures does not exist.  All of these pictures are fake in that they do not represent anything at this property.  

Here is what is really there:

It's a 50 year old tear-down rancher/bungalow.

How on earth do you justify showing pictures of a Versailles-style mansion in place of a 50 year old tear-down house?

When the Vancouver Sun was alerted to the fact the pictures were of a house that didn't actually exist on that property, the Sun promptly removed their article and issued this statement:
The Vancouver Sun last week published a story and photo gallery online about a West Vancouver waterfront home at 3810 Marine Drive listed for $38 million. The Sun has since learned that the photos on the listing realtor’s website are artist’s renderings and not photos of the actual home on the property. The home on the property is a rancher/bungalow built in 1964. Realtor Laura McLaren says the images on her website depicting a mansion “are renderings of what could be built on this property.”

So how is it that the Vancouver Sun came to publish this article and these pictures? Clearly when they learned the mansion did not exist, they removed the article and the photos.

Were they duped? And if so, by who?

If you go to the realtor's site, the Vancouver Sun is correct...  the house is a featured listing on the realtor's website, complete with these photos:

And nowhere in the description that we could find does it say the house isn't really there; that the photos are "renderings of what could be built on this property."

(note: the ariel photo of the rancher/bungalow is included with the photos of the Versailles-style mansion in the listing on the realtor's site)

But as Many Franks said, "Of the 19 images on the realtor’s website, two thirds are total fiction. There are only two photographs of the actual house you’d get with your $38 million. None of the interior fantasies include any indication that they don’t really exist."

Even if the press came across the listing on their own and published their story without any prodding from someone in R/E, what the hell is going on in the real estate industry?

Is it not a deception to list this property with these pictures without clearly indicating that the fictitious house isn't really there? Doesn't transparency demand at least a prominent notation that the house pictured in the majority of the listing photos does not exist?

Certainly the lack of transparency fooled the Vancouver Sun into running this story!

Was the whole purpose of the fake pictures a means to garner free advertising as the media runs this as a "news story"? Would any media outlet have run this story without those pictures?  We think the fact the Vancouver Sun promptly removed their story when they learned the house didn't exist speaks volumes.

How is it that the Real Estate Council of BC stands by and seemingly allows the public/press to be continuously mislead?

There are supposedly over 11,000 realtors in the Lower Mainland alone.  But the reputation of the majority is being significantly tarred by a few.

Allegations of media manipulation like the ones we have covered this month should be throughly investigated and serious wrongdoing should result in expulsion from the profession, plus hefty fines.  And the results of those investigations should be widely publicized.

The integrity of the industry is at stake here.

Is anyone looking out for the public in all of this?

I would love to hear the personal thoughts of some of the realtors out there in the comments section of this posting.


UPDATE: The listing on the homepage of the realtor has now been modified and all the "fake" house pictures have been removed with the exception of the one exterior pic.  That single exterior pic used to be the lead pic for the listing, now it is not (it's number 7 in the thumbnails below).  Still unclear why that one pic is even there to begin with.


UPDATE 2: The "fake" house image on the listing on the homepage of the realtor has now been modified to indicate it is an image of what 'could' be constructed on the property.


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Tuesday, February 26, 2013

BIV Magazine reports both MAC Marketing Solutions and Key West Marketing under investigation by Real Estate Council of BC

Business in Vancouver Magazine is reporting today that not only is MAC Marketing Solutions being investigated over allegations of media manipulation, but so is Key Marketing Inc.

In a piece titled: Real-estate marketers investigated over allegations of media manipulation, reporter Glen Korstrom updates the MAC-gate incident:
The Real Estate Council of British Columbia (RECBC) is investigating a series of incidents in which Metro Vancouver real-estate marketers have allegedly duped media to spur sales and inflate the perception of demand for real estate projects.

The RECBC regulates the real-estate marketing industry and has the power to suspend licences, cancel licences, reprimand and impose fines of up to $20,000.

Its most recent investigation involves MAC Marketing Solutions and a charade that at least one of its employees executed on February 8. MAC owner Cameron McNeill publicly apologized for an employee who pretended in television interviews with CBC News and CTV News to be a customer.

The employee and another woman posing as her sister claimed they were both daughters of wealthy Chinese parents who wanted to celebrate Chinese New Year by buying them a Vancouver condo as a present.

McNeill then conducted an internal investigation that prompted the departure of a senior manager, he told Business in Vancouver.

McNeill would not name the senior manager nor say whether he fired the employee or if he or she resigned.

“Some poor judgments were made and those poor judgments led to unfortunate circumstances,” McNeill told BIV February 20. “I’m not going to say that my investigation is finished entirely, but I have a much clearer picture.”
Korstrom then tells us the RECBC has taken up an investigation into the activities of Key West Marketing and former MAC Marketing partner Cam Good:
RECBC is also investigating two incidents of alleged media manipulation perpetrated by Key Marketing Inc., according to RECBC spokesman Tyler Davies.

Key principal Cam Good, who like McNeill is a past BIV Forty under 40 winner, denies that either of the incidents were indeed “similar deceptions.”

The first incident involved a February 2011 helicopter tour of White Rock that Key organized. Good issued a news release at the time that urged media to view and meet a “a group of Chinese realtors” as they took a helicopter tour of nearby real estate projects. Media outlets reported that the realtors represented overseas clients.

But it later was revealed that the realtors, who were of Asian descent, were based in Metro Vancouver. It was not clear if they had any potential clients based in Asia.

“There was no deception,” Good told BIV in an email. “There was never any misrepresentation about what was being done or who they were.”

The second RECBC investigation into Key involves an April 2012 incident in which a Global TV story about CONDOday Events Inc. identified Key sales manager Tara Fluet as an investor.

CONDOday is a company that Good owns separately from the Key. The two companies share office space and some human resources.

CONDOday hosts Groupon-style deals for investors who are given a short window of time to buy a home in order to reap a substantial discount.

Good said Fluet regrets not disclosing that she was a realtor and that she works for CONDOday’s sister company.

“Tara apologizes for this lack of transparency,” Good wrote in the email. “It was [a matter of] an off-duty salesperson from a related company stopping by an event to check it out and happy to answer questions when asked. 
It wasn’t intentional media manipulation. 
If anyone has anything they would like to pass on to the RECBC, the complaint page is here and their contact info is here.

Korstrom also notes overall real estate industry sales are tanking and gets this take from the MAC president:
In the heady days before the economic downturn, MAC Marketing’s annual sales neared $1 billion, second in Vancouver to Rennie Marketing’s approximately $1.1 billion in sales.
Sluggish real-estate sales, however, have reduced all real estate marketers’ sales targets and made the sector more competitive.

“I like this market,” MAC principal Cameron McNeill told Business in Vancouver. “It’s one where balance and execution creates stronger results. I like a balanced market where developers who can execute well, and [marketing] companies that execute well, can outperform.”

Despite the recent embarrassment of having to publicly apologize and undergo a Real Estate Council of British Columbia investigation into a situation where an employee pretended to be the daughter of a wealthy buyer, McNeill remains upbeat about the future.

“Character is who you truly are,” he said. “Reputation is how people perceive your character. I remain steadfast in our strong moral character.”

He now shies away from quantifying each year’s total sales, but he said that MAC consistently sells more than 1,000 homes each year and employs about 100 staff, including 60 brokers, or “MAC Engine” members, as he prefers to call them.
Kudos to BIV, and reporter Glen Korstrom, for following up on this story.

We'll keep you updated on any further news we come across.


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Monday, February 25, 2013

Vancouver's Chinese New Year (CNY) real estate sales plummet 70%. What was it MAC said before CNY?

Above is the front page headline of the top North American Mandarin newspaper, the World Journal.

The World Journal is a daily Chinese language newspaper serving overseas Chinese in North America. The newspaper has its headquarters in Whitestone, Queens, New York City and is published in major cities containing large Chinese-speaking populations.  These include Atlanta, Chicago, Boston, Los Angeles, New York, San Francisco, Houston, and Washington, D.C. in the United States as well as Toronto and Vancouver in Canada.

VMD of Vancouver Condo Info tells us today's headline, in big, bold letters state: "Vancouver Chinese New Year RE Sales Plummet 70%"

This follow's yesterday's headline from a local Vancouver Asian paper that screamed: 70% Drop in Home Sales Since Chinese New Year.

(Note: the google translation of yesterday's article incorrectly translates the figure 70 as a 7. The news article  does actually call it a 70% drop.  The change in numbers is a google error).

As you can see, the story is gaining wide attention in the Chinese community. 

Wasn't it just on February 7th, 2013 that the Vancouver Sun was telling us how "Realtors prepare for Lunar New Year Upswing in Sales"?

In fact it was Cameron McNeill, president of the recently disgraced MAC Marketing Solutions, who was quoted in the article:
McNeil said his salespeople are seeing an increase in activity, including from Chinese buyers. “To me, (Chinese buyers) are a leading indicator,” McNeil said. “What I mean is, when Chinese buyers are active, it is a little bit of a bellwether (for the overall market), and the Chinese are active.”
Of course it was only two days after this article that some of McNeill's employee's staged their infamous media deception to create the impression that Chinese buyers were still queuing up to buy into Vancouver's teetering real estate market.

So it begs the question... if the Chinese buyers are a leading indicator - a "bellwether" for the overall market - and Vancouver Chinese New Year real estate sales just plunged 70%; is the overall market in Vancouver in grave danger of plunging significantly?

Perhaps this is why some of MAC's employees were so desperate to fake the presence of active Chinese buyers?

One final thought.

Why is it we are reading about these stunning Vancouver real estate statistics exclusively in the Asian language press and not in the English speaking press?

(hat tip VMD and goku3)


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Sunday, February 24, 2013

MAC-gate helps expose the myth of HAM (Hot Asian Money). Early stats show Chinese New Year a sales disaster

One of the side bonuses to the MAC-gate scandal has been the exposing of the myth of HAM as something that is going to keep our housing bubble afloat.

The media has been quick to identify the main reason for MAC's media lie - perpetuating the import of the Chinese property buyer.

The deception was intended to create the impression that Chinese buyers were still queuing up to buy into Vancouver's teetering real estate market, which has long been fuelled by money from China and is now rated as the second least-affordable city in the world, behind Hong Kong, according to the Demographia consultancy.
(Note: the google translation incorrectly translates the figure as a 7% drop. The news article does actually use the number 70%.  Not sure why google turns a 70 into a 7).

... to an article in yesterday's Globe and Mail newspaper titled: There’s scant evidence behind the myth about foreign buyers of Vancouver real estate.
While the stunt was roundly slammed, it also reignited a debate among real estate observers: Just how much truth is in the long-standing narrative that foreign money is driving the local market? Anecdotes abound about foreign investors scooping up Metro Vancouver real estate, driving up prices and creating anxiety among locals – a bogeyman haunting the dream of home ownership – but evidence to support such a claim is scant.
... the word it out.

Don't get it wrong, all rumours have some basis in fact and the myth of HAM is no different.

But the excessive manipulation of this myth has been a criticism of the online community for years.

Garth Turner has spoken about it lots beforeand railed against the deceptive media ploys that have been used:
As many people now know, Amanda is a young administrative marketing assistant at MAC Marketing Solutions in Vancouver, a company developers hire to flog condos to the rabble. She crossed the ethical line last week when the company tried to (once again) milk the incredibly lazy, gullible and bush-league Van television media...

Of course, this is not the first time. In 2011 you might recall Cam Good, head of The Key – another house-flogging, Van-based professional pumping outfit – hiring a yellow helicopter to ferry around “Chinese investors” with three TV crews stuffed into the back of the chopper. The intentional buzzing of defenceless places like White Rock was intended to goose the myth of HAM – Hot Asian Money – and feed the meme that legions of oriental Donald Trumps were about to gobble up the region, pricing the locals out forever.

But as this blog pointed out days after Global and CBC ran their yellow peril stories, the Chinese dudes were actually Canadian realtors from the burbs, posing as rich vultures from Guangdong. Mr. Good’s company also tried to pass off an employee as a consumer in a weird scheme that brought the Groupon concept to selling condos.
And there have been many condo marketing ploys besides these. How about the fake condo sale line ups to create the media and buying frenzy?  As Turner notes:
People (Asians, preferably) were offered money, plus lawn chairs, portable heaters, food and porta-potties to camp out in from of a sales centre for 24 hours prior to opening. TV news crews were invited to come and witness the spontaneous news event and the stories they ran begat longer lines, people being the lemmings they are.
Turner originally covered this story in Feb, 2011 and we followed up on February 17, 2011 (with citations from numerous craigslist ads by VREAA).

The selling period associated with Chinese New Year (CNY) for 2013 is now coming to an end and statistics are proving the fabricated hype is once again just that: a fabrication.

The dedicated contributors to the comments section of Vancouver Condo Info show us the reality.

In the supposed HAM hotbed of Richmond there are 399 homes on the market with an asking price of over $1.4 million. That's a MOI (months of inventory) of 28 months!  There are 65 homes on the market asking over $2.4 million.  Only 15 such homes have sold in the past 12 months meaning there is a stunning 52 MOI!

Contributor VMD shares with us this translated Chinese news article revealing that there has been a 70% Drop in Home Sales Since Chinese New Year.

Contrary to what the condo marketers were telling us, there actually was no rush of buyers coming into the market this Spring. The CNY sales period has been a disaster.

As Garth Turner observes, there have been lots of high-end houses bought by people who made their money in Mainland China, and that will continue. But many of the realtor shenanigans portrayed in our local media as 'news' are nothing more that the work of shrewd marketers out to create anxiety and competition amongst local buyers.

This time one of those marketers got caught.

In the coming weeks it's crucial that the governing bodies that oversee the integrity of the real estate industry take severe and strong action to ensure these "dishonest tactics" aren't used again.

The people of Vancouver deserve nothing less.

(hat tip: yvr2zhr, VHB, VMD, VREA, Vancouver Condo Info)


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Friday, February 22, 2013

MAC Marketing scandal makes headlines in Hong Kong

Locally, the MAC Marketing Solutions scandal has dealt the real estate industry a black eye.

And now the story is gaining attention overseas.

A senior executive at a Vancouver marketing firm was forced to resign after employees of the company were caught posing as the daughters of rich Chinese property buyers in interviews with TV reporters.

The deception was intended to create the impression that Chinese buyers were still queuing up to buy into Vancouver's teetering real estate market, which has long been fuelled by money from China and is now rated as the second least-affordable city in the world, behind Hong Kong, according to the Demographia consultancy.
(hat tip: southseacompany)

For BC's real estate industry it's a black eye they just don't need right now. The Hong Kong paper is even reporting earlier events of media manipulation and fake Asian buyers:
It's not the first time that spurious reports about buyers from China have been used to hype the Vancouver property market. In one incident in 2011, a local marketer tipped off TV reporters that a group of property buyers from China were taking helicopter tours of the region to spot potential purchases. It was later revealed that the "Chinese investors" in the report were in fact Vancouver real estate agents of Asian descent.
Combine this with confirmation that Vancouver's housing bubble is in the process of deflating:
The average price of a detached house in the core district of Vancouver West topped out at C$2.25 million (HK$17.13 million) last May. It has since fallen by more than 11 per cent.
And the impact on the industry is incalculable.


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Thursday, February 21, 2013

Thur Post #2: Huffington Post states MAC Marketing Solutions being investigated for "dishonest tactics" - Updated

Update: Paragraph on Nic Jensen clarified

Earlier today the Huffington Post published their story on the MAC affair.

Titled MAC Marketing Solutions Manager Quits After Fake Investor Scandal, the Post states that the BC Real Estate Council (BCREC) is investigating MAC for "dishonest tactics."

This follows up on the notice being sent out to all real estate agents in BC, an indication of just how seriously the BCREC is treating this issue.

Sources indicate the BCREC is in the process of visiting all of MACs sales centres to "evaluate business practices" as part of their investigation. We are told this is standard practice with all large investigations.

Meanwhile there is speculation that the manager who quit is Nic Jensen.  Regarding the internet sources linking him to Amacon Development it appears Jensen may have recently joined MAC as either a VP or a senior manager. Media outlets advise they are seeking clarification from MAC.

A curious development on the MAC Facebook page.

In a response to the statement of MAC president Cameron McNeill, which was posted yesterday on MAC's Facebook page, a poster by the name of 'Ponzik Xenon' appears to allege that there may be efforts afoot to organize a class action lawsuit on behalf of purchasers who have already bought in the complex.

We're trying to confirm whether there is any validity to this claim.


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Thiur Post #1: MAC Marketing president Cameron McNeill attempts to substitute an email in place of a formal press conference to account for media fraud

Almost a week after the MAC Marketing Solutions media manipulation story first broke in the press, MAC president Cameron McNeill has finally addressed the issue.

In a posting to the company's Facebook page, the president issued this statement:

McNeill says:
For over ten years, MAC Marketing Solutions has strived for excellence built on a foundation of honesty, integrity and professionalism. This was rocked 10 days ago when poor judgment resulted in an inappropriate and uncharacteristic incident. I apologize for that incident and pledge that nothing like this will ever happen again at MAC. Having had the opportunity to assess the situation I have taken decisive actions. Although it will take time, we hope that we can earn back our good reputation and your trust. This situation has been difficult for everyone and as a company, we will learn from this, grow stronger and be better for it.


Cameron McNeill
President, MAC Marketing Solutions
Business in Vancouver Magazine (BIV) was the first to go to press with the announcement which was fortuitous for them because they, at least, were able to talk to the embattled condo marketer.
A senior manager at MAC Marketing Solutions has left the company in the wake of a scandal that involved the company's employees pretending to be daughters of wealthy Chinese parents who wanted to celebrate Chinese New Year by buying a condominium.

McNeill would not name the senior manager nor say whether he fired the employee or the person quit.

"Some poor judgments were made and those poor judgments led to unfortunate circumstances," McNeill told BIV earlier today.

"I'm not going to say that my investigation is finished entirely but I have a much clearer picture. There's going to be more things that may come to light but I've spoken with everyone on the site that day and I have a much clearer picture of what transpired."
What makes BIV's article significant is that it is the only place you will see McNeill say, "I'm not going to say that my investigation is finished entirely... there's going to be more things that may come to light."

Certainly the Facebook statement gives you the impression his investigation is finished. In fact to read it you are left with the impression that the matter is over, dealt with... and now it's time to move on.

Is that why McNeill didn't even hold a press conference for the two television stations his employees deceived? McNeill simply notified them about his findings via email.

CBC-TV reporter Matthew Black tweeted:
In an email to CBC, MAC Marketing owner Cameron McNeill writes he implemented "appropriate actions" vs employees who duped media and that he accepted the resignation of a "MAC senior manager." But, McNeill won't comment on specifics, citing privacy concerns.
Naturally the Fourth Estate is a little stunned here.  McNeill's statement is far from an adequate explanation.  As Matthew Black commented in another tweet:
Statement from MAC Marketing doesn't elaborate on what "decisive actions" it took, or who was fired/resigned after duping media.
And considering it was the media who was duped, and by extension the public, McNeill's statement is sorely lacking.

In the meantime, let's look at what we have been told. Who was the senior manager "fired/resigned"?

Was it MAC's Melanie Briggs?  Doubtful considering a 'Linda Briggs' liked the announcement on Facebook:

Was it Nic Jensen, originally identified in the CBC-TV story as working for MAC Marketing?

Doubtful, because it appears the media got his association with MAC wrong.  Search 'Nic Jensen' and scores of references come up identifying Jensen as manager of sales and marketing for Amacon Developments.  The internet is full of stories detailing partnerships between Jensen and McNeill.  Jensen is even identified on the MAC website as having been a presenter on behalf of Amacon at the 2012 Golden Cube awards.

Kinda hard to believe a non-employee resigned.

That only leaves the blonde woman who conducted the sales tour of the display suite with "the girls":

Is she a senior manager with MAC Marketing?

Regardless of who the senior manager is, the mere fact one was fired/resigned raises a hornet's nest of other questions.

It appears to be an admission that "the girls" didn't act on their own.  Is McNeill saying "the girls" were ordered to participate in this charade for fear of losing their jobs?

If not, what are the repercussions for them? If they weren't ordered, it confirms that there was a group of people perpetrating this fraud.  And just because one senior manager has resigned, the issue is far from over.

As Arnold Shuchat noted in our comments section yesterday, the Real Estate Council of BC (RECBC) is investigating this issue:

Real Estate Council Investigates Condominium Marketing Complaints

Real estate licensees may be aware of recent media reports with respect to the marketing practices of some real estate licensees involved in the sale of condominium developments. The Council is currently investigating these matters to determine whether or not the activities reported on may constitute breaches of licensees' professional obligations under the Real Estate Services Act.
I doubt the RECBC will be as quick to absolve the actions of Amanda Lee, the fictitious Chris Lee, the blonde sales lady and Nic Jensen (who despite being from Amacon still participated in this charade).

Neither will the Federal Competition Bureau of Canada (and we are still attempting to confirm they are actually investigating this complaint as described yesterday).

But it's the Fourth Estate, the news media, who will probably be the first to ask for a more detailed accounting.

The Vancouver Sun got the email story to press right away, but I doubt CBC-TV and CTV-BC will be as willing to allow an email/Facebook posting to serve as MAC's accounting of events.

For anyone to believe that betrays a profound under-appreciation of the false and misleading representations sections of the Federal Competition Act.  Reading the various maximum penalties they can levy gives you a sense of just how serious this is:

And given their involvement in this scandal as the ones who were duped, it's hard to believe the TV press is simply going to walk away from this story because MAC sent out an email.

If they did, can you imagine how bad they would look after the fact?


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Wednesday, February 20, 2013

MAC - gate: Federal Competition Bureau of Canada to investigate MAC Marketing Solutions?

An interesting development in the scandal known as MAC-gate.  A post has appeared on the MAC Marketing Solutions Facebook page that says:

It appears Chris Bullard has been advised by the Federal Competition Bureau of Canada that they have commenced an investigation concerning the fake buyers news story perpetrated by MAC Marketing Solutions on February 9th, 2013.

Quoting the Bureau: "The Bureau takes all allegations of false or misleading representations and deceptive marketing practices seriously."

Now lest you think the Federal Competition Bureau is a toothless organization, they have the power to levy fines of up to $10 million to an organization and up to $750,000 to an individual.

Here are some of the fines levied in 2012 and 2011 for false or misleading representations (click on images to enlarge):

Now as you will recall, there appears to be a number of MAC employees who colluded to perpetrate the story of the fake buyers. Whether or not actual collusion existed will be up to the Bureau to determine.

We also looked up the term 'conspiracy' on wikipedia:

Wiki says:
"A conspiracy may also refer to a group of people who make an agreement to form a partnership in which each member becomes the agent or partner of every other member and engage in planning or agreeing to commit some act. It is not necessary that the conspirators be involved in all stages of planning or be aware of all details. Any voluntary agreement and some overt act by one conspirator in furthance of the plan are the main elements necessary to prove a conspiracy."
This could turn out to be one very interesting investigation.

(NOTE: Due to some inappropriate comments, comments will now be moderated before being posted)


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Tuesday, February 19, 2013

Is it any wonder you are seeing manipulation of the media by some in the real estate industry?

On of the most important stories that is not making it into the mainstream media is the breadth and depth of the unwinding of our current housing bubble.

We hear hype about 'flat' markets and how sellers are refusing to lower their prices, but it's real estate industry obfuscation.

On February 8th, we showed you how Vancouver is 8 months into a market collapse. 8 months ago Vancouver hit's it's market highs using the MLS HPI. 

Since then it has dropped dramatically.

What is particularly chilling is that when you compare Vancouver at the 8 month point into the unwinding of our housing bubble with the 8 month point of US cities like Phoenix, Los Angeles, San Diego, Washington, Miami, Tampa Bay, Chicago, Boston, Minneapolis, Las Vegas, New York, Portland, and Seattle... you discover that Vancouver has plunged faster than all those other cities did - with the exception of Miami.

No wonder condo market companies are so desperate to fake images of Asian buyers lining up to buy in Vancouver!

Over on the blog Vancouver Condo Info, frequent contributor yvr2zhr provides some shocking statistics on the state of our current market.

Here are some single family house Months Of Inventory (MOI) projections for February, 2013 as of last weekend:

West Van – 24 MOI
Richmond – 14 MOI
Burnaby South – 12 MOI
Port Moody – 12 MOI
Van West – 11 MOI
Maple Ridge – 11 MOI
Tsawwassen– 10 MOI
Burnaby East – 8 MOI
Ladner – 7 MOI
Coquitlam – 7 MOI
Van East – 6.5 MOI
Burnaby North – 6 MOI
New West – 5 MOI
North Van – 4.5 MOI
Port Coquitlam – 4 MOI
Total Real Estate Board of Greater Vancouver – 9 MOI

Sales volumes have plunged and inventory is piling up.

How bad is it?  Instead of comparing sales volumes to just last year, yvr2shr compares sales volumes to 2011.  And when you do, you see single family house (SFH) sales volume is down significantly everywhere.

On the west side of Vancouver, volume is down - 61%
In Richmond sales volume is down – 69%
East side of Vancouver is down – 52%
West Vancouver volume is down – 75%
North Vancouver volume is down – 24%
And Burnaby sales volume is down – 56%

When it comes to house prices, yvr2zhr tells us that the middle class buyer is disappearing from SFH house sales. This is causing some changes in the mix which is pushing the average price up. Despite that, however, decreases are very significant in Van West / Richmond and West Van.  He tells us:
"prices are solidly down 10% in past 10 months. The average / median and benchmark prices are all steadily down and it is a clear trend without sales mix issues. Many sales are now occurring for 30-40% off the asking from last Spring."
The easy credit that inflated our housing bubble is being withdrawn as the Federal Government returns mortgage regulations to what they were prior to 2006.

And as that credit is withdrawn, our bubble will deflate. The R/E industry can only hide that fact for so long.


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Monday, February 18, 2013

MAC-gate: What actually happened here? It's time for a press conference to se the record straight - Updated

The more you examine the failed MAC Marketing Solutions PR media event (and subsequent media apology), the more you come away with the belief that this was a scripted, planned and practiced event.

It certainly was not the actions of one "overzealous employee", as MAC President Cameron McNeill has suggested.

Everyone has focused on the two central players in the fraud, Amanda Lee and the fictitious 'Chris Lee'. But this saga involves many more MAC employees.

What about the role played by the lead MAC representative in attendance that day, Nic Jensen?

He knew who his two employees were and he watched the charade unfold without saying anything.

And what of the blonde MAC sales representative moving the 2 fake MAC buyers through the display suite for the benefit of the press?  She knew who they were:

And who better to set it all up than Melanie Briggs, MAC Marketing PR rep and a former Global-TV Inside Entertainment reporter? CBC reporter Matthew Black says he was told Melanie was going to be in attendance, what is her role here?

And then there are "the girls" themselves.

Why are two MAC realtors, presumably at the presentation centre to sell condos, already dressed in costume as stereotypical young Asian buyers?  When the press arrives, they are milling about in the display suite, already in character and prepared to play out their role. If this was "an impromptu" action, why weren't they originally introduced to the news teams as MAC sales agents?

The most important player in this charade is the fictitious "Chris Lee". 

Her performance is nothing short of impressive:

From the excellent CBC-TV coverage of the fraud, we are told:
Kirk Williams: Matthew Black was the reporter on the story.  He asked marketing staff for help in finding Chinese buyers.

One couple didn't want to do interviews. Initially the two women were shy too.

Matthew Black: A few minutes later that story changed again and this time they were going on camera. And this is how we met Chris and Amanda.
So Chris and Amanda play coy with the press initially and then emerge to engage the waiting press in their charade. It's a cat and mouse game that certainly guarantees the press will go gently on them.  Especially if 'Chris' is nervous about the lies she is about to tell.

But 'Chris' shines in her role as an Asian home buyer:

It's a convincing performance.  Too convincing, we say. Especially since we now know it's all a fraud.

Her accent is great.  She hits all the talking points. All while under the glare of lights from two television camera crews. It's an outstanding display of calm and collectiveness while spinning her fable.  And it's all supposed to be an impromptu, ad-lib performance? 

I doubt many of the junior anchors on any of the local TV networks could display a higher level of composure during live coverage of a news event.

If this charade was ad-libed, this girl missed her calling. 

It has been five days now since the story of MAC's deception exploded in the news. It is clear numerous MAC employees were involved. MAC President Cameron McNeill has had ample time to investigate and ascertain what happened here.

It is time to end the rampant speculation on the internet by calling a press conference and providing a detailed accounting of what transpired.

McNeill owes an explanation to the media (whom MAC duped), to the broader real estate community (whose reputation MAC has irrevocably damaged), and to the general public (the ultimate targets of this fraud).

We need to know exactly what happened, who was involved, how much of it was planned and who knew about it in advance.


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