WHAT IS FINTRAC?

Ever heard of FINTRAC? If you are any kind of Real Estate junkie and like to keep up to date on all the latest news about buying and selling you more than likely have heard of this governing body. Short for Financial Transactions And Reports Analysis Centre of Canada. Their mission is to get rid of money laundering and anyone will tell you Real Estate could be one of the go to businesses to launder your off shore bucks. There are myriad rules in place about how much of a down payment is acceptable (NOT in cash of course) Anything over a certain amount must be reported. Funny thing. In the late 80s we were riding the home equity wave out of Toronto on the way to the Durham Region. We had an 18 month stopover in West Hill. One of our neighbours had a modest bungalow that they kept spotless. This was just before everything in RE came to a screeching halt (much the same as what we are experiencing now) A neighbour just around the corner related a story that he had a door knocker that asked if his home was for sale. He said no thanks, we like it here. Seems the person knocking had a problem with the answer no and came back almost weekly asking the same question. Frustrated him to no end. So finally one week when the caller came calling he said he would sell but wouldn’t take less than $250,000. 00 for the home. At the time similar homes were selling for 180-200K. He thought that would solve his problem and the so called buyer would get lost. Except the very next week the buyer showed up with an Armstrong Case containing 250K in cash. Called his bluff. So this guy said what the heck – we are moving. You couldn’t do that today, although I am fairly certain there are buyers out there that would like to be able to do that. The rules are in place to prevent just this sort of transaction from happening. Although more often than not things slip through the cracks. Like the buyer in Vancouver (off-shore buyer) that bought a $15 million dollar home for his daughter to live in while she went to school in BC. When they pressed him on the matter he was “unemployed” But had “significant cash reserves” to buy the place. Sure thing. I have the very same problem. NOT!!! When you hear stories like this it makes it easier to understand why there’s a crackdown. Fraud is a huge problem, not only in RE but right across the board. When a buyer expresses an interest in a home and wants to pay only in cash, the red flags go up. Forms must be filled out and if anything looks suspicious it MUST be reported. This protects the sellers and the agents involved. As far as the buyers go, well, looks like they will have to toe the line or face scrutiny. For any Realtors involved, if they look the other way or are complicit in any way possible, they would face huge fines and possible jail time. So if you’re thinking of a “cash only” transaction best not to bother. Could go sideways real fast.

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