Robert May - Lethbridge REALTOR ® and Mortgage Broker

<rant>

When I see things such as: "AGF Trust is offering two 5 Year Fixed Quick Close options at reduced commission rates"
show up in my inbox I cannot help but to cringe. I realize that the lenders in their limited wisdom are attempting to provide us with a tool to avoid losing business to others such as Bank of Montreal, but they are killing the industry and us by doing so.

I don't need their help to give my money away.

I don't need them to give me permission to do so.

I don't need them to try to sell me on the idea like it is some favour they are doing me.

A more proper way for them to phrase it would be: "We make millions of dollars, but in order for us to offer competitive rates, we want to pay you less"


In order for the lender to continue to make millions, either the customer has to pay more or you have to earn less.

This creates a real problem and an ethical dilemma for us as mortgage associates.

Every time you sell a mortgage you must decide, "is it more important I save this client $30/month or is it more important that I buy groceries this week?"

Who comes first, your client or your kids?

Now maybe that is a bit of an extreme way to look at things, but it is a reality for many in this industry where we have seen compensation slowly eroding, bonuses disappearing, lenders trying to steal and retain your clients, etc. Some of our peers are literally starving for business and income. The broker model is under immense pressure and it is all due to these lenders preying upon the compensation and client lists of mortgage brokers.

So what is the solution? It is all about your attitude and choices.

You're experienced, educated, and a valuable financial resource to your clients.
You can personally answer their questions, advocate on their behalf, and alleviate their stress regarding their financing.
You can share with them true stories about people who made good and bad choices, people who saved and lost money, people who took good advice and people who did not.
You meet with them on their time schedule and at their convenience, often outside business hours or even at their home.
You find them good rates, flexible mortgage products, and steer them towards sensible financial decisions.
You deserve fair and reasonable compensation for your services, so either the customer or lender needs to pay you for that. You need to know that, understand that, and act accordingly.
I would like to see all mortgage brokers stop selling the products of lenders who offer cut rate compensation. Stop believing that the mortgages that offer the lowest rate at the expense of all else are the best choice for your client, for you, and for the industry. They aren't.

FYI: The difference in monthly payment for an average mortgage between the lowest no-frills rate of 2.99% and the lowest rate from a lender who offers decent compensation and industry support at 3.14% works out to be about $30/month. The difference in the payout penalty between those two products is literally thousands. The value of the mortgage broker who shares that information with you and helps you avoid the wrong mortgage products is PRICELESS.


ps.
Do you know why the Bank of Montreal has that mortgage product on sale for 2.99%? It is because that mortgage product is SHIT and if they didn't offer it for such a cheap price then nobody would want that BMO mortgage. And you can take that advice to the bank!

</rant>

Recent studies of the US and Canadian real estate markets presents a tale of two markets on distinctly different paths. While the global economy continues to struggle, the opinions and predictions of what 2012 holds in store for the real estate market of each country is quite interesting.

The following infographic provided by Activerain, the largest internet blogging community designed specifically for real estate professionals, tells the story in a more creative and informative way than several paragraphs of boring statistics can.

Take a look and enjoy. I would appreciate hearing your comments and feedback on it.

Data provided by ActiveRain.com. Join 215,590 Real Estate Agents on the world's largest Real Estate Social Network.

Canadian home sales pull back in January OTTAWA –

February 15, 2012 –

According to statistics[1] released today by The Canadian Real Estate Association (CREA), national resale housing activity retreated in January 2012 from the strong finish reported for December 2011. Highlights: Home sales were down 4.5% from December to January. Actual (not seasonally adjusted) activity came in 4.0% above levels in January 2011, and stood even with the 5 and 10 year averages for January sales. The number of newly listed homes edged down 1.4% from December to January. With sales down by more than new listings, the national market shifted further into balanced territory.

The national average home price was up less than 2% year-over-year in January, ranking it among the smallest increases of the past year. Sales activity recorded through the MLS® Systems of real estate Boards and Associations in Canada fell 4.5 per cent from December 2011 to January 2012. This marks the first monthly decline in national activity since August 2011 and the biggest monthly decline since July 2010. The monthly decline reversed a string of monthly increases over the closing months of last year, and returned national activity to where it stood at the end of the third quarter of 2011. “The national housing market is stabilizing and remains well balanced,” said Gary Morse, CREA’s President. “That said, forecasts for economic and job growth going forward vary widely for different parts of the country, suggesting a possible continuation of a softening trend in some markets, as well as the potential that demand will pick up based on strong fundamentals in others. All real estate is local, so talk to your local REALTOR® to understand how price trends in your neighbourhood are shaping up.”

Activity was down in over half of all local markets in January from the previous month. Led by declines in Greater Toronto and Montréal, demand also softened in a number of other major urban centres including the Fraser Valley, Calgary, Edmonton, Winnipeg, Ottawa, and Greater Vancouver. Actual (not seasonally adjusted) national sales activity was up four per cent from year-ago levels in January, the smallest year-over-year increase since last May. As was the case in a number of months last year, actual sales in January 2012 stood close to the five and ten year average for the month. The number of newly listed homes edged down 1.4 per cent on a month-over-month basis in January following a 2.9 per cent increase in December.

The monthly decline in new supply reflects a drop in new listings in a number of Canada’s largest urban centres, which offset a jump in new listings in Vancouver. Sales fell in January shifting the national market back towards the mid-point of balanced territory and reversing the recent trend which had seen the market becoming tighter over the final four months of 2011. The national sales-to-new listings ratio, a measure of market balance, stood at 53.8 per cent in January, down from 55.5 per cent in December and 55.4 per cent in November. Based on a sales-to-new listings ratio of between 40 to 60 per cent, 60 per cent of local markets were balanced in January. Compared to December, there were fewer buyers’ and sellers’ markets, and a greater number of balanced markets. The number of months of inventory stood at six months at the end of January on a national basis, up from 5.7 months in December 2011 and returning it to where it stood in October 2011.

The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and is another measure of the balance between housing supply and demand. The actual (not seasonally adjusted) national average price for homes sold in January 2012 was $348,178, representing an increase of 1.2 per cent from its year-ago level. This ranks among the smallest increases since late 2010. On a seasonally adjusted basis, the national average home price rose 1.6 per cent on a month-over-month basis, marking a rebound from a decline of similar magnitude in December. This pattern mirrors the one playing out in the newly-launched MLS® Home Price Index (HPI), published on February 6. “Year-over-year comparisons in the national average price are expected to become volatile and may turn negative, reflecting average price developments in the first half of 2011 in Vancouver,” said Gregory Klump, CREA’s Chief Economist. “At that time, high-end home sales in Vancouver’s priciest neighbourhoods surged to all-time record levels, which skewed the national average price upward considerably. A replay of this phenomenon is not expected this year. As a result, comparisons for national average price to year-ago levels over the coming months will reflect an upwardly skewed base effect. For this reason, year-over-year comparisons should be kept in perspective. Developments in the MLS® HPI will provide important guidance on price trends, since it is not affected by the problem of compositional shifts in the mix of sales activity.”

The MLS® HPI also takes into account the contributions toward the price of a home made by a broad range of quantitative and qualitative housing features, allowing it to track Canadian home price trends better than any other measure.

Wow, I have been so busy the past while helping others with their business that I have neglected to spend adequate time on my own business it seems. Crazy that this is exactly what I tell others to avoid doing. So what is one to do but get right back at it and to pick up where they left off. This is a far better choice than avoiding getting back to business and using your procrastination as another excuse to continue to avoid things.

So without further delay, I am back. I have tons of great things to share and lots of new developments in the past few months. I look forward to uploading them onto my blog here and my outisde blog on Lethbridge real estate. One of the quick things I would like to mention is that I have a friend who is joining AR right away and launching a website and possibly an outside blog on Calgary real estate. Keep an eye on her website and see it launch in early 2012.

I plan to spend the next few hours catching up on my reading and seeing what my AR friends have been up to.

Lethbridge real estate

Prices in Lethbridge are still under downward pressure. Housing inventory in the City remains above normal and sustainable levels. Today's activity through the real estate board included:

September 27, 2011 Activity at Lethbridge Real Estate Board

24 New Listings

6 Conditionally Sold listings

5 Cancelled Listings

6 Sold Listings

24 Price Changes

In summary, an increase of only 6 new listings and 24 price reductions, however when that happens day after day in the local real estate market, it has a cumulative effect that is enormous.

As we head into our winter season in the near future, sales start to drop dramatically in Lethbridge real estate. The influx of sellers also slows, but not as much as the buying dries up. I expect to see the housing inventory continue to remain well above average in numbers and expect to also see many more price reductions coming on a daily basis. The market does not care how much you paid 3 years ago, how much you owe on your mortgage, or how much you want to get in your pocket.

Only serious sellers who price their home properly will see it successfully sell before it slips farther in value. So price it right people and hire yourself a real estate salesperson who does more than blow smoke up your butt and make excuses why they spend more time trying to get your to reduce your price instead of actually trying to sell your houses. Price it right and it will sell!