Feb
28

My Problem With The Internet As It Pertains To Real Estate

My problem with the internet as it pertains to real estate is this: It’s making consumers lazy which leads to very poor decision making. How? It makes people believe the process is very easy (it isn’t), that cash-back is a bonus that everyone should get (they shouldn’t) and that a couple of clicks here or there and there we go, you found a house (it doesn’t work that way):

One very prominent and web-fancy-shmancy website which I won’t name claims that the Realtors on that site are “top agents” from the “best brokerages”. How can this be? How can Realtors who pay to be on the site, and pay part of their commission back for a purchase made, be “top” agents? Really? It’s that simple? Well heck, then anyone with a pocketbook can be a “top” agent, no? What I like about this site is the wealth of information it is giving us. What I dislike is it makes naive consumers believe that the agents on there represent their best interests, when in reality, this may not be the case.

Another website just launched focuses solely on schools and their importance when searching for a home. I know countless of buyers who are looking for the best school zones mixed with many other factors such as commute times, value for money, walk-scores, safety, ... and the list goes on. Here’s the rub, though; How can one single Real Estate Team of only three Realtors even come close to scratching the surface of covering all of those above criteria in a mass market this big:

Do you realize that Toronto is 630 km2? Do you think only three Realtors will provide the necessary knowledge to cover each and every single area of a city this big?

So when…

Feb
05

5 Things I Tell You (Response To Moneysense)

I love Moneysense magazine because of how clear and concise the writing is. Their real-life examples strike a chord with me as it’s very easy to learn from other people’s mistakes and triumphs. However I take issue with their recent article 5 Things Your Mortgage Broker Isn’t Telling You and would like to take this opportunity to respond point-by-point:

1. Commission Is My Friend.

Well, duh. This is what I do and it’s how I get paid. However when someone asks me how much I make on a deal or how I get paid, I’m always upfront with them as I will be with you.

The longer the term, the more I make.

The lower the rate, the less I make.

That’s about the size of it. I promote lenders not because one pays me .1% more than the other. For example an average 5-year fixed rate mortgage with no discount will give me approximately .8% commission. So on $350,000 I will make .8% of that, or $2800 LESS fees (I pay for most appraisals, I have desk fees, association fees, file fees etc). This is my gross pay. A .1% difference will mean I’ll earn a paltry $280 more. Is it worth it? NO. Not if the deal doesn’t make sense to the client. Only a fool would take this approach if you ask me (and there are many fools in the mortgage broker community).

2. I Don’t Actually Work With 40 Lenders.

This is true. I don’t even know if in my world (the GTA), there are 40 lenders. Well, if you take into account the private world then yes, there are probably 40,000. But 40 Type-A lenders? Let me rhyme off a list: CMLS, Merix, Street…

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