Mastermind for February 15th. Property Shelf Life. Our Responsibilities and Asking For Business
One thing about our Mastermind sessions; they are never boring. This week we were happy to share our learning with some agents from our Merton office. So, if you didn’t make it, you missed an interesting discussion on a house’s shelf life, our new responsibility to first time buyers and asking for business.
We all think about it, but for the first time the notion of a property’s shelf life has been vocalized in Mastermind. How many times have we had to gently explain to potential sellers that their house, their pride and joy, is probably going to be gutted out by the new buyer. Shocker. The best discussion is to let them know that how we live in our homes has changed. The new reality is that properties outlive their functionality. Need proof? Think about Regent Park. For decades it was known as the city owned low-income, low density and high crime public housing neighbourhood. With the help of the private sector it is now neighbourhood on the rise. The once badly maintained two and three-story walk-ups have been replaced with stunning glass condo towers with a mix of fair market value condos and assisted living. Sellers need to understand that houses also outlive their functionality. Families are smaller, so four and five bedroom homes with small closets and one or two bathrooms are being renovated into three bedrooms with multiple bathrooms and finished basements, rec rooms or apartments. Getting people to understand that this shift is less about their decorating style and more about how the world, or at least our little corner of it, is living differently.
In our last Monday meeting, we were fortunate enough to have Joe Sammut, from Mortgage Architects, sit in and give us an update on the ever-changing world of mortgages. As we all know, there is a lot of talk about 2.99% interest rates, bidding wars, and multiple offers. But Joe wanted us to be especially vigilant when talking to our clients. A good agent’s job is to be less about finding houses and more about being the “trusted Advisor” to the buyer. During Mastermind, we touched on the topic of what information we should give to potential first time buyers. Despite talk about a potential housing bubble, people are still buying homes. We all believe that our job should go beyond the negotiation process. We should help buyers make smart decisions. That means making sure they will be able to weather any potential financial storms. Sammut brought up a very valuable point that we should be telling all our clients; pay down your mortgage as fast as possible. Pay your mortgage twice monthly, double up on payments when you can, and also consider adding as little as $200 each month to your mortgage. With the interest rates being so low, if you put $200 in the bank every month you decrease your mortgage amount by $2400 per year which, in reality, will net you a better, tax-free, return than any bank will give you.
Finally, we talked about asking for business. Here is the back story; An agent showed a client a downtown condo . The client really liked it but thought it would be prudent to look at a few other places just for comparison. Those few other places turned into about 25 other condos and a month of the agent’s time. The agent was feeling a little exasperated by the time spent and needed a little guidance. Another agent in the group asked if he had suggested to the client to write-up an offer. He had not, so we all agreed that the next time he took the client out he was to say to him ” alright, we have looked at a lot of comparable properties but you still keep coming back to the one we saw a month ago. Lets put an offer in on it”. In simple terms, you have to ask the buyer “would be sad if, tomorrow, you woke up and the place that you liked was sold”? If the answer is yes, then get the deal done NOW. If you don’t ask…you don’t get. The end result was that the agent texted me that night with the simple message “Mastermind Rocks”. He took the client out to look at one more condo, then asked him to sign an offer. The client did and the offer was accepted. Ah, my work here is done!