The difference between a banker and a broker comes down to the products each can offer and where their allegiances lie.

While using a mortgage broker seems like it would save you money because they have access to many lenders and programs, brokers are paid commissions by the mortgage company and some lenders pay more than others or offer perks. When working with a Bank, that loan officer only has access to their own mortgage  programs and mortgage rates. A banker is paid by the bank, to make the bank money, by selling you services, while a mortgage broker is paid by the lender they choose for your mortgage provider.

Either way has its pros and cons.

Both have access to various mortgages. The broker might have more companies to work with, but banks and credit unions are becoming more flexible with their products in order to compete.  You still need to shop around. Word of mouth from a trusted friend or family or from your realtor is a good way to start. Friends and family do mean well, but as a Realtor I can tell you that I have come into contact with many bankers and mortgage brokers over the last 28 years and always try to find you the best match.

You will likely have to meet with either a mortgage banker or mortgage broker, as they need some basic info about you and your income and expenses.  You typically don’t pay either for their research or time. When you choose your mortgage and get it in place, either will then be paid.

You will still negotiate on terms and rates with either.

Renewal Time?

If you have a mortgage up for renewal, or you would like to refinance, it is always in your best interest to check around with a mortgage broker and/or with the lender who currently holds your mortgage. Just because they were the best option previously, that doesn’t mean they will be the best option in the future.

If you or someone you know is considering a new mortgage or renewal, let’s connect to get you the best mortgage options available!

Some of you may have watched his show called To Catch a Contractor.

Before launching a successful career as a TV and radio personality, Adam Carolla was a master carpenter and home builder, so he knows the work of skilled craftsmen when he sees it. Likewise, he can spot shoddy construction, and in this series he trains his eye on building blunders and the contractors responsible for them. With the help of no-nonsense builder Skip Bedell and his wife, private investigator Alison Bedell, Carolla seeks retribution for homeowners who have experienced a construction nightmare, by tracking down unscrupulous contractors and forcing them to face the wronged parties. The contractors are then given a chance to redeem themselves by fixing messes they left behind — all while under Adam’s and Skip’s watchful .

I watched a few of his shows lately and was pleasantly surprised by some of the lessons that rang so true for me.

The first lesson hit home – Don’t work out of your area of expertise.  This is so true for most, if not all occupations.  If you’re not sure of what you are doing, get some help from an experienced person or refer the job/client to them.  I have experienced this situation many times over the last 26 years in real estate and I do feel badly when I have to tell one of my clients, “No, I don’t work in that area of real estate, but I can connect you with someone good that does work in that area.”  I have chosen to work residential in Regina and close areas around Regina, but real estate in commercial, acreages, cottages is not my area of preference or expertise.  Yes I was licensed quite a few years ago and even though my license does include those specific areas, I have not pursued them because I don’t have the interest in them and haven’t pursued more training in those areas.  I let the people that know what they are doing in these fields handle the clients.

Another lesson he talked about was “Don’t undercut your competition to get the job.”  So true.  Real estate commissions are a high number and we turn blue explaining why (our costs from advertising to insurance to memberships to our split with our company and with the buyers company, etc.)  The costs are a lot of money and thankfully they usually come from the sale price of the house as most property sellers don’t happen to have that amount of money just hanging around, waiting to be spent.

Undercutting happens a lot in my business and it hurts all of us.  Usually the agents that undercut other agents will also undercut their work for their client.  Maybe they don’t advertise as much as others, maybe they don’t spend time following up on showings and leads, maybe they don’t keep in contact with their seller, don’t keep on top of the real estate market and share that info with their clients, etc.  Unfortunately the seller doesn’t find this out until it is too late and they have listed with the agent who offered the lowest commission.  Food for thought – if that agent was so quick to give up their money (commission), how quick do you think they will be to give up your money (sale price of your property) when an offer comes in?  I’ve always believed in the saying, you get what you pay for.  Thanks Adam.

Today’s Leader Post had an article about our latest real estate stats.

Our Association of Regina Realtors showed that at the end of July there were 1,512 residential properties for sale compared to 1,263 properties in July 2016. 30% of these listings are condos which is high.

Sask Trends Monitor says that this pattern of slightly fewer homes trading hands at slightly higher prices has been going on for several years now. We are at a maturing or leveling out of our housing market since the boom that happened in the mid-2000’s.

I personally have encountered quite a few price drops in the last 5 years so, as always, take this article, as the old saying goes, with a grain of salt.

For the full article, click here

There are 9 million Canadian millennials, representing more than 25% of our population. Born between 1980 and 1999, the eldest are in the early stages of their careers, forming households and buying their first homes. Buying a home is a daunting process for anyone, but especially so for the first-time home buyer. This is the largest and most important financial decision you will ever make and it should be done with the appropriate investment in time and energy. Making the effort to be financially literate will save you thousands of dollars and assure you make the right decisions for your longer-term financial security.

1. Don’t rush into the housing market. (can you believe that I am saying that as a Realtor?)
Do your homework and learn the basics of savings, credit and budgeting.  Lifelong savings is a crucial ingredient to financial prosperity. You must spend less than you earn, ideally saving at least 10% of your gross income. Do your savings automatically, having at least 10% of every paycheck put into a savings account. Hopefully if you don’t see the money, you won’t spend it. Contributing to an RRSP, especially if you are fortunate enough to have any matching funds from your employer, is essential.

The Tax Free Savings Account (TFSA) is an ideal vehicle for saving for a down payment and now you can contribute as much as $10,000 per year.

You also need to establish a good credit record. Lenders want to see a record of your ability to pay your bills. As early as possible, get a credit card and put your name on phone and utility bills. Pay your bills and your rent in full and on time. Do not run up credit card lines of credit. The interest rates are exorbitant and the only one who benefits is your bank. Keep your credit card balances well below their credit limit.

Do a free credit check with Equifax and TransUnion once per year to learn your credit score and to see if there are any problems. They do make mistakes and sometimes put someone else’s problems on your report. Or you might think that the problem you had is all taken care of and you discover that the company you dealt with did not inform these credit places of the situation. I have done this more than once for myself and it can be a pain, but you are responsible for your own credit report and it’s good to know what info these companies have about you and if it needs updating.  These companies track all of your credit history, which includes student loans, car loans, credit cards and cell phone bills. Then they grade you based on your responsible usage and payments.

Budgeting is also essential and it is easier than ever with online apps. You need to know how you spend your money to discover where there is waste and opportunity for savings. The CMHC Household Budget Calculator or any other online budget calculator helps you take a realistic look at your current monthly expenses.

2. Make a realistic projectory of your future household income and lifestyle and understand its implications for choosing the right property for you.
Millennials are likely relatively new to the working world. Lenders want to see stability in employment and you generally need to show at least 2 years of steady income before you can be considered for a mortgage. This also applies if you have been working for a few years in one career and then decide to change careers to something completely different. Lenders want to see continuous employment in the same field. If you are self-employed, it is more challenging, and you need professional advice on taking the proper steps to qualify for a mortgage.

Assess the stability of your job and the likely trajectory of your income. Millennials will not follow in the footsteps of their parents, working for 1 employer for 40 to 50 years. In today’s world, no one has guaranteed job security. Take a realistic view of your future. Will your household income be rising? Will there be one income or two? Are there children in your future? Will you remain in the same city?
The answers to these questions help to determine how much space you need, the appropriate type of residence, its location and the best mortgage for you. Financial planning is key and it is dependent on your goals and expectations.

3. This is not a Do-It-Yourself project: build a team of trusted professionals to guide you along.
You need expert advice. The first person you should talk to is an accredited mortgage professional. There is no out-of-pocket cost for their services. Indeed, they will save you money. These people are trained financial planners and understand the ever-changing mortgage market. Take some time with them to understand the process before you jump in and find your head spinning with all the decisions you will ultimately have to make. They will give you a realistic idea of your borrowing potential. Before you fall in love with a house or condo, make sure you understand where you stand on the mortgage front. Mortgages are complex and one size does not fit all. You need an expert who will shop for the right mortgage for you. There are more than 200 mortgage lenders in Canada and they will compete for your business.

It is a very good idea to get a pre-approved mortgage amount before you start shopping (mandatory in my books). Just becuase you work with someone at a similar job, this doesn’t mean that you will qualify for the same amount of mortgage as your co-worker.  One of you might have more debt or more savings than the other, or issues with your credit report. Getting pre-approved is a more detailed process than just a rate hold (where a particular mortgage rate is guaranteed for a specified period of time). For a pre-approval, the lender will review all of your documentation except for the actual property. There is far more to the correct mortgage decision than the interest rate you will pay. While getting the lowest rate is usually the first thing on every buyer’s mind, it shouldn’t be the most important. Six out of ten buyers break a 5 year term mortgage by the third year, paying enormous penalties. These penalties vary between lenders. The fine print of your mortgage is key and that’s where an expert can save you money. How the penalty for breaking a mortgage is calculated is key and many lenders have significantly more consumer-friendly calculations than the major banks. A mortgage broker will help you find a mortgage with good prepayment privileges.

The next step is to engage a great real estate agent.            hint hint

The seller pays the fee and a qualified realtor with good references will understand the housing market in your location. Make sure the property has lasting value. Once you find the right home, you will need a real estate lawyer, a home inspector, an insurance agent and possibly an appraiser. Make any offer conditional on a home inspection and financing, among other conditions that your realtor will help you with.

4. Down payments, closing costs, moving expenses and basic upgrades need to be understood to avoid nasty surprises.
The size of your down payment is key and, obviously, the bigger the better. You need a minimum of 5% of the purchase price and anything less than 20% will require you to pay a hefty CMHC mortgage loan insurance premium, which is frequently added to the mortgage principal and amortized over the life of the mortgage as part of the monthly payment. Your lender will want to know the source of your down payment. Many Millennials will depend on their parents to top up their down payment. The down payment, however, is only part of the upfront cost. You can expect to pay from 1.5 to 4% of the purchase price of your home in closing costs. These costs include legal fees, appraisals, property transfer tax, GST on new properties, home and title insurance, mortgage life insurance and prepaid property tax and utility adjustments. These can amount to thousands of dollars. Don’t forget moving costs and essential upgrades to the property such as draperies or blinds in the bedroom.

5. Test drive your monthly housing payments to learn how much you can truly afford.
Affordability is not about how much credit you can qualify for, but how much you can reasonably tolerate given your current and future income, stability, lifestyle and budget. Most Millennials underestimate what it costs to run a home, be it a condo or single-family residence.

The formal qualification guidelines used by lenders are two-fold:
1) your housing costs must be no more than 32% of your gross (pre-tax) household income; and,
2) your housing costs plus all other debt servicing must be no more than 40% of your gross income. Lenders define housing costs as mortgage payments, property taxes, condo fees (if any) and heating costs.
3) But homes cost more than that. In your planning, you should also other utilities (such as energy, power and water), ongoing maintenance, home insurance and unexpected repairs. Taking all of these costs into consideration, the 32% and 40% guidelines might well put an unacceptable crimp in your lifestyle, keeping in mind that future children also add meaningfully to household expenses and 2 incomes can unexpectedly turn into 1.
The best way to know what you can afford is to try it out. Say, for example, you qualify for a mortgage payment of $1400 per month and adding property taxes and condo fees might take your monthly housing expense to $1650. A far cry from the $500 you pay now to split a place with 3 roommates. Start making the full payment before you buy to your savings account and see how it feels. Do you have enough money left over to maintain a tolerable lifestyle without going further into debt?  Yes it might be a bit tight, but if you really want to be a home owner, you will make some sacrifices for that goal.  Keep in mind that this is not a normal interest rate environment. Don’t over-extend because there is a good chance interest rates will be higher when your term is up. Do the math (or better yet have your broker do it for you) on what a doubling of interest rates 5 years from now would do to your monthly payment. A doubling of rates may be unlikely, but it makes sense to know the implication.

Do Your Calculations Look Discouraging?
If so, here are some things you can do to improve your situation:
Pay off some loans before you buy real estate.
Save for a larger down payment.
Take another look at your current household budget to see where you can spend less. The money you save can go towards a larger down payment.
Lower your home price — remember that your first home is not necessarily your dream home.

Footnotes:
People break mortgages because of:
– job change,
– decision to upsize or downsize,
– decision to change neighbourhoods,
– change in family status (marriage/divorce)
– to refinance.
The last thing you want to discover is that discharging a $400,000 mortgage and only being 3 years into a 5 year term is going to cost you $15,000.

Lenders now also assess you on a 5 year term, presently at 4.64% even though you might be getting a lower interest rate on your mortgage.

Thanks to many mortgage professionals of Dominion Lending Centres who contributed to this report.

Over my 26 years of selling real estate in Regina, I have watched several agents move companies.

I was usually disappointed to see some agents leave the company I was at because I thought they were good decent people and I hated to lose touch with them, but I felt that they had their reasons for moving and I wished them well.

I can only guess as to the reasons why other agents changed companies.  Maybe they felt they were in a sales slump and needed a change. What is that saying? “A change is as good as a rest”.

Maybe they were asked to leave the company.  Yes, this business has unscrupulous people as does most, if not every, other business out there.  Unfortunately these few bad apples spoil it for everyone else.  Goodbye to bad rubbish as another saying goes.

I was asked years ago by my past broker, what would it take for a company to offer me to move to their company?  My answer was “it’s not what they offer me, it’s what my present company wasn’t doing for me, that would make me leave.”

I planned on staying at the same company for years and years until I retired.  I consider myself to be a team player, whether it’s a company fundraiser for the charity of choice, or a fun event to let off some steam or an in-house contest to get us motivated and selling, or weekly sales meetings, etc.  I participated as much as I could, even including my spouse and children in conferences and some events over the years.  We could make a conference a family vacation with extra days taken either before or after my work convention duties were done.  This way my family could meet some other agents and hopefully understand my business a little better plus we could enjoy some fun family time together.  I think you always have guilt when you are working parent and try to do what you can to lessen that guilt.

I chose my first company 26 years ago after very carefully interviewing with 4 companies.  One broker told me point blank to go to the company I chose because they had the best training for new agents at that time.  One broker made me feel too much like his daughter and didn’t give me the right feeling as business associates.  One other broker seemed blown away by my interview answers and wanted to hire me on the spot, but I wasn’t ready to make my decision yet.  Plus this broker had me write his company’s real estate agent test.  I was supposed to hear back from this broker a few days later as to the results of my test, but when he didn’t call me, I called him instead.  He was a changed person because he said that the test showed that I wasn’t independent enough to be a good realtor.  Well, the company that I did go to work at, told me that they sent this broker a copy of my stats to show how much business I did (for someone that wasn’t independent enough).

I enjoyed my first 23 years at the company I chose, learning and growing as an agent.  I met other agents and lots of clients, learnt a lot, increased my business every year and won a bunch of awards based on production and also on client and peer recognition.  I loved what I did.  Yes I put a lot into my work and got a lot back.

But then in the last 2 years, I wasn’t happy.  Things had changed.  These changes were probably meant to be better for the company but I wasn’t feeling it.  Too many chefs cooking.  Not sure who to turn to in times of need.  Questions were left unanswered.  Were they too busy, or too busy for me, or did they not care anymore?  I wasn’t enjoying myself.  Things were happening that I didn’t agree with. I felt like a past client who wasn’t being acknowledged for all the business I had given them.  The emphasis was on getting new agents to work at the company and us ‘oldies’ were forgotten about.  This isn’t what we were taught to do with our clients, yet the company was doing it to their agents who were the company’s clients.

Then one day it hit me like a bolt of lightening.  I could change companies.  I had talked to various brokers over the years.  Not that I was planning on moving companies back then, but I feel that it doesn’t hurt to talk to others and keep abreast of what is out there, just in case.  It was like a huge weight was lifted off my shoulders when I made this decision to move.  I felt that I still had quite a few years left in me to keep on working and I should be happy doing it.  Was it an easy decision? Yes and no.  I cried a few times because it felt like I was ending a relationship and it hurt, even though it was the right decision to make.

Is the grass greener on the other side of the fence? Maybe, maybe not. But I do know it needs the same watering and cutting and fertilizing that the other grass needed.  I’m happy I made my move.  Life is what we make of it.  Make yours great today!

Some of you have asked about the company I chose to move to in 2014.  Well, here is the history below about Realty Executives.  Yes, we are on the MLS (Multiple Listing Service). Yes, I still provide the same service as before. Yes, it’s a great company or else I wouldn’t have moved here.

1965 – a real estate professional named Dale Rector was about to transform the real estate industry. He launched Realty Executives with 1 office in Scottsdale, Arizona. Agents were charged a $35 monthly fee plus a share of expenses. The company started with 4 agents. Dale Rector acted as designated broker for Realty Executives Phoenix. The concept, designed to provide the maximum benefit to the most productive, experienced and effective real estate agents, birthed the first ever 100% commission real estate company – Realty Executives.
(Century 21 was founded in 1971, Remax in 1973).

1970 – Realty Executives has 100 agents in Phoenix area.

1972 – Realty Executives becomes the No. 1 Phoenix brokerage.

1973 – Realty Executives opens in Tucson, the company’s first expansion office outside of the
Phoenix area. This expansion marks the company’s first official franchise.

1974 – Realty Executives Phoenix tops $100 million in sales for the first time.

1976 – Realty Executives expands to California with a franchise in Oceanside. By the end of the year, the company has offices in Arizona, California, Colorado, Florida, Iowa, Nebraska, Oklahoma, Pennsylvania, Texas, Wisconsin and Utah.

1980 – Rich Rector becomes president of Realty Executives Phoenix and chairman of the franchise company, which was named Execu*Systems, Inc. at the time.

1984 – Rich and his wife, Robyn, purchase the real estate franchise company (Execu*Systems, Inc.) from R. Dale Rector.

1988 – Realty Executives International obtains its first Canadian franchise. (Century 21 in 76 and Remax in 77) .

1994 – Realty Executives International experiences a record year of franchise growth adding more than 100 new franchises and more than doubling the previous record of 43 new franchises sold in 1993.

1994 – Realty Executives ranks 54th in Success magazine’s list of the 100 best franchise companies in America. Realty Executives International sells franchising rights to establish Realty Executives in Mexico and South Africa.

1997 – Realty Executives forms Homes from the Heart as its corporate charitable program, building and renovating homes for needy families across the system, largely in partnership with Habitat for Humanity International.

1999 – Realty Executives International ranks 27th in Success magazine’s annual list of the top 100 franchise companies in the United States.

2001 – Realty Executives International opens first offices in Mexico. The 3 new offices are located in the cities of Chihuahua, Lake Chapala and Ensenada.

2002 – Realty Executives continues its aggressive international expansion, with the opening of offices in Australia and Israel.

2003 – R. Dale Rector honored as one of the top 25 Most Influential People in Real Estate by REALTOR magazine.

2004 – Realty Executives ranks in Entrepreneur magazine as one of the “Fastest Growing Franchises.”

2006 – “Fastest Growing Franchises.” Realty Executives rolls out HomeWorks, a national marketing initiative designed to help teachers and others in the education field purchase homes.

2008 – Expansive growth in Central America includes Costa Rica, Panama, Nicaragua and Belize.

2010 – Realty Executives International expands rapidly on the global level. New international territories include Turkey, Saudi Arabia, Qatar, United Arab Emirates, Oman, Dominican Republic, Bahrain and Kuwait.

2012 – New international franchises in Lebanon, Jordan and Egypt.

2013 – Rich Rector announced as the Recipient of National Homeownership Award.

2013 – Realty Executives International Ranked #276 amongst All Franchise Companies by Entrepreneur magazine’s 2013 Franchise 500® List.

2013 – New international master franchisor in Malaysia.

2014 – Rich Rector named #30 on the Swanepoel Power 200 List of Influential Real Estate Leaders.

2014 – Realty Executives International Ranks #6 on the Phoenix Business Journal’s list of Top Franchisors.

2015 Realty Executives International is located in 32 countries with over 10,000 agents worldwide.

Revolutionary thinking is what made Realty Executives different from the competition in 1965, and continues to make us different today. Sophisticated technology platforms, relevant training and world-class brand recognition awards and attracts the best agents in the real estate industry to become “Executives”. Our culture frees agents to focus on what matters most – providing the best service to clients in any market.

Our progress in today’s real estate market puts the consumer experience first. Well-informed, steeped in technology and always on the go, consumers start their real estate searches online over 90% of the time, with 68% of home shoppers utilizing mobile applications throughout their research. It comes as no surprise – over the past 4 years, real estate related searches on Google have grown by 253%.

Realty Executives embraces these changes, placing technology, marketing and training initiatives first so that agents and brokers throughout our expansive network can meet the needs of clients today and tomorrow.

Take note of the First Home Plan that provides an interest-free, repayable loan of up to $10,000 for you to use towards a down payment on your first home.

If you live in (or will be moving to) Saskatchewan, have Graduate Retention Program tax credits available and are going to buy a single family house, duplex, townhouse, mobile or condo unit for your primary residence in Sask, then you are possibly eligible.

For more info, go to Sask Housing Corp. Click here.