Recent talk of putting some control on the demand side of foreign investment in Canada

Published June 27, 2016 by Real Estate Leads

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Foreign investment is not the only problem with Vancouver’s stratospheric prices but proper taxation would help to fix Vancouver & Toronto’s home price inflation.

The most drastic fix, now being talked about, is to put a cap on Vancouver’s seemingly out-of-control home price inflation through some taxation on foreign real estate investors. It is logically about the most the effective way to simmer down Vancouver’s epic market rise; without precipitating a market collapse.

Stopping foreign investment entirely is not a nice, nor effective solution, as foreign investment is only one of the drivers of high prices; but it has been a quite noticeable one indeed.

So if our politicians can get their minds properly wrapped around the issue then some intelligent new taxing regulations could effectively put a damper on the recent run-away market behavior – which most experts are saying is a bubble that will eventually suddenly/remarkably pop.

When investors come in and purchase real estate who actually have no intention of living, nor working, in Canada, but instead principally as a profit-generating investment – that is the problem that needs to be addressed. A portion of the foreign investors are only involved to transfer funds internationally and/or make quick money.

In a nutshell what is being discussed is “taxing speculative activity”.

Australia and New Zealand & and other areas experiencing similar housing problems have successfully implemented foreign ownership tax rules and laws. Australia has made a rule that restricts foreign investors to purchase only *brand new* developments.

Australia is saying, that if you build something new, at least they are creating some extra GDP – some economic momentum, employing people, adding something to the economy for the benefit of all. If they are just playing the resale market, then they really not adding anything to the economy – only higher prices.

Vancouver faces a fundamental supply problem, as do many other large cities such as Toronto; so solutions like taxation are limited in how effect such changes may have.

Vancouver is an island … from a real estate perspective. In Vancouver, the supply can not be soon expanded, but taxation of foreign-non-resident speculation can help control Vancouver’s staggering home price inflation.

A solution to the drastic home inflation trend being seen in Vancouver and Toronto can be found by discouraging demand.

These aren’t our ideas – just a summary of what we see being discussed on real estate forums. What are some of your ideas? We would love to hear from you.

RealEstateLeads not only wishes to provide you new leads in real-time, but also pertinent and fresh market knowledge through our weekly updated blog.

As Home Prices Soar Above the Heads of Average Canadians; More Are Now Teaming-up to Buy Homes

Published June 20, 2016 by Real Estate Leads

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Soaring housing prices have been the cause of a new trend, especially for Millenials. When couples today often can’t together put together enough to buy a house in Vancouver or Toronto, couples are now coupling together with other couples, and in some case splitting the house into two parts.

Many who are trying to get into the market view it as a short term initial plan to get their foot in door and build some equity. Some folks are breaking a down payment into 3 or 4 parts with their new housemates/co-owners.

But with home prices in the Lower Mainland’s volcanic-hot real estate market – many in already in this arrangement, who had hoped to break free on their own, are now thinking of staying put. Some are investing in their crowded house to expand it versus selling and going their separate ways.

Many more first-time homebuyers are contemplating arrangements into such types of arrangements as long-rising prices in markets such as Vancouver & Toronto have eroded affordability.

Many younger Canadians are looking to friends & family for housing help

A recent random poll discovered that about 1 in 4 millennials would or are already contemplating purchasing a home with a friend; nearly double the percentage of a sampling taken in 2015.

Similarly numbers of fresh 1st time buyers who would considering purchasing with a family member was also 24%, up from 14% in 2015; as in some of the larger Canadian markets. Being able to qualify for their first home (or condo) is increasingly more challenging or entirely out of reach.

Not only have there been higher selling prices, but also premiums on mortgage default insurance have also risen: which only make the problem(s) worse.

Crowed House of Group Investment?

While many co-purchase arrangements involve both parties living together in the home; this isn’t always the case.

When Raymond Wiabel bought a $340K 2-story detached house in East Toronto with a long-time friend in 2012; they each put in half of the down payment. They agreed to split the cost of all of expenses and any capital gains when they sell. But only Wiabel lives in the home; for his friend, the transaction has been purely an investment. Raymond considers him a second spouse because as they own the house together.

For some, it is a possible way to get into the market sooner.

Some caution that such arrangements come with risks, as when someone purchases a house together, it is basically like starting a business together. There are going to be points in time where things might not be so cozy, and people account for that. It is recommended to those to consult with an attorney and draft up a mutual agreeable written plan document – that covers everything imaginable when something happens; such as if one party wants to sell or how the cost of repairs will be managed/split.

Also co-investors should know that their name and your credit file is attached to the overall debt – so if a partner you are investing with loses their job, et al., and they can’t make their part of the mortgage payments – then that’s going to affect the other partner too.

Knowledge and real estate leads – two ingredients for increased success in your career.

The Big Benefits of Proper Lead Cultivation

Published June 13, 2016 by Real Estate Leads

There is a myth in the industry that we wish to focus on. Real estate agents who are closing a disproportionate number of deals are not getting better leads – truly they are performing a better job at nurturing the leads that are coming in to them. To those who feel that they are struggling, this insight is good to know as it means that you have more power and control than you might have thought before.

Really conversion rates are dependent not so much on your lead generation system or techniques (although that has some weight) but what will mainly drive your success is the on the effort (and finesse) you put into lead follow-up.

Even more wonderful news is that you will not be tasked with reinventing the wheel to efficiently convert leads. What is critical is to develop good follow-up habits which will provide higher conversion rates for you.

The Element of Speed

If you secured constant web leads each day – which you have done if you are lucky enough to have an account with RealEstateLeads.ca – then you might just think everything is set. However, our lead service is only half the equation for success; the other half is naturally up to you. So if you are not calling your leads then you are definitely not on a path for high-conversion rates. Various studies have pointed out that calling your leads within the first 5-10 minutes enable much better results even than calling 10-30 minutes or more or later. What are they doing after 10 minutes of submitting their information on the internet? Chances are they are in an anxious mode and perhaps already dialing another agent, or perhaps they are just engaging back into their work, domestic duties, or regular routine.

Studies have shown that most leads will work with the 1st agent they engage in a conversation with; even if they speak to some other ones afterwards. Of course, this also depends on how well you tell them what they are hoping to hear without being dishonest. So if you call a lead in those five to ten minutes; you are making a good impression – and so you are also most likely to be the agent of choice that will they end up working with. One study reported that quick lead response positively impacts lead conversion by 230%.

The reason why most agents don’t pick up the phone as they should is not so much because they are lazy, but often because they feel afraid to fail. Failing sometimes is always guaranteed, but as the old adage goes – “no pain – no gain.” A tried & tested way of overcoming calling fears is rehearsal of scripts. For great script examples, see our previous article on that topic. So every time you make a call, you have a fine tuned the script right in front of your eyes, so you effectively reduce your chances of losing control of the conversation.

The Art of Following-up

Again an immediate reaction to a online lead should be calling them about 5 minutes after the lead was delivered to you – despite any automated email that might have been sent. Not every lead is going to answer your call immediately, but with today’s smartphones – they should be able to see that you called – and they will appreciate that when you are able to get a hold of them. It should be repeated again NOT just send an a manual or automated email – that is, unless you want to be a member of the big bucket of agents who convert less that 10% of leads. Realistically you can push that number higher that 50%, or more.

If nobody answers your first call,leave a voicemail and perhaps also send a text if it is a mobile number. Your text will most likely be full read in any case. Also, if you have it set-up – automated home searches sent from your website and drip campaigns are both good methods for keeping in touch.

The biggest mistake you can make, other than being rude or insulting to the prospect, is to decide to stop following up with a lead because you quickly feel you are not getting the response you hoped for. But if a lead specifically asks you to stop, you should continue to follow-up with them at least by email or text; or even by snail mail if you have an address.

Not all leads are ready right to talk away. As you might already know, a small percentage of leads will either sell or buy (or both) within a few months. Most leads actually take up to a year (and in some cases longer) before they will take the plunge. However, your job in the meantime is to make sure you are in their line of sight, so to speak, whenever they are ready.

Setting up a meeting with your lead, face to face, is equally crucial as a call. Negotiate with them on the phone to initially schedule an appointment for discussion over a cup of coffee. Another idea is to invite them to one of your open houses for a more light-hearted approach. Nothing beats real physical visual interaction. If you can swing it, try to arrange for a skype video call with them.

The main idea is to build rapport and therefore meeting your leads in person too. Choose voice calling over email or sms – those are a dime a dozen sort of speaking. Of course you know this, but it goes in line with this train of thought – purchasing a house is probably one of the biggest decisions and investments your leads will ever make. Therefore, they will probably want to take their time, so feel them out and react likewise. Use their feedback to build their trust in you.

With a smart and strong system in place, you can practice with every lead to iron out the art of following up and working those leads down. The net result of doing this better = more deals.

Don’t be disillusioned. Follow up with leads is a lot of work, but such efforts will turn into your bread & butter. You shouldn’t just go at it freestyle. Each new lead should be another chance to perfect your communication skills. Best wishes from your secret helpers at RealEstateLeads.ca

Home affordability shackling a high % of Vancouver/Toronto millennials with the folks longer

Published June 6, 2016 by Real Estate Leads

Alot of millennials now faced with near-zero discretionary spending are now saying they’re considering giving up on the prolonged – and unfair to them – market insanity and are increasingly deciding to leave Vancouver…

Will most Millennials mostly wind up, like birds in the trees, in downtown condo high-rises? ( Considering Vancouver & Toronto mainly; and secondly Montreal & Calgary )

Living with mom & dad; when bearable, is a popular option for Millennials in light of the skyrocketed home prices in the Vancouver and Toronto areas.

According to a recent “Vancity” poll, 60% of respondents between 18 & 24 stated they are still living in their root family room, while 22% of those between 25 & 35 have yet to rent of buy elsewhere. Unaffordable home ownership and unreasonable rents, and student loans, and average insufficient salaries, were recorded as the major impediments.

Owning a home is now rapidly replacing retirement funds; even boomer retirees are now having to get part-time jobs to supplement themselves!

Mothers & fathers are realizing staying in the nest longer is the only way their sons and daughters can sufficiency get ahead financially in order to one day get into a condo. The day and age when people go to work at the same place for 40 years, retire, and then get a watch and pension is gone.

Renting is often a undesirable option. When you look at renting a condo that is just a waste of money. If somebody can save up and have that as an advantage, why not? However Millennials on the average now think it will take them about 10 years to start to achieve the Canadian Dream. And if a couple wants to have two kids, a condo downtown is really not going to work for a variety of reasons.

At a certain point,there is going ot be some sort of significant correction. The correction may or may not be severe – only time will tell . It probably won’t be as severe as what happened in the United States in 2008, but it could be a non-trivial correction.

While that will hurt people who just got into the market, it could be great news for Millennials hoping to break in. Only time will tell, we will have to wait and see.

One growing trend seems to be making larger houses more affordable by the immediate inclusion of basement units and/or other rental rooms/units within the home. Then a millennial is no longer just a homeowner, they also become a landlord on that property.

Millennials in ways are not different from the former generation – home ownership, saving for their children’s education are still their average top priorities. They just can’t afford to save for retirement.

For Gen Y, they believed that they would achieve home ownership. They are still very eager about achieving that goal at some point in their lifetime,

What we have seen is that average home price-tags across the country have certainly increased while income, of course, hasn’t increased in in parallel.

Millennial home ownership will be difficult for most, but not impossible. However, they just can’t have that 3K sqt house immediately. They’re going to have to establish themselves around the outskirts of town first.

What do you and your colleagues across Canada think? Please forward to others and let us know. We’d love to hear ( contact@realestateleads.ca ) from real estate agents and also any Canadian citizens.

Archives

All posts for the month June, 2016

Recent talk of putting some control on the demand side of foreign investment in Canada

The Big Benefits of Proper Lead Cultivation

The Element of Speed

The Art of Following-up

Home affordability shackling a high % of Vancouver/Toronto millennials with the folks longer