Growing Numbers of Canadian $ Spent on U.S. Real Estate

Published July 31, 2017 by Real Estate Leads

Canadians buying property in the States has been going on for decades, and vice versa with Americans buying property in Canada. While the volume of homes and vacation properties in Canada being sold to American buyers has remained fairly consistent, the number of U.S. properties going to Canadian buyers has surged upwards in recent years. There are a number of factors playing into that trend, and the first and most obvious of them being the prohibitively high price of real estate in major metropolitan areas in Canada.

Here at Real Estate Leads, we’re thrilled with how our online lead generation system for realtors has been so well received by the real estate agent community in Canada, and we’ll continue to make adjustments to it to ensure it’s serving its purpose with maximum efficiency. We also enjoy keeping our thumb on the pulse of trends that are emerging in real estate.

The increasing number of U.S. properties being sold to Canadian buyers is one that’s particularly interesting to note. With accelerated house price growth in Canada’s hottest markets – Toronto and Vancouver – more Canadians are opting to buy affordable properties across the border. Given that we can assume the majority of those buyers do not have dual citizenship or a work visa, there can be some guessing as to what would spur the purchase of a home in a country that – despite being your next door neighbour – is just that, a foreign country.

That can and will be a discussion for a different day, however.

Residential All the Rave

From April 2016 to March 2017, the $19 billion that Canadians spent on residential properties in the United States was a record — in fact, it’s more than double the total of $8.9 billion recorded in last year’s report. All this from the National Association of Realtors’ (NAR) latest report from earlier this month. During this same period, a total of 284,455 properties were sold to foreign investors, a number that was up 32% from 2016.

Canadian buyers made up for 33,819 of those properties, a jump of nearly 7,000 from 2016. China led the way with the most foreign purchases for a third consecutive year, making 40,572 purchases in the US worth an astounding $31.7 million.

This is further despite the fact that inventory shortages continue to drive up US home prices, and it would seem that many of these Canadian buyers are looking south of the 40^th in search of affordable vacation homes.

The common consensus seems to be that a measure of the acceleration in foreign purchases over the past year is coming from the combination of more affordable property choices in the U.S. with foreigners assured in their decision to buy now by understanding that any further weakening of their local currency against the dollar will make buying in the future considerably more expensive.

Exchange Rate Factors

Foreign investment from Canadians dropped from 2015 to 2016 in the US as a result of the weakening Loonie, but this year’s heightened activity is believed to be a temporary phenomenon when we consider the red-hot market activity seen in Vancouver and Toronto. Industry experts expect to see continued strong demand from Canadian buyers, but they also believer there is very like going to be a pullback too.

The median price tag for US homes purchased by Canadians was $288, 615 – which was up from just over $222k in 2016. An interesting trend to note is that from April 2016 to March 2017, the majority of Canadian buyers were choosing the southeast and southwest areas of the US as their preferable investment areas, and most particularly in Florida.

Affordable options and a warmer climate pair to make up the top reasons why Canadians consistently are in the top 3 nationalities of foreign buyers purchasing homes in the U.S. That’s in large part because home price appreciation is quite strong in Canada relative to the United States, and you then factor in warm weather is a driver all on its own. Further, you also tend to get a lot more for your money in terms of square footage and kind of proximity to amenities in U.S. locations

Overall, foreign buyers and immigrants spent $153 billion on homes, and not only is this number a notable 49% increase from $102.6 billion in 2016, it’s a new record high that suggests the purchasing prerogatives for buyers here in Canada and elsewhere are changing to be less focused on the domestic market and buying homes for housing to more focused on investment and acquisition of assets.

Working with buyers is an equal 50% of what most realty professionals do here in Canada, and working in conjunction with similar professionals working in the U.S. to accommodate the purchasing wishes of clients looking for an investment home in U.S.A can be very much a mutually beneficial arrangement.

Sign up with Real Estate Leads here and receive qualified online-generated real estate buyer and seller leads delivered to you exclusively for your exclusive region of the country. You’ll have that region protected, and the leads will be provided only for you. It’s a great business booster that you really ought to take advantage of without delay.

Getting a Getaway: Recreational Properties Set to Become Increasingly Popular Purchases

Published July 17, 2017 by Real Estate Leads

It could be a cottage on the lake, a chalet at the foot of a favourite ski hill, or even a cabin in the remote northernmost part of your province. Interest in buying a recreational property or vacation home is increasing amongst different buyer groups in Canada, and that trend is one that real estate industry professionals would be wise to take note of.

Here at Real Estate Leads, our online real estate lead generation system is a proven effective way for realtors to get more seller leads, and buyer leads too. In particular as it relates to buyer leads, realtors in less-urban areas of the country will want to take particular note of this trend as it may be that greater numbers of prospective buyers will be looking for a real estate professional to assist them with buying a recreational property in rural Canada.

RE/MAX is one of Canada’s leading real estate agencies, and according to their latest recreational property report for 2017, 43% of Canadians would consider buying a recreational property in the next decade. Interestingly, 28% of them with children under the age of 18 would consider selling their primary residence to help finance that purchase, suggesting that it’s not just financially sound soon-to-be retirees or investors that are weighing the market for these types of properties – even young families are increasingly determined to own a cottage or cabin and are willing to explore options to turn that dream into a reality.

This is primarily a reflection of real estate prices in areas of Canada remaining high, and as a result more of these prospective buyers are looking into unique financing options like fractional ownership in a shared property, purchasing a recreational property with a friend, or even selling their primary residence, downsizing, and putting the differential equity into a cottage or cabin.

Resourceful Millennials

Equally interesting to note is that recreational properties are goal for Millennials too. Yes, the thought of having a getaway isn’t exclusively appealing to the more secure generations, and while these young people may be facing much more in the way of career insecurities and the like they are still being smart and creative about how they can afford a recreational property.

The same Re/Max report pointed out above found 65% of Millennials are interested in purchasing a cottage, cabin, or chalet in the next decade, and 39% would use the property as an investment and list it on rental sites to help pay down the financing. Naturally, their interests are tied to locations that facilitate lifestyle more so than older buyers who are looking more for spots that are scenic and less busy.

For example, young Vancouverites who accept there’s no way they could get themselves a chalet in Whistler may be taking especial note of the upcoming redevelopment of Hemlock Mountain Resort just past Mission, about a 2 hour drive from Vancouver.

Boomers Want to Get Away Too

Not surprisingly, the baby boomer generation is tapping into equity to fund their own recreational property purchases. Large numbers of near-retirees and baby boomers nearing retirement are putting the equity they received from sold homes in cities like Toronto and Vancouver into the purchase of a recreational property. Significant price appreciation (and that may well be putting it mildly) in those regions has made recreational property ownership a relatively affordable option for many retirees. Accordingly, we’re seeing price appreciation in popular recreational property markets such as Whistler in B.C. and Haliburton in Ontario.

The Places to Be

Other hotspots for recreational property purchase in Canada from Coast to Coast include:

Tofino and Ucluelet, BC ‘Long Beach’
Squamish, BC
Whistler, BC
Kelowna, BC
Shuswap and North Okanagan, BC
South Okanagan, BC
Canmore, AB
West Lakes of Edmonton, AB
Sylvan Lake, AB
Turtle Lake, SK
Qu’Appelle Valley, SK
Lake Winnipeg, MB
Thunder Bay, ON
Manitoulin Island & French River, ON
Lake Huron, ON
Muskoka & Haliburton, ON
Laurentians, QC
Charlevoix, QC
Shediac, NB
North & South Shores, PEI
East Coast, NFLD

The priciest of those popular recreational property locations in Canada? Right there at the top of the list, with the median price for a waterfront home in Ucluelet or Tofino being between 580 and 660k. The most inexpensive vacation property in Canada? You’ll find that in Newfoundland’s East Coast, at an average of 175k for a waterfront property that – while much less expensive – is every bit as pleasant and scenic at the much more expensive view of the Pacific Ocean on the other side of the country.

All interesting to note, and particularly so for realtors who want to have their thumb on the pulse of significant changes to the buyer / seller cross-sections of the public. As always, being put in touch with these recreational property buyers and sellers is just an opportunity, and what you do with it is up to you. Signing up with Real Estate Leads here is a solid choice, as you’ll receive qualified online-generated leads delivered exclusively to you and for your specific protected region of the country.

Who knows, from there you might find yourself being the perfect matchmaker between homeowners and their new ‘fun time’ home away from the city. Summertime’s here, and we imagine you know what it’s like to be itching to get out of town. Make it happen!

Being the Results Agent: The Fast Track to Converting Real Estate Leads and Closing More Sales

Published July 10, 2017 by Real Estate Leads

Most experienced real estate agents will agree that a buyer or seller leads is little more than an opportunity, and the farthest thing from any guaranteed generator for your business. What you do with your leads – and more specifically whether or not you convert them into clients and then close them as home sold / bought – has always been what’s distinguished the average realtor from one’s who regarded as being especially successful.

Here at Real Estate Leads, we know the value of our service for getting more leads as a real estate agent but we also understand that, again, we’re only providing you with more in the way of those opportunities.

So the objective becomes clear; how do you maximize your conversion rates? The first question you need to ask, though, is to what extent are you making that a priority? If you’ve been in the business long enough you’ll know that there a great many realtors for whom a high conversion rate is regarded as ‘nice if you can have it’ and not an absolute necessity. They’re usually fortunate to have a reason for such indifference, but if you’re one of the majority for whom it’s absolutely essential to be successful with your business then you’re well advised to read on.

The F Pairs are Everything

Converting real estate leads and closing more sales all come down to two things – follow-up and fulfillment. As regards the first of those two, one of the things a realtor needs to understand and embrace is that you must follow up with you clients, and that’s working with the understanding that 8+ of every 10 clients is not going to be the one taking the initiative for second contact.

If you’re not the type who feels comfortable being the one that initiates a follow up with a client, especially ones that didn’t seem particularly ‘warm’ to begin with, then you need to get over that and quick or you’re in the wrong profession.

Apparently follow-up is so hard, it’s believed that somewhere in the vicinity of 48% of agents never even follow-up once with a prospect. Not a single time. Never. Needless to say, that’s just not going to cut it if you want to be converting real estate leads more effectively.

So the question then becomes if that means that 52% of agents follow-up with a prospect at least once. It’s true, but that stat isn’t an impressive one. Fair to wonder why that other 48% of agents are in the business to begin with, and particularly as every realtor is somewhat at a disadvantage to begin with due to the fact there’s never really been enough of the pie to go around.

If you’re not ‘competing’ with your business generation efforts, you’re probably not going to get a sufficient return on your investment of time and effort, even if that time and effort isn’t what it should be given the nature of your chosen profession. Think about that.

Alright, so what about realtors who follow up twice? That statistic is even worse. Only 25% of agents contact a prospect a second time. After 1^st contact, approximately 75% of them let their prospects drift off. Sure, it may be that they’re not interested, or that they’ve changed their mind. But more troubling is that it seems that in many instances the inquiring realtor is simply not managing their database effectively enough to keep track of who to contact and when. If you’re skills aren’t up to snuff there, it’s perfectly acceptable to go ask someone for assistance. Do you want – or perhaps need – to be successful in this profession?

3^rd Time CAN Be the Charm

Let’s look at this a little more deeply. What about a 3rd contact? Only 12% of agents make three or more contacts with the prospect. That means 88% of agents didn’t bother trying to follow-up with a prospect after the 2nd contact. Again, we can safely assume that if the contact remains a ‘warm’ lead that any realtor would of course follow up with them.

It has long been understood in this business that the process of coming to a decision to actually go ahead and sell a home (or buy one, albeit to a lesser extent) is often a drawn-out one where couples are inclined to keep their cards close to their chests and not show that they’re leaning one way or the other. That is, until you follow up until they’ve made that decision – whenever that may be and whatever amount of time has passed before you made your original introduction to them.

Here’s the biggest kicker…

3% of sales are made on the 1st contact

2% of sales are made on the 2nd contact

7% of sales are made on the 3rd contact

9% of sales are made on the 4th contact

76% of sales are made on the 5th to 12th contact (a real eye opener for many!)

Further; 88% of real estate agents share 10% of all sales, and 12% of everyone who shares the same profession as you are sharing 90% of the sales, and in large part because they have no hesitation to be contacting their prospects three or more times.

Simply put you’ve GOT to get over your fear of offending a prospect by contacting them “too much.” It’s the nature of the business, and if you don’t do it, then another realtor will be. Plain and simple. That fact in itself should dispel any reasons you’ve had in the past for not following up in a timely manner and doing so as many times as necessary until you can make a sound determination on the status of your prospective client.

Don’t think you are badgering them. And even if they do think that way, again that’s the nature of the business and they’re likely to be participating in it the same way you are, just in different roles. When they are ready, willing, and able to consummate a transaction, you need to still be there.

So there it is, in all its simplicity – you can never follow up too much!

Also, if it’s too much for someone, they’ll tell you. They might tell you directly, or unsubscribe from your email list, or some other method of implied refusal. The key is to not stop following up until they buy, sell or tell you clearly and definitively that they’re not interested or that your ‘pushiness’ is not welcome.

That’s the reality of it, and you need to have an attitude and perspective that’s in line with it. Again, it’s a big part of the very nature of the business within which you’re making your living.

Fulfillment

Fortunately we don’t see the need to go as extensively as we did regarding the need for follow ups. Fulfillment refers to the entirety of what you are giving them, the full sum of everything you do to be of assistance to them in their selling or buying of a home.

The most successful realtors have learned the best ways to anticipate their questions and other needs, and provide answers, resources, and resolutions.

Fulfillment is much easier than follow-up, but the important point to grasp here is that fulfillment requires follow-up in order to accomplish it. Simply by following-up, you are meeting their number one need. By following-up you are there to answer their questions as they arise. And if they’re going through that deliberative process, you can be 100% certain there will be questions, and significant ones at that. By following-up you are anticipating their needs. By following-up you are able to provide answers, resources and resolutions.

Right then, so are you willing to do what it takes to be a part of the 12% who close 90% of real estate sales in Canada. We imagine the answer to that is yes, and in the interest of generating more ‘opportunities’ we recommend you register with Real Estate Leads here and enjoy qualified online-generated home buyer and seller leads that are delivered to you exclusively and for your own protected region of the country.

Get onboard now, and lay claim to your region of choice. And once you’ve established contact with those folks, make SURE you follow up sufficiently!

Risky Reprieves: The Inadvisability of 2nd Mortgages to Avoid Bankruptcy

Published July 5, 2017 by Real Estate Leads

It’s well understood that one of the inevitable developments that come along with an extensively inflated housing marketing is having homeowners who are in over their head and very precariously perched when it comes to the mortgage they have on their home and the debt that’s assumed as part of it.

Those kinds of market conditions definitely exist in certain metro regions in Canada, and being ‘house poor’ puts you at risk of defaulting on your mortgage. That’s obviously going to be concern number one for homeowners who have gone in a little more head long than they thought, but it’s not the only decidedly unpleasant potential reality. It can also lead to bankruptcy, and certain people in certain areas and certain lines of work are more susceptible to it than others.

Here at Real Estate Leads, our online real estate lead generation system is proven valuable as a way for realtors to get more property listings, but we’ve also got our thumb somewhat on the pulse of trends and hot topics in the world of real estate and home ownership in Canada. So many of them are related to financing, and this one is really worth a long look.

First off, we’ll share what many of you may already know – there are not nearly as many bankruptcies declared in Canada as there are in nearly every other country in the world. However, does a lack of here mean the average Canadian consumer is doing better than their international counterparts? Much like the lack of mortgage defaults, there’s some foreboding facts to be unearthed if you’re willing to dig.

All it takes is a look at the Homeowners Bankruptcy Index, which is currently at an all-time low. That should be interpreted to be a positive, but it would seem there are fewer bankruptcies due to homeowners refinancing their debt by bundling it into 2nd (or even successive of that) mortgages.

Accordingly, that all-time low number is something of an artificial reality, and one that masks a very large potential problem for anyone who thinks a re-mortgaging of property is their way out of a financial failure.

More About The Index

Few if any of us are debt experts, so it’s entirely natural if you’ll need a little walkthrough of the explanation of the Homeowner Debt Bankruptcy Index. In their words, it measures the percentage of insolvent debtors who owned a home at the time they filed a bankruptcy or consumer proposal. Let’s now give you a quick walkthrough of the terms so that we’re on the same page.

To put it more simply, insolvent debtors are individuals that are unable to make scheduled payments to pay down their debt. When a consumer proposal is offered, it’s an attempt to negotiate them paying a percentage of their debt. Bankruptcy is when you state officially that you’re entirely out of means of paying that debt, and you – for all intents and purposes – ‘surrender’ to your debtors and seek an asylum from the bank if you will.

From there, a licensed insolvency trustee (LIT) liquidates your assets and distributes them to your creditors. Of course, that very rarely clears the entirety of the debt, but that’s where they start.

All-Time Lows

Interestingly, the Homeowner Bankruptcy Index is currently at an all-time low despite the very precarious situations so many homeowners are reported to be in. The number of people filing for a consumer proposal or bankruptcy that owned a home fell to just 7% at the end of May 2017. That’s a fairly significant drop from the 35% it was at in February 2011. If you look at the chart, you’ll notice that it’s dropped almost precipitously in 2016 and 2017. Further interesting is the fact that this was right when home prices across Canada began increasing exponentially.

Decline Is Due To Rise In Home Prices

The answer to why those two specifics add up when they really shouldn’t? It is because Canadians are using their homes much like a bank machine, withdrawing from the solidity of their equity. Homeowners with significant unsecured debt are now seeing being able to refinance this debt through a second mortgage or home equity line of credit as a viable option, albeit a risky one.

There’s 1.91 million Canadians with HELOCs (home equity lines of credit), and even more individuals and couples with a second mortgage. That’s not what you’d consider to be traditionally representative of booming incomes that would be the ideal reason to see delinquencies decline.

Monitoring agencies are warning that any softening of the market that results in a correction (see ‘bubble bursting’) of home values will almost certainly come with a sudden spike in homeowners who have no choice but to file for insolvency. The warning goes further to say that if this combines with a bumping up of interest rates, then the result could be the Homeowner Bankruptcy Index rising above levels that were experienced after the 2008 / 2009 recession.

Canadians have had no qualms about piling on record amounts of debt over the last 2 decades, and it would seem they’re now looking for every possible way to delay paying it back. Refinancing your mortgage to accommodate debt might work for now, but there’s no debating it leaves homeowners that take this option in a more vulnerable spot. A MUCH more vulnerable and risky spot. Bankruptcy or crushing debt aside, keep in mind as well that the less equity in your home, the less likely you are to secure good mortgage rate renewal terms. Worse terms mean higher rates, and you can be certain that it will definitely complicate your ability to pay your bills on time.

Part of being a reputable realtor is being frank with your customers about their purchasing power. You want to attract and retain clients, and in the interest of the first part of that we suggest you sign up for Real Estate Leads and begin receiving online-generated qualified buyer and seller leads delivered to you exclusively for your own area of the country.

Archives

All posts for the month July, 2017

Growing Numbers of Canadian $ Spent on U.S. Real Estate

Getting a Getaway: Recreational Properties Set to Become Increasingly Popular Purchases

Being the Results Agent: The Fast Track to Converting Real Estate Leads and Closing More Sales

Risky Reprieves: The Inadvisability of 2nd Mortgages to Avoid Bankruptcy