Realtor Best Practices with Electronic Signatures & Exchange of Documents

Published September 9, 2019 by Real Estate Leads

We try to make a point of keeping this blog as a nice balance between real estate market news and industry developments along with tips for realtors that allow them to be better in what is an extremely competitive career field. As we continue to stress, knowledge and industry-savvy is very much power when it comes to retaining clients and building your personal real estate corporation. Today we’re on that side of things, and hopefully making you more aware of some of things new realtors may be not be aware of after finishing their licensing course.

Prospecting new clients isn’t easy, and that’s a part of what makes our online real estate lead generation system here at Real Estate Leads so valuable for those who are new to the business. It harnesses the power of Internet Marketing (and Internet surveys more specifically) to put you more directly in touch with people who are genuinely considering making a move – either buying or selling – in your local real estate market.

Today we’re going to look at what are the best practices when it comes to electronic signatures and exchanges of documents. Something that’s a fairly regular occurrence nowadays, and so it makes sense to be as in-the-know as possible with this stuff.


When it comes to e-signatures or wet ink signatures, it is best to have someone be witness to the signatures. One of the benefits of e-signatures providers is that they provide the ability to identify the exact time and location for when the signature was placed on the document, doing so with security certificates. However, be aware that not all e-signature software suites provide security certificates when applying a signature to a document.

Further, programs and apps such as PDF Expert are not set up to provide digital security certificates when documents are signed. They are beneficial in the way that they properly flatten and embed signatures into documents, but they’re not as secure as a digital certified software like – among others – DocuSign.

It is important to note that the real estate regulatory bodies in most Provinces have legislation requiring that every service agreement must be in writing and executed in the presence of witnesses. This applies to agency agreements and offers to purchase, and means that any security certificate provided by credible e-signature providers are not recognized as the witness to the e-signature – at least not yet.

This is something you’ll need to determine for the Province you’re living and working in.

Hand Drawn vs. Stamp Signatures

A hand drawn e-signature – or ‘wet’ signature as they’re also referred to – is created when the signer’s handwriting is entered electronically on a touch screen. This is done with either your finger or a stylus pen. Each signature will be different, and they look very much like what your actual ‘real’ ink signature would.

The stamp e-signature is very common these days. You pick your signature and an initial style from a list of fonts and then place them on pre-defined areas of the document by dragging and dropping with your mouse or cursor control pad on a notebook. The click is then digitally recorded with a security certificate.

Mandatory & Standard Forms | Different Rules

Here, again the different Provinces will have different mandatory forms required of realtors when conducting and registering property transactions. One constant is that commission forms are mandatory for use by all registrants and treated differently than standard forms signed by realtors in Canada.

In most provinces the policy with mandatory forms is that only a hand drawn e-signature is permitted. Where the Real Estate Act requires an agreement to include a written signature, the signature requirement usually needs to be an electronic signature that is:

  1. a) A digital representation that can be seen to be an authentic representation of the individual’s handwritten signature; and
  2. b) Digitized and embedded permanently in the written agreement being submitted.

Either hand drawn e-signatures or a stamp e-signature can be used on standard (non-mandatory) forms in most Provinces, but again it’s best to confirm this on your own.

Electronic Signatures & Exchange of Documents

Generally speaking, electronic signatures (e-signatures) are no different from wet signatures. You and/or your clients will be affixing your name to an agreement in order to provide tangible proof that you are hereby agreeing to the terms set out in the document. Choosing to do this with ink, with a stylus, or with a digital signature serves the same purpose.

Bear in mind as well that when there are multiple parties to a contract (spouses, more than one individual on title, etc.), all parties must sign individually, although they can wet ink signatures or if you or e-signatures providers like Authentisign, DocuSign, Faltour, and more that are currently out there.

Precautions when Authenticating Signatures

It’s true that whether it’s a wet ink signature or an e-signature, there is always the possibility of fraud. Experienced realtors will always take precautions to check the identity of the clients. Asking questions about the content of documents to both spouses separately can help you confirm that both parties are aware and agreeable to the contents of an agreement.

And yes, this lack of certainty applies for wet ink signatures as well. In instances where you may not be physically present when the documents are signed it is best to keep a record ofthese conversations in your notes.

e-signatures and exchange of documents are a new development in the real estate practice, but overall the steps to take to ensure agreements are signed properly do not differ much from ‘original’ wet ink signatures – meaning the types with ink from a pen held in hand. Use common sense and you’ll be fine 90+% of the time.

Sign up with Real Estate Leads here and receive a monthly quota of qualified, online-generated buyer and / or seller leads that are delivered to you exclusively. They’re yours, and you’ll be the only one to get them. Plus, you also have your own similarly exclusive region of any city or town in Canada, and this service will go a long way towards turning you into one of the busier local real estate professionals there. Get on board today and claim your territory.

How Clients Can Reduce Taxes on Real Estate Investments

Published June 25, 2019 by Real Estate Leads

It’s been said a hundred times before, but it’s as true as ever – an informed and knowledgeable realtor is a reputable realtor in the eyes of a client who’s purchasing real estate as an investment. Much of this knowledge is the type that comes over time as a realtor moves over the course of his or her career, but of course there’s plenty you can do to speed up the process and become more in-the-know about the housing market and what is possible within it.

The success you’ll have as a realtor is going to have a dollars-and-cents relation to the number of new clients you’re able to prospect. With over 10,000 realtors licensed and working in Canada, it’s very fair to say that a larger slice of the pie isn’t going to be easy to come by. That’s a big part of why our online real estate lead generation system for Canada here at Real Estate Leads is so advantageous for realtors. It gives you more in the way of the opportunities you need to turn prospective clients into established clients. And yes, being perceived as a ‘knowledgeable’ realtor will go a LONG way in that regard.

This will be true of clients buying homes as residences, but it’s especially true for those buying homes as investors. Any piece of information you can share with them that will benefit their bottom line in both the purchase and future resale of the property will be most welcome and put you in the most favourable light.

Which leads us to today’s topic – Helping clients pay less tax on real estate investments.

Fewer Taxes – Happier Clients

There’s no getting around the fac that taxes have the potential to cut into the profits on a real estate investment. Investors who have an understanding of complexities of the modern tax landscape have the potential to make significant tax savings. If you can be the individual who guides them to having that understanding, you’re going to have satisfied clients and, fortunately, satisfied clients are often inclined to be repeat clients.

Here are two tax strategies that can be put to use by your investor clients:

  1. Make Purchase Mortgage Tax Deductible

In Canada, investors are allowed to transfer the proceeds from a home mortgage loan over to a loan used to buy a rental property, and once that’s done then this loan is tax deductible.

For example, let’s say an investment property is purchased for $500,000 with a mortgage for $400,000 for the first year in a variable mortgage. Once the market value of the investment property has increased and the mortgage is paid down, there is now the option of refinancing or selling the property.

Let’s now assume that in the 5th year the investment property is sold for $600,000 – creating a profit of $100,000, plus the proceeds of the pay down in the mortgage for another $35,000. After fees and capital gains tax, the $90,000 coming from this sale could be used to pay down the mortgage on your principal residence. Provided the mortgage is set up to allow a re-advance, the $90,000 could be re-invested.

Now that the interest on the $90,000 portion of the home mortgage would be tax deductible, and is that way because it was used to purchase the investment.

  1. Reduce Taxes by Setting Up a Company or Family Trust to Operate Investments

It’s helpful to know that there is usually a minimum level of income or asset base that is required before the accounting and legal cost of setting up those planning options become worth the tax savings. One simple tool that is at investors’ disposal here in Canada is the ‘Section 85’ roll over.

This is a tax deferred roll over in Section 85.1 of the Tax Act, and it makes it possible for a Canadian to transfer real estate holdings and other kinds of investments into a company while not paying any recapture or capital gains tax at that time. For a family looking to grow their investment holdings and then aiming to manage those assets for the next generation, the section 85 roll over approach is a solid choice because it allows for the required taxes to be deferred at the outset.

Then over time the investor will be able to create a family trust, which could be used to manage the ownership of the new holding company long term. Of course, investors should seek professional advice from a Chartered Professional Accountant (CPA) or tax lawyer before implementing any tax strategy – and ideally you’ll be able to refer a good one to them!

Sign up for Real Estate Leads here and receive a monthly quota of qualified, online-generated buyer and / or seller leads that are delivered to you exclusively and for your very own and privately-served region of any city or town in Canada. That region is all yours, and the leads are all yours alone too. It’s an excellent way to really supercharge your client prospecting efforts, and you’ll almost certainly be pleased with the opportunities it creates for you.

5 Social Media Marketing Tips for Real Estate Agents

Published June 18, 2019 by Real Estate Leads

It used to be that realtors who were skeptical about this new ‘social media’ trend could actually dismiss it as a passing fad, or perhaps even as something that won’t be as relevant for ‘their’ clientele. Well, here we are in 2019 and the first part of that is now definitely untrue, and in truth the second part of it isn’t likely very accurate either.

Social media is used very integrally to promote consumer interests – and pretty much any consumer interest. Real estate is no exception to this, and almost certainly the majority of you are already putting at least some part of your budget into social media marketing for your business and in promoting properties that you have listed. And it’s 100% percent true that older people have now come around to the appeals of social media too. Not to the same extent millennials and the like have, but still enough that it’s a viable advertising means for people with ‘deeper pocket’s too.

Real estate is a competitive business, no one needs to be convinced of that. Finding homes for buyers, and buyers for homes, isn’t easy and effectively prospecting clients is a must if any realtor is to be successful. Here at Real Estate Leads, our online real estate lead generation system is an excellent way to see to it you have more in-contact opportunities with prospective clients.

Social media can be helpful in this regard too, and especially in the way it increases your visibility as a real estate expert for your chosen area. Today we’ll look at 5 different tips realtors can use to maximize

  1. Create Your Business Page

It’s true that Facebook is not the social media app of choice for young people any longer. However, it is the one of choice for people who buy homes. Yes, greater numbers of adults are enjoying using Facebook to keep up with all the activities of their friends, and any time you pique the interest of a potential homebuyers with the ability to actually buy a home then you’ve potentially done very well.

Facebook allows you to create a business page, and it’s entirely different from the ones you can have for your personal profile. It’s highly recommended to create your own Real Estate Business Page on Facebook, and use it to promote yourself, your properties, and – last but not least – a resource page for testimonials for satisfied customers. You can link it to your own website, or your blog (there or otherwise), and a whole lot more.

It will take about 10 to 15 minutes of your time, and you also have the opportunity to place paid ads through it that will be shown to Facebook users. Highly recommended.

  1. Make Your Facebook Page the Hub of your Social Media

Plain and simple, your Facebook Business Page should be your hub and the main funnel for your online presence. Your followers’ email and phone numbers can be collected with FB messenger, ad forms, or with a chatbot. The interface of the page provides access to your photos, calendar, stories, bio, contact information, timeline, events, and more. People who are comfortable in the social media realm will like seeing that you’re comfortable promoting yourself there, and they won’t hesitate to contact you and express whatever real estate interests they may have.

In addition, you can even manage your Instagram business from your Facebook page. A great Facebook page really can go a long way in making your real estate business visible to prospective customers

  1. Focus on Customers

Traditional marketing has always been geared around understanding your target customers’ needs, and then tailoring your strategy and ads campaigns to them. Inbound marketing is entirely different. It’s based on the strategy of creating content that your target market with an Attract —> Engage —> Delight model. The last part of that – delighting – is all about giving your customers what they want.

What goes into that depends on the type of client base you’re targeting, but research goes a long way here.

  1. Inbound Marketing with SEO

There may be some realtors who are familiar with search engine optimization, but if there are we imagine they’re few and far between. Having the content you enter on your social media profiles beign SEO optimized is very important. Now if that’s beyond you, no problem, as there are plenty of paid resources online that can make it easy for you to determine which keywords are most searched on that subject matter – and most often the ones you’ll be after will be along the lines of ‘homes for sale in _____’ or ‘________ real estate’

The objective is to rank your content on the first search results page, and it’s really advisable to hire somebody to do this for you effectively if you can’t do it on your own. It’s an essential part of social media real estate marketing (there’s one right there 😉 ) that works.

  1. Tell a Story

Instagram Stories and Facebook Stories are well suited for promoting real estate. Many people will even insist that this should be your template for creating new ads. Tell a story with photos and video of the real estate you’re promoting. Don’t focus on selling primarily, and instead put your focus on attracting and engage your audience. Engaging content is the key, and as with everything, practice makes perfect. Be smart about it and you won’t be able to go too wrong, and you’ll almost certainly improve with them.

What’s more, if you do create one and decide it’s not to your liking you can always take it down as quickly as you like.

If you take nothing more from this, make sure your social media marketing starts with a Business Page on Facebook. Being on multiple platforms is advisable, and Instagram and Twitter also lend themselves to real estate business promotion too.

Get on Board with This Today

Sign up with Real Estate Leads here and receive a monthly quota of qualified, online-generated buyer and / or seller leads that are delivered to you exclusively for your similarly-exclusive region of any city or town in Canada. It’s your region, and they’re your leads. You’ll almost certainly come to see it as money very well spent in the interest of growing your real estate business in much the same way so many other realtors across Canada already have.

Want to read about that yourself? Check out our testimonials page.


Redfin The Next Disruptor to Arrive in Canadian Real Estate Business

Published February 19, 2019 by Real Estate Leads

We’ve talked briefly in the past about how the trend of industry disruptors has extended to the Real Estate world as well, and as we are now firmly into 2019 we are seeing yet another example of it again. Indeed, the ways the real estate business has been for many decades have changed very drastically over the course of just the last one, and as you might expect these changes have been very primarily fuelled by advances in digital technology.

As a realtor, one of the things that you must do is accept the reality of the situation. That reality is that these advances make it more of a challenge for you to work as a realtor exclusively in traditional means and approaches and still have the type of success that you envision for yourself. You definitely need to adapt, and revise your strategies and skillsets offered because, as we’ll discuss here today, there are new disruptors arriving in Real Estate all the time and that’s not likely to change.

Here at Real Estate Leads, our online real estate lead generation system is one major advantage for realtors that relies on the same trend where advances in digital technology are coming fast and furious. It leverages the power of the internet to provide real buyer and seller leads based on prospective buyers and sellers filling out forms online. There’s more to it than that, but long story short what you can know is that our service is one digital technology advancement that you can – and should – see very favourably.

Redfin Arrives in Canada in March

Now Redfin, like PurpleBricks before it, is yet another entry into the real estate business that most realtors will have difficulty seeing favourably. That’s because it markets itself as a more affordable way for people to buy and sell homes, and there’s no getting around the fact that services like Redfin and PurpleBricks eliminate a lot of the need for what you’re able to provide as a realtor. Not ALL of it, but a good portion of it.

We’ll say briefly that these types of websites and their services certainly won’t eliminate the need for realtors, but it is changing the playing field for sure. Let’s have a look at this.

Redfin is based in Seattle and will open in Toronto and Vancouver by March. It has plans to expand to other major Canadian markets once well-established in Canada’s 2 largest urban metro centres.

Redfin is a technology-powered brokerage that will have its own agents working in their offices while delivering much of the same services that you do as a realtor. You do it in person, they do it remotely via the Internet. That’s the start of what you need to understand about Redfin.

Redfin was built on the understanding that nowadays so many consumers start their search online. Being a technology-first brokerage helps them meet customers at a lower cost, and obviously that’s a HUGE benefit for the prospective home buyer or seller. Having services provided online means a streamlining of many of the processes that would require some back-and-forth, and time delays, when these customers are working person-to-person with a real estate agent.

Since 2006, Redfin has established its presence in more than 85 markets in the USA, and now Redfin’s website and mobile apps will show all homes for sale through the local MLS in Toronto and Vancouver. It will also put sold prices in those markets on display, whereas previously clients requested that information from their realtor and then waited for him or her to get back to them with it.

Canadian Market Plans

Redfin’s aim is to eventually offer services in other major Canadian cities, but that will obviously take time. For those of you working in the GTA or GVA, however, this powerful competitor is arriving soon and is expected to take root quite quickly. You still have the ability to prospect clients in traditional ways, and many people will still prefer the in-person service and human interaction / trust part of working with a local real estate agent.

That said, all realtors are going to lose prospective clients to these types of services with Redfin and PurpleBricks. That’s the just the way it is. You may need to rethink and reorient your service and promotion platforms and how you present yourself to clients, and it may be something you need help with. If so, don’t be afraid to go back to the drawing board with a real estate business consultant expert.

Take note of the fact that salespeople working for Redfin will be employees of the company – not independent contractors – and will be paid bonuses based in part on customer satisfaction. The number of agents in individual Canadian offices would be a reflection of how busy those offices become.

Agents won’t be recruited in the way a conventional real estate brokerage does, rather customers will be recruited and then agents will be brought in based on the level of increased demand.

Redfin will charge home sellers a 1% listing fee, and the remote agents will provide complete home-selling services, including pricing and staging advice, free professional photography, a 3D walkthrough of the home, open houses, yard signs and nicely designed and put together marketing materials.

That’s right – a lot of what a realtor did him or herself in person for decades. Times change, and you need to change with them.

Big Potential Savings a Necessity for Many Now

Redfin has provided estimates on what they’re able to offer in the way of savings; for example, a seller in Toronto will save $11,250 on a $750,000 home sale when compared to paying a listing commission of 2.5%. The listing fee does not include a buyer’s agent commission, but that’s paid by the seller here with Redfin.

The appeal of services like Redfin are furthered by the reality that nowadays it’s harder to get a loan. Foreign investment has driven prices up, and there’s ever-greater numbers of people who need every last dollar possible put towards the house. In such a scenario, the cost savings made possible with services like these are obviously going to appeal to a lot of people.

Lastly the Redfin model rewards customer service, so agents are accountable to deliver the best outcome for their clients. Customers are asked to review the service they received from their Redfin agent, whether they buy or sell a home or not. The reviews will then be published on the agent’s online profile, and agent bonuses will then be based on these reviews – among other factors.

The New Realities

These ‘disruptors’ aren’t going to stop arriving any time soon, and they’re being seen in all sorts of different businesses and industries that have been the same way for decades up until now. It’s a trend that’s here to stay, and overall it’s a good one as it puts more clout back in the hands of the consumer and we ALL benefit from that – yourself included.

As a realtor, you’re going to have to adapt and, as mentioned, revisit all of your business promotion and marketing approaches to ensure you continue to have the same flow of business you’ve become accustomed to. If you’re starting out, you may be at an advantage as this ‘new reality’ will be the only reality you’ve ever known.

Experienced or new to the business, all realtors should sign up with Real Estate Leads here and receive a monthly quota of qualified, online generated leads delivered to them exclusively for their similarly-exclusively served region of any city or town in Canada. Once you have it, it’s yours and yours alone and only you will receive the buyer and / or seller leads for it. Most realtors who’ve already jumped on the opportunity now see it as marketing budget well spent, and we’re sure you’ll find it to be the same.

How to Start an Effective Email Drip Campaign for Realtors

Published January 28, 2019 by Real Estate Leads

In the ever-digital world of the 21st century, your online marketing efforts can never be second rate. That’s as true for realtors and their real estate business in the same way it is for everybody else. It’s of course just one of many ways you should be approaching the challenge of prospecting for new clients, and that aim is really at the core of everything you do as a realtor when you’re not providing services to existing ones.

Here at Real Estate Leads, our online real estate lead generation system for Canada is an excellent way to harness the power of the world wide web and get it working for you to provide you with real, genuine quality leads that put you in touch with people who are equally genuinely considering buying or selling a home in your locale. Nearly every realtor who gets on board quickly comes to see it as money well spent as part of their business promotion or marketing budget, and we’ve been very pleased to see how beneficial they’ve been finding it.

Email marketing campaigns are, like anything, only effective when done right. A ‘drip’ email campaign is particularly highly recommended because it’s less obtrusive and tends to land on recipients who’ll be more open to receiving the communication. Today we’re going to discuss the basics of putting together one of these email campaigns, so let’s get into the 4-step process.

This is something you can do on your own, even if you’re the most digitally non-savvy person around.

Why a From-Scratch Real Estate Drip Email Campaign

Pre-designed real estate drip email campaigns that you can buy ready-made are usually not a good option. Done badly and they’ll result in a prospective buyer or seller hitting the ‘unsubscribe’ link – and that’s the end of your communication channel with them.

With that warning out of the way, you also need to know that they are NOT getting the same email from your competitors.

How Often Should Emails Be Sent?

Email every day? Once a week? Every month? More? Less? Generally speaking, the protocol regarding this will depend on local market conditions (the ‘speed’ with which homes are moving), the type of market, and the properties of clients you typically serve. If it’s a ‘fast’ market, you may prefer to send emails at the beginning of your real estate drip email campaign with greater frequency / less of a gap between them.

With ‘slower’ markets you can let the be spread out a bit more.

Keep in mind that no matter the type of market, the frequency of emails MUST drop off as you move further into your campaign. This is important. Successful long-term real estate drip email campaigns will typically only send out 1 email roughly every 3 months once the first few have been distributed. Make sure you do the same

Email #1 – 2 Days After List Entry

This real estate drip email campaign is for buyers but can also be used for sellers.
Prospects will have already received one email prior to this, and that would be the auto-responder email.

Most agents will determine their email recipient list from forms filled out on their website site, As a result of this, prospects will receive one email that is delivered with a document (or a link to the information) along with a thank you. That first email is immediate, and it should be sent two days later.

The aims with this email are as follows:

  • Appraising them of the process if they decide to buy or sell. In the first paragraph they’ll learn that this is the first of four emails they’ll receive. This should always be done because often there’s a large decrease in the unsubscribe rate if they make the recipient aware that they’re not going to be spammed incessantly.
  • Giving them a link to valuable information, including links to area maps and descriptive pages for the area. You’ll almost certainly be covering an area larger than just one suburb or the like and people get confused about all of the area names found in the MLS.
  • Use of wordage and sentences that results in a a high click-through percentage and low rate of unsubscribers.

Email #2 – 5 Days After List Entry

The first email introduced the prospect to the MLS area maps and descriptive information. Now, your 2nd email informs them that they can stop doing manual searches and enjoy the convenience of automated email alerts sent with new listings and price changes for listings that are a match for their property criteria.

They will be more familiar with the areas now, and they’ll likely use that information to tailor their searches even more.

Many soon-to-be serious buyers will spend some time in this automated email listing alert system setting up a search, and that’s especially when you want automatic listing alerts to be hitting their inbox nearly every day.

Email #3 – 8 Days After List Entry

A considerable number of your email recipients / prospective clients still won’t yet be ready for the automated listing reports. For this reason it’s advisable to take them back to your IDX search page instead, and show them how to get a lot more detail on each listing that hasn’t been displayed in the IDX results.

By doing this you’ll make it more likely that they return to the site again and again requesting expanded listing reports. You’ll need to manually create these reports and send them to these prospects, but if put effort into them and prepare solid reports that are also laid out cleanly and attractively in the document then you’ll be making real progress with securing interested buyers as new clients. Put your best effort into all of this!

Email #4 – 12 Days After List Entry

The last automated email extends your appreciation to these would-be clients for sticking with you and not choosing to unsubscribe, and it also informs them that you’re happy to keep them on your follow-up list for quarterly sold property statistics reports because they seem to be interested in making a move in the local real estate market.

You acknowledge the prospect’s continued interest in the market, as well as reaffirming that they’ll only receive four emails a year. Done right this keeps them interested enough to stay on the list.

Long-Term Follow-Up

Right after each calendar quarter-year ends, it’s smart to go into your MLS system and generate a sold property statistics report. Define it by type of property (i.e., residential or commercial). It should require only about ten minutes of your time to produce a PDF file and upload it to your website.

Next, go to your email list and send out a blast email to the entire list providing a link to the report, and if you have some solid relevant commentary to add on the previous quarter and the numbers in the report – go ahead and add it.

Stick to this drip Email protocol and you’ll very likely see a low unsubscribe rate. In most cases when people do choose to unsubscribe it’s because they’re no longer interested, or have purchased a home in another market. The ones that continue to stay subscribed are worth more of your attention, and if you have a strong feeling about one or more of them you can even get back to the good old tried-and-true basic approach of making a visit to them in person.

Be confident, and do everything you can to have the knowledge you need to be local real estate expert before you do!

Sign Up Today!

Sign up with Real Estate Leads here and receive a monthly quota of qualified, online-generated buyer and / or seller leads that are delivered to you exclusively, and also for your similarly-exclusively served region of any city or town in Canada. It’s yours and yours alone with Real Estate Leads, and that puts you in a real position of strength to have the best leads in that area being delivered to you and you only.

It’s a dynamite way to supercharge your client prospecting efforts, and we can’t recommend it highly enough!


Real Estate Sales Drop Hard Across Country

Published January 22, 2019 by Real Estate Leads

Your take on the recent trend of cooling Canadian real estate sales will depend on who you are in the real estate market. If you’re an owner or an investor with funds in real estate, you likely won’t see it very favourably. Alternately, if you’re a home buyer – and in particular a first-time homebuyer, the recent news that sales dropped to a new multi-year low last month to close out 2018 will be cautiously promising.

As a real estate agent, of course, any downturn in the market isn’t what you want to be hearing. Fewer sales equates to less business to go around for the ever-greater numbers of licensed realtors in the business. Situations like this make being able identify, impress, and retain prospective clients increasingly important for a realtor.

Here at Real Estate Leads, our online real estate lead generation system makes it so that you get more out of the first part of that equation, and capable realtors have a way of using the second part to ensure the third and establish long-term clients. The same type of clients who are likely to recommend you to others as well. It’s a positive all around.

But back to topic, what’s to be made of this trend that continues to see the real estate market in Canada cooling off so significantly?

Canadian Real Estate Sales Dip Like They Haven’t Since 2012

Canadian real estate sales indicated one of the worst Decembers in years. A mere 21,909 sales went through the MLS nationwide for December, and this was down 34.24% compared to the month before. This is a 19% decline compared to the same month last year, and sales for the month have only been lower a pair of time over the past 10 years; 2012 and 2008.

The December numbers and annual growth rates were worth noting. Monthly declines are always seen in December, but this one was the biggest since 2007. What’s more, the annual decline is the third consecutive one to occur here, and the most pronounced one since March 2018. Since February of 2016, the annual growth rate has been trending lower.

Dec. ’18: Only a Single Major Canadian Real Estate Market Grew

The observed market declines were consistent across the board, but a few markets did better than others. Montreal came in at 2,825 sales for December, which was a 2.5% increase compared to the same month 2017. Ottawa had 677 sales, a 12.9% decrease from the previous December. Winnipeg’s number was 495, and also down 14.4% from the same time last year. Facts are facts, and only one major market with more than 500 sales last year grew over the course of 2018.

Scenario for Canada’s Bigger Urban Centres

We’ll start with Toronto and Calgary here. Toronto reported 3,781 sales in December, a big decline of 23.3% compared to December last year. Calgary reported 985 sales, a similar biggie at 24.2% down from one year ago. The CREA defines both those declines as middle of the market, however, and relatively speaking.

Of course, market restrictions in both Toronto and Vancouver can been credited with a large portion of the sales declines seen in Canada’s 2 biggest metropolitan areas. Mortgage stress testing has been a big factor as well, and should continue to be this year as well while the new definition of a ‘quality buyer’ is still a work in progress.

The risk of course is looking at those factors in a vacuum, but it’s safe to say that a broader weakness is being observed across the country. The fact that markets not subject to a foreign buyer tax are also seeing weakness in sales supports this understanding.

There are some that suggest that more Nationally-focused mortgage stress tests would be a good idea, but industry insiders counter that by saying that most markets with declines do not have home prices detached from local incomes (which is the explicit scenario in Vancouver and Toronto). That doesn’t mean prices are fair value, but it does indicate that the stress test has had minimal impacts.

It remains the way it’s always been in that a typical family in most cities can afford a typical home. The consensus seems to be that it’s primarily households that would be buying ‘beyond their means’ are the ones being impacted by the restrictions – and for many of them they might actually be glad for the wake-up call! In conclusion, though, and when we look at this objectively we can see that the impact of rising interest rates, and a contraction in general credit applications are behind the market dips. This happens nearly every time interest rates rise, and they are always moving in one direction or another.

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