Thursday, September 22, 2011

Why should I use a Mortgage Broker?

At our office meeting the other day one of the agents stood up and gave his appreciation to our in-house mortgage broker for helping his clients acquire financing.  The story was that the clients had gone to their bank for financing for the home they wanted to purchase and were refused.  This agent then recommended they talk to a mortgage broker.  The mortgage broker was able to help them and even got them a better rate of interest. The clients were very happy to be able to purchase the home.

Here is a list of reasons to use a mortgage broker:

  1. You get independent advice on your financial options. As independent mortgage brokers and mortgage agents, they’re not tied to any one lender or range of products. Their goal is to help you successfully finance your home or property. They’ll start by getting to know you and your home ownership goals. They’ll make a recommendation, drawing from available mortgage products that match your needs, and you will decide together on what’s right for you.
  2. Save time with one-stop shopping. It could take weeks for you to organize appointments with competing mortgage lenders — and they know you’d probably rather spend your time house-hunting! They work directly with dozens of lenders, and can quickly narrow down a list of those that suit you best. It makes comparison-shopping fast, easy, and convenient. 
  3. We negotiate on your behalf. Many people are uncertain or uncomfortable negotiating mortgages directly with their bank. Brokers negotiate mortgages each and every day on behalf of Canadian home buyers. You can count on their market knowledge to secure competitive rates and terms that benefit you. 
  4. More choice means more competitive rates. They have access to a network of major lenders in Canada, so your options are extensive. In addition to traditional lenders, they also know what’s being offered by credit unions, trust companies, and other sources. And they can help you take care of other requirements before your closing date, such as sourcing mortgage default insurance if your down payment is less than 20% of the purchase price.
  5. Ensure that you’re getting the best rates and terms. Even if you've already been pre-approved for a mortgage by your bank or another financial institution, you’re not obliged to stop shopping! Let a mortgage broker investigate to see if there is an alternative to better suit your needs.
  6. Get access to special deals and add-ons. Many financial institutions would love to have you as a client, which is why they often offer incentives to attract creditworthy customers. These can include retail points programs, discounts on appliances, shopping clubs, and more. The mortgage broker does the math on which offers might be worth your attention when it comes to financing or mortgage insurance — so you get the perks you deserve. 
  7. Things move quickly! Their job isn't done until your closing date goes smoothly. They’ll help ensure your mortgage transaction takes place on time and to your satisfaction.
  8. Get expert advice. When it comes to mortgages, rates, and the housing market, they’ll speak to you in plain language. They can explain the various mortgage terms and conditions so you can choose confidently.
  9. No cost to you. There’s absolutely no charge for their services on typical residential mortgage transactions. How can a mortgage broker afford to do that? Like many other professional services, such as insurance, mortgage brokers are generally paid a finder’s fee when they introduce trustworthy, dependable customers to a financial institution. These fees are quite standard and nearly industry-wide so that the focus remains on you, the customer.
  10. Ongoing support and consultation. Even once your mortgage is signed and paperwork is complete, your mortgage broker is here if you need any advice on closing details or even future referral needs. They are happy to be of assistance when you need it.
I think that says it all.  Thanks to Mortgage Alliance Homeline Mortgage for providing this information to me.

When the going gets "Tough"...just call me.

Susan Tough

Thursday, September 15, 2011

Why do I have to tell you what they paid me?

Question:   We have a client who has a rental property and has offered our REALTOR® a referral fee if we send renters their way.

Is this allowed?

If a REALTOR® is not licensed to provide property management services and, as above, refer a tenant to a client – the referral fee (if received) must still be paid through the Brokerage as Property Management activity is included in the ‘trading services’ definition.

Licensed REALTORS® and Property Managers are under the obligation to report any and all remuneration (referrals, finder’s fees, commissions, expense reimbursements, bonuses) that is earned as a result of ANY ‘trading services’ activity, to their Brokerage.  Funds must be remitted to the Brokerage from the client and then paid out to the REALTOR® through the Brokerages Commission Trust account.  If a licensee accepts any remuneration directly from a client (Buyer, Seller, Landlord) they are in breach of their agent agreement to the client and the rules of their licence and Brokerage. Under the definition of Trading Services in section 1 of the Real Estate Services Act, “finding real estate for a party to acquire or finding a party to acquire real estate”, includes tenants and/or leases and as such licensees with a trading service license can provide this service however; they could not provide any of the other services defined under Rental Property Management Services in section 1 of the Real Estate Services Act they risk a suspension, fine, both or loss of their license issued by the Real Estate Council of British Columbia.

Something an innocent as a REALTOR® pocketing money a client reimbursed them for some special advertising they requested can cause the REALTOR® and the Brokerage many hours of investigation, reports and possible Hearing with the Real Estate Council.
To put it simply – Don’t do it!!

When the going gets "Tough"...just call me.

Susan Tough

Thursday, September 8, 2011

Out of the mouths of babes……

Do you remember when you bought your first home??  I do.   My REALTOR® was a girlfriend and long time, very experienced one.  She looked after everything.
 My daughter bought her first home a while ago.  She was not near me or in a city I was familiar with so providing her with my assistance was difficult.  I thought I had hooked her up with a good REALTOR® – turns out…..not so much.
After the process was done and I had returned from Israel– I received an education in “first time buying” from Samantha (my daughter).
As productive REALTORS® we do things over and over again – we often forget to address some of the many details we take for granted.

  • How do we know what inspector to use – are they all qualified and insured? What and when do I have to pay them?  Can we use any little thing that’s found in the inspection to get  out of the deal?
  • Do we get qualified for financing  first or do we look around for what we want first?  Do I need a Bank or a mortgage broker?  What is mortgage insurance and why do I need it?  It’s expensive – do I have to come up with that extra money or can the mortgage amount include it?
  • The down payment is a gift - how does it have to be recorded?  Is it OK that we receive it a couple of days before we have to close the purchase?  When do we need the deposit money to be available? Does it matter to our qualification for a mortgage?
  • Is an appraisal always required?  Why or why not and do we have to pay for it?
  • Property transfer tax – what is that? How do you avoid it?  Does it matter if you are a First time buyer in BC or anywhere?
  • Do I need a lawyer? Will I have to pay them – how much? – Before they do the work or does it come from the financing? 
  • How much time do we need from writing the offer, doing our due diligence, removing our subjects and then completing the purchase?
  • If we ask for the appliances can they switch them out for older ones – or different ones? 
  • How expensive is house insurance?  When do we have to have it arranged? What do we need to know about the house to tell the insurance company in order to get a quote?
  • Utilities – are they automatically hooked up?  What if we have never had a utility account before?
  • If the seller paid the property tax do we have to pay them back?  Are there different ways we can pay our property taxes every year?
  • What are strata fees?  What do you mean – there are rules we have to follow to live in a strata complex?

As a REALTOR® reading this, ask yourself if you have provided the answers to all of these questions in a timely manner to your Buyers.  Are they worried about things they have not communicated to you?  Do they even know what questions to ask? – Not likely.  With something as big and new as a first time home purchase, the clients have no idea how much they don’t know.  It’s the REALTORS® job to anticipate those questions, provide guidance and answers to help the clients be prepared for each step that comes along.  It will make the process much less stressful for the Buyer and likely facilitate the transaction closing smoothly, without issue.
As a Buyer reading this – did your REALTOR® have the answers to all of these questions?  DO you feel you were adequately prepared and helped through the process – did it go smoothly?  If you are just now contemplating a purchase – interview potential REALTORS® - ask them for references. Arm yourself with the questions above and be sure you feel confident they know the answers.   Purchasing a property, whether it’s your first or fifth, is a very big deal.  One that should be exciting, positive and with minimal stress (it’s hard to avoid completely).  The right REALTOR® can make a huge difference to your experience.
If you need help finding one or if you would like the answers to these questions – just ask. 

When the going gets "Tough"...just call me.

Susan Tough