Importance of Receiving expert advice and realizing definite opportunities

At the start of a new year, I try to reflect on the previous year’s successes and challenges. Last year was one of dramatic change. We started 2022 with record low mortgage rates and a flourishing real estate market. By mid year, rates had climbed and the real estate market cooled.

We’ve entered 2023 with record high mortgage rates, both fixed and variable. In addition, the real estate market is confusing for both buyers and sellers, and the bad news published in the media every day is causing many to sit on the sidelines.

With 30 years working in mortgages, I have learned that in difficult and confusing times, experience makes a difference. One thing my years of experience is sure of is there are opportunities in challenging times like this, and these circumstances won’t last forever.

Before writing this article, I interviewed 4 savvy real estate agents from Oakville/Burlington, Cambridge/Brantford, Hamilton, and Niagara.

Each agent had similar answers and mentioned they had qualified clients waiting to buy—sitting on the side lines because their clients felt they didn’t have all the facts needed to deal with this market. They were paralyzed by fear.

I’d like to share a case study that my team completed in late 2022. You might share this actual scenario with your clients to help them move from the sideline and benefit more than they might expect.

My clients purchased a small property with 2 bedrooms and one bath in the summer of 2019. The wife found out in the fall of 2022 that she was pregnant and they would need a more suitable home by the spring.

When they contacted me, I detected their anxiety over the rising mortgage rates and a slower real estate market to sell their existing home.

After listening, I asked if they had spoken to their agent about the value and desirability of their home, and they said they hadn’t. They assumed the market was slow for all homes because that’s what they heard in the media. I suggested they reach out after our call.

Next, I calculated what additional funds they might require. Using their existing mortgage of 2.89% and a blend of current rates, they were stunned to hear their new rate for the remaining 2.5 years would be 3.35%, and the stress test rate would be 5.35%. I assured them that a new pre-approval could be prepared within 24 hours.

The next day, the couple confirmed their agent had estimated their home would sell for $150,000 more than they paid for it, and as it was an ideal starter home it would sell quickly due to the strong demand.

A few weeks later the clients purchased a 3-bedroom home with 2 full baths and a backyard. This home had been listed for 3 weeks, and they were the only offer!

The additional mortgage at a blended rate of 3.35% was affordable due to pay raises they had received since their first purchase.

The moral of this story, and supported by the agents I interviewed, is that the fear and anxiety clients might have will keep them from making wise decisions. Receiving expert advice and realizing definite opportunities releases clients from fear and allows them to move forward.

I’d like to thank the agents who participated, and I hope you find this case study helpful.

Our next article will focus on strategies for clients renewing this spring or those considering leaving a variable mortgage.