I want to first say that change is always met with reluctance. Salespeople, for the most part, don’t like any kind of change because it leaves many of them with the feeling that the world is moving under their feet. I know because I’ve been in sales for 30 years and even as a full-time trainer a big part of my business is selling my services.
However, I still applaud Canada’s Finance Minister for tightening controls on the mortgage market. Home ownership is a privilege that should require someone to save up, maintain a good credit history, and have the ability to repay the money without too much burden. These are simple prerequisites that guarantee a potential buyer has ‘skin in the game’.
The slightly tighter restrictions placed on borrowers that were announced this week will protect the Canadian real estate market from large swings in value. They will manage the quality of potential buyers and will result in controlled, healthy growth. This actually creates the stable environment salespeople want, even if in the short term it seems like there will be less business or lower house prices.
With every challenge comes opportunity. Sure, when the changes come into effect homebuyers may not be able to afford to borrow as much money and they’ll have to adjust their aspirations accordingly. But this gives Realtors and mortgage professionals opportunities to establish stronger relationships and create a sense of urgency over the next couple of months.
First, you have the chance to create long-term relationships when working with marginal buyers by helping them adjust their expectations and understand what they can realistically afford. You can bring added value to the relationship by becoming their trusted advisor, so that when they’re ready to buy you’re the person they want to work with.
Second, you have a great reason to call all of those pre-approved fence sitters and cooling prospects to encourage them to get in the market NOW. At the slowest time of year for our business, you now have a fantastic motivator to get things moving.
Third, the changes in lending will stave off future problems by ratcheting down what could have been a volatile market. These changes may slow the market down temporarily, but they will also ensure you don’t see the wild fluctuations in prices and sale volumes that make it impossible to manage your cash flow. This will help tremendously in planning your business and achieving your goals.
Educate yourself about the lending changes. Think about how they affect your clients. More importantly, make the most of this opportunity to educate your clients and build relationships.
I wish you continued success in 2011,