Make It Happen

tough market

The sweet spot – and where to find the gold

40 I SUMMER 2022 CMBA-ACHC.CA CMB MAGAZINEISTOCK.COM

E

BY DUSTAN WOODHOUSE

What to do when the market slows? There isn’t a one-size-fits-all answer here. As such, what follows is really two different pieces written for two different audiences.

AUDIENCE 1

You’re new(ish) and don’t have an established network, an established database, or an established niche (or two). You might be freaking out a little in the summer of 2022 as purchase activity drops and rates skyrocket.

You may be wondering if it’s all over. It is not.

AUDIENCE 2

You’re established in all the ways that Audience 1 is not, although perhaps you’re feeling too established with higher fixed overhead (offices, staff, a Tesla and a new summer place).

You may be wondering if your recent level of success is all over. It is not.

CMB MAGAZINE CMBA-ACHC.CA SUMMER 2022 I 41

tough market

1Who am I to write about starting in

a tough market? Fourteen years ago, I was as broke a broker as you could find. And the week I officially started was the same week the government took away zero deposit down and tightened the available amortization from 40 to 35 years. I was told it was all over. It was not.

What can be applied from that moment in 2008 to today? Grit.

Drive. Tenacity. Optimism. Market knowledge. Product knowledge. The world is opening back up, and, at the same time, there is a wide variety of online opportunities to interact with our lender partners, with other brokers, and to learn about products and markets. Attend every event and happening you can. Be everywhere.

Invest in yourself.

I spent thousands of dollars in my first year as a mortgage broker on memberships to real estate groups and attending financial and real estate conferences. Whatever I could do to learn more about the markets and meet more people, I did. Learn first, then meet people.

Do you truly understand the mechanics behind fixed rate movement, and the totally different set of mechanics that drive variable rate movement? Not just prime, but the discounts offered? Can you articulate how and why certain rates move as they do? If not, learn how. Then get out there and impress people with your knowledge.

This was the source of nearly all my early business, me being the source of an explanation as to what was actually happening in the market and why. The reality is that massive opportunities remain even in a softening market.

There are more than one million privately owned properties in British Columbia and 60 per cent have mortgages.

That’s 125,000 renewals every year, if everyone went for a full five-year term – which they do not. It’s more like 200,000 opportunities each year, excluding sales. How many of those 200,000 non-purchase related transactions that will happen in 2022, despite interest rates rising, do you need to have for yourself to call it a successful year – 25, 50, 100, 200? Pick a number, work it backwards and build a plan of attack. Create a simple one-page business plan.

That’s what I did, and it can lead you past 100 closed files for 2023 as well.

AUDIENCE

2You’ve been around for a while, let’s say more than five years, maybe that sweet 10-year spot. You’ve just had an incredible few years, your database is solid, and your referral network is whittled down to people you more less truly like working with. Life is good. And a slow down for summer is welcome – you’d like some breathing room. Time to take a trip to the lake or just relax. Sure you would.

And a month, a week, a day or few hours into the slow down, or the break, you start worrying. Is it all over? Is this it? Do I need to redo my resume? No. No. And no. If you want the machine to keep ticking along at the same pace, because you’ve staffed up and invested in your setup, it can. You can make it happen.

You already know what I am going to say. There is gold in your database. And it’s being mined every day. All the lenders are actively calling your clients, as if you don’t exist. Which is the lenders’ right to do. Because you sold your clients to the lender, you did not rent them. And now you need to earn them back.

The lenders are calling your clients one by one to get the variable rate clients to lock into a fixed rate. Pushing that renewal date out by years. Taking away flexibility when it comes to accessing equity, something the clients don’t realize in the moment.

The lenders are calling your clients to get the renewals locked in nice and early. Why aren’t you beating the lender to the punch?

Ninja-level strategy: Client’s renewal date is May 15, they’d like some new money, or not, which may or may not open the door to do an early refinance with the existing lender (yes that’s a thing, and yes most lenders still pay you on the overall new balance) so are you working the client’s file on January 15? Of course not, you are smarter than that. You are working that client’s refinance at renewal with the same lender, on September 16. You can hold the rate for 120 days, and close on day 1 of the 120-day early renewal zone.

Some of you are already doing this and are closing clients with February/March rates in July who had December/January renewal dates. You are the experts. And your clients are thanking you. Because what do we humans crave most of all? Certainty! That is what you can deliver to your database. You understand how the systems work and have the ability to help your clients win in a rising rate environment like nobody else.

Take this strategy, among others, and dive into your database. You know, that group of past clients with whom you stay in constant contact through written and video blogs emailed directly. That group with whom you are positioned as the trusted advisor.

Go forth and broker!

AUDIENCE

Dustan Woodhouse is president at Mortgage Architects. More information: dustanwoodhouse.ca

42 I SUMMER 2022 CMBA-ACHC.CA CMB MAGAZINE