The importance of always learning

by Donald Horne on 06 Oct 2015
Real estate professionals need to be knowledgeable about financing if they ever hope to successfully close deals.

“You need to be learning every day,” says Andrew Libby, owner of Modern Realty NB Inc, in Moncton, NB, “you need to be constantly upgrading your knowledge to keep current; because if not, your clients are. They’re reading the material; they’re getting the notifications from your peers in the industry.”

A prime example is the changes in regulations that have been introduced into the mortgage industry over the past few years.

Since 2008, Ottawa made a number of mortgage rule changes with the intention of creating more prudent underwriting practices. These changes have included reducing the maximum amortization period to 25 years, requiring a down payment of at least five per cent, and dropping the maximum LTV for a refinance from 95 per cent to 80 per cent.

Following those, OSFI implemented its B-20 guidelines, which included changing the limit homeowners could borrow against their properties from 80 per cent of the home’s value to 65 per cent for HELOCs.

That has demanded a more intimate knowledge of a client’s financial situation, and what approval hoops are needed to jump through to purchase a home.

For Libby, a lot of his learning comes from Internet – but he is always on the lookout for emails from those in the industry with new insights, because “you don’t want to be the professional receiving the phone call from a client, not knowing your information.”

“You definitely need to be knowledgeable about the financing side of things,” says Libby. “If they aren’t able to answer the questions buyers have, real estate professionals are going to waste a lot of time and money working with buyers that they haven’t pre-qualified, or be able to ask the right questions.”

There are fact-finding questions that a real estate professional can ask, which can be as simple as how’s your credit, or did you have any problems when you got your car loan?

“Things like that will raise red flags for the real estate professional if they feel they may not have a qualified buyer, or there may be an issue with approval,” says Libby, “so that they can refer the client to a bank or a broker, letting that professional handle the preapproval, then send them back to continue.”

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