Back when the photo above was taken, in 1979, I was just starting out as a realtor. Since then I’ve learned a lot about the real estate world. And while ‘the times they are a-changin’ the main laws of business—and I mean any client-oriented business, not just real estate—remain the same.

The realtor game isn’t easy. Long hours and hard work is the norm in the industry. I’ve never met a successful realtor who worked 40 hours a week. They all work 60-80 hours.

It’s a thankless job sometimes, but it can be very fulfilling as well. That’s why I’ve decided to share guidelines to help you through the difficult times.

1. When something comes up, do it right away.

It’s so easy to get distracted. Tasks that you can’t anticipate pop up all the time. When something unforeseen shows up on your schedule it’s best to get it over with so you don’t get bogged down by it.

2. Know your marketplace.

See as many houses as possible. It’s important to get out there and find out what the neighbourhood is like. You should know how many schools are in the area, where the nearest transit stop is, and when garbage day is.

Torontoism’s Neighbourhood guides

You should know everything about the neighbourhood you’re working in. From the best restaurants and best schools in the area to the best off-the-leash dog parks and farmers’ markets.

3. Work to be at the same level at all times.

It’s easy to get bogged down in the minutiae of it all. Sometimes you get tired and don’t want to work. But you need to push through that.

I see a lot of people who do really well in the first three months and then decide to relax. Instead, try and pace yourself. Don’t take on too much and never do just the bare minimum.

4. Always over-perform for your clients: go the extra mile.

Don’t wait for your clients to ask you for something. Instead, anticipate their needs. You want to create a situation where they look to you on an ongoing basis. So they may call you when they want to paint their house in five years, or when they want to sell in 10 years.

Making play-doh dumplings at a Mandarin class with Panda Mandarin Language School

5. Plan ahead 6 months, 12 months and 5 years and spoil yourself.

It’s important to give yourself something to look forward to. As I said, being a realtor is a very intense job. I think the only way you can keep up that pace is if you always have something to look forward to. 

I usually plan at least one trip to Mexico every year. Other times I head to Europe for a few weeks. But it’s all in the name of rewarding yourself for your hard work. There’s always something that I’ve booked and paid for that I’m going to enjoy months down the line.

6. Always be on the lookout for the next opportunity.

Finding new opportunities or niches can open doors and bolster your business.

I realized years ago I had to look to widening my customer base to people who speak different languages. Learning about foreign buyers and dealing with them opened entirely new markets and kept our business moving strong.

Richard and Sherille in London during The Torontoism international trip in December 2016.

7. Never take yourself too seriously.

Things will go wrong. Clients will decide to go with other realtors but that happens to everybody. Stuff happens. There will be disappointments and you just need to move on. Don’t let it get you down.

8. Focus on what you do well and outsource the rest.

Some people are good at public speaking while others are terrified by it. That’s normal. The trick is to figure out what you’re good at and concentrate on that. Wherever your shortcomings are, try and find people to fill those roles. So if you’re bad on the phone, find someone who’s good at it.

Meet Torontoism

We speak English, French, Mandarin, Hindi, Punjabi, Urdu and Portuguese!

9. Involve yourself in your community.

There are opportunities all over the web for realtors, but it’s important not to forget that there’s a community around you.

Go online and outside.

Getting involved in that community will help people remember you. So when they’re looking to buy or sell, you’ll be the first person they think of and the first person they call. If there are things you can do in the community get out there and do them.

You should also remember that the community doesn’t just mean the neighbours. Realtors are part of a community, and networking is a valuable tool.

There are a lot of realtors who don’t want to interact with other realtors. If you can send business to a peer, the odds are better that one day they’ll return the favour.

Torontoism in New York with the Nikki Field Team

10. Think long term.

Don’t just look at recent trends. A five-year plan is useful for anyone. A lot of realtors, when it comes to real estate, they think very short term. But picturing where you’ll be in five years can also help you figure out how you want to get there. Or how you can help clients get there.

11. If the market slows and the pie gets smaller, get a bigger piece. Don’t let a downturn affect you.

When there’s a downturn a lot of people become paralyzed. But there is always business to be had. It just means working a little harder during the lean times. People will always be buying and selling.

12. Anything worth doing is worth overdoing.

I once had a client who had trouble organizing his office. As a joke, I got him a paper shredder and it’s something the client still jokes about. The point is, you can always go the extra mile.

There are times you can do things in the community that people won’t even know about. In the past, it wasn’t unheard of for me to help my clients move, though you should be mindful of going overboard. But if there’s anything you can do that your clients will enjoy, don’t overthink it. Just do it.

Title Photo by Charles Pachter

Richard was recently interviewed for the OREA EDGE newsletter about the team approach in real estate, together with Melanie Piche who runs the BREL Team at Toronto’s Sage Real Estate in partnership with her husband, Brendan Powell. Here is an excerpt from the article, but you can find the  whole article here.

Richard Silver, who has worked in Toronto real estate for more than 37 years, is the Torontoism team lead and vice-president of sales at Sotheby’s International Realty Canada. He is part of a seven-member team comprising five Realtors and two support staff. He believes in the team model because “the whole is greater than the sum of its parts.”

Everyone brings different strengths. Each of us is better at something than others. Some people speak a different language. Our team contains different cohorts, Baby Boomers and Millennials, and they all provide different viewpoints.

Silver believes that in a successful team, members learn from one another and feed off one another’s ideas and energy. “We learn from the strengths of others, as well as from their guidance when problems arise,” he says. “Each of us is different and we celebrate our diversity.”

Silver employed a coach to help the team get organized, determine responsibilities and settle on the method of compensation. He believes the smooth running of the team flows from that approach.

I choose to share all my leads with the team and no longer solely represent anyone. I also wanted their compensation to be high so they would not be tempted to leave and go out on their own.

Real estate is a competitive business, but neither team has had much internal conflict. Silver’s team members are careful not to step on one another’s toes. Silver says the team can always turn to management at the brokerage if it encounters a problem that seems insurmountable.

Although Realtors are often viewed as rugged individualists, both sources say it is possible for real estate salespeople to work and thrive in teams if the right conditions are present.

People who can’t work as part of a team are the same people who might also have problems in an office environment. If it is all about you, don’t choose to be part of a team. Our team members have come to depend on each other and, for the most part, have become social friends, as well as business friends.

Keys to team success:

• Realize that you’re in it for the long haul; it’s not just about getting one deal done.
• If you’re thinking of joining a team, talk to the other team members and get a complete picture. Ask in-depth questions.
• In considering a team, see what the track record is and the longevity of members.
• Be sure that both the team and its affiliated brokerage are a good fit for you.
• Remember, it’s not all about what you can get. What do you bring that can make the team better?
• Consider hiring a coach or finding a mentor when you are starting a team so you can avoid painful mistakes.
• Put people with complementary skills together on your team. The complexity of the market today means no single individual is an expert on every type of property or aspect of the business.

Originally posted in the EDGE newsletter and OREA site, by Elaine Smith.

SK00SK

Cabbagetown – the village in the middle of the city. The “Thing” about Cabbagetown is it’s a small town in a big City. It has its own shopping area, park, schools and everyone knows their neighbour.

Restaurants are plentiful as well as ethnic diversity in food. I’ve decided to share some of my local favorites. Feel free to share your favourites in the comments, good food suggestions are always welcome!

HOUSE ON PARLIAMENT

Address: 454 Parliament St, Toronto, ON
Opening Hours: 11:30 – 02:00
houseonparliament.com

Source: Facebook

Purveyors of Fine Fare, Libation & Diversion.

House on Parliament is one of the few places where you’re encouraged to dine with your bare hands. It actually says so on the menu, which is divided into four categories, according to the type of utensils the meal demands: Fork and Spoon, No Cutlery Needed, Utensils Optional, Silverware Required, Sweet Spoon.

The meal selection at HoP is what you would expect to find in a normal pub. What is more, Now magazine said House of Parliament serves the best pub food in Toronto. And I couldn’t agree more!

Source: Facebook

I work a lot of evenings, I am here for brunch or lunch at least once a week. I consider this place the original gastro pub! And in the summer, make sure you enjoy your meal on their top floor deck! Great outdoor eating experience!

And the vibe at the House on Parliament in perfect balance with the Cabbagetown neighbourhood – it’s quirky, artsy, historical, comfortable, and friendly. We’ve covered the restaurant before on Torontoism.com, so if you’re not convinced yet, don’t leave without reading our full-scale review here.

Source Facebook

SALT & TOBACCO

Address: 521 Parliament St, Toronto, ON
Opening Hours: MON-THU, SUN 17:00-21:00, FRI-SAT 17:00-21:30
saltandtobacco.com

Source: Salt & Tobacco

If you want to do something, like propose to the love of your life, and you aren’t into waiting for a seat then call us – we can work with you on that.

Salt & Tobacco is the newest addition to the Parliament food scene. The location is central, the food is excellent. They’re already famous for their great service and a welcoming and bright ambience.

One important thing to note, this restaurant is small and has limited seating, only a couple of benches. And because of their popularity, even their website says “you’re likely to be sharing a table when you arrive. Don’t worry, everybody is nice”. And you shouldn’t worry indeed. The seating allows for a very friendly atmosphere to enjoy their speciality pizzas.

Source: Salt & Tobacco

And as far as pizza goes, it doesn’t get better than Salt & Tobacco. The crust is like a super model – thin and crisp. Wash it down with craft beer or sparkling water on tap. It’s your choice, but do choose this place as it deserves your attention!

Source: Salt & Tobacco

THE IRV GASTRO PUB

Address: 195 Carlton St, Toronto, ON
Opening Hours: MON-FRI 11:00-01:00, SAT-SUN 10:00-01:00
theirvpub.ca

Source Facebook

All of our meat is locally raised without the use of any hormones and antibiotics. NEVER FROZEN.

Local is not only a word at Irv’s, but a commitment: “It is very important for us to give back, its not only a part of our business model but it is a part of who we are.” And you know a restaurant is serious about its ingredients when it uses caps lock to emphasize it.

I think the best description of this neighbourhood eatery would be “a great spot for relaxed eating of comfort food.”

Source Facebook

The Irv Gastro Pub is a Cabbagetown favourite for its coziness, informal setting, sports broadcasting and overall friendly atmosphere. There’s no reason to believe otherwise when the place averages 4,5 on Yelp.

Their sandwiches alone do a great job promoting the chefs but don’t hesitate to come for brunch. Wash your meal down with local craft beer and craft cocktails.

Also, their patio is great. I must admit to being a patio sitter, and Irv has a really nice patio! I love the ambiance there and the street views.

F’AMELIA

Address: 12 Amelia St, Toronto, ON
Opening Hours: MON-FRI 17:00-22:00, SAT-SUN 11:00-14:00, 17-22
famelia.com

Come and visit – your taste buds will thank you!

The great thing about big cities is their diversity and what it brings to the table. In F’Amelia’s case, it is Northern Italian cuisine and wine.

Located on the Amelia St in our lovely Cabbagetown, the name seems to hint at a playful combination that sounds like ‘Familia’ meaning family. The homelike place is praised for its service, wine and authentic food. Often times you will notice it is called a hidden gem. This is because Cabbagetown is one of those neighbourhoods that don’t feel busy, yet there’s no shortage of business.

Source: Facebook

F’Amelia accommodates their guests on the patio, or in the cozy interior.

And it’s always a good choice, for any occasion, whether you’re celebrating something, or you’re just in the mood for some delicious Italian food. They have wonderful bread, tasty Italian food and the atmosphere at the restaurant is Cabbagetown at its best.

Source: Facebook

RASHNAA RESTAURANT

Address: 307 Wellesley St E, Toronto, ON
Opening Hours: MON-SUN 11:30-22:00
rashnaa.com

Rashnaa was first opened in 1990 in the heart of Cabbagetown, Toronto.

Almost three decades later and Rashnaa is still one of my neighbourhood favourites. Rashnaa means Tasty in Sanskrit, a language associated with India.

What is it you can find here? Spicy Indian and Sri Lankan meals. More than on the fancy interior, the place is focused on good quality dishes. Don’t worry, though, the ambience is very authentic even without overwhelming decorations. Less is more when it comes to this place!

Source: Facebook

Rashnaa offers Great Sri Lankan delicacies, but it’s not for the light eater. Make sure you have lots of water near you! Kothu Roti is one of the most popular dishes. If you have never had Sri Lankan food before I encourage you to try it here. They’re also a great choice for take-out or UberEats.

Source Just Eat

ML00ML

Our city is a work in progress. Even before the new Crosstown LRT project peppered Eglinton Avenue with work sites, Toronto often felt like a lively, lived-in construction zone. But as chaotic as it can sometimes be, there is at least a little method to the madness. There is a Plan, and behind it, a whole department of city planners.

Jennifer Keesmaat came to the job of Chief Planner in 2012, after nearly a decade of private-sector urban planning that saw her help design – or in some cases, redesign –city spaces across the country.

Somewhere in between meetings, she found the time to answer a few questions about how Toronto is changing, and why.

Just to clarify things, what does the Planning Department actually have control over?

We have control over every part of the landscape of this city. It’s embedded in the Official Plan, and we write and maintain and recommend the Official Plan to City council. So for example, in the Official Plan, we have policies about affordable housing. We have policies about parks and open spaces. We have policies about the character and design of transit, as well as the design of streets and roads. And then we also have policies related to the built form and the uses of the city.

What’s your vision for Toronto?

The vision is contained in the Official Plan, and that’s a vision that I, you know, deeply believe in – passionately believe in. Essentially the vision is to create a city for all, that has vibrant and dynamic places for people to live, but also places for people to work and play. So there are policies related to culture, to employment, to housing, to parks and recreation.

Can you give me some examples of things you’re doing to achieve this vision?  

I just came from a meeting right now on the Lawrence-Allen neighbourhood, where we have a typical suburban social housing development – it’s a pretty large site, over a hundred acres –and we are deep into phase one, where we are adding main streets, density, market housing, new housing, and redesigning the streets for pedestrians.

So where the streets today are primarily for cars, we’re adding cycling lanes and sidewalks. We’re narrowing the streets to make them more urban. So that’s an example where the vision becomes very specific on one specific site, and I can give you hundred of those sites.

[fvplayer src=”https://www.youtube.com/watch?v=vp549gsdjnk” splash=”https://torontoism.com//images/2017/04/Screen-Shot-2017-04-12-at-11.12.55.png” caption=”Walk to School: Jennifer Keesmaat at TEDxRegina”]

You’re talking about redesigning streets meant for cars, but the city right now seems full of cars – what do you see as the correct role for cars in Toronto?

It’s important to note that we keep adding people, but we don’t keep adding cars. We’ve been adding to the region 100,000 people on an annual basis, but we haven’t been adding any more cars for over thirty years to our road network. It’s been at capacity for thirty years.

The role of cars is going to change over time, as we’re already going through a shift because of things like Uber and Lyft, and we’ll go through another shift with autonomous vehicles. And the best role for the car in the city is to play – not a primary function, but a supportive function. Meaning that when there are instances where it’s not possible to get where you’re going on transit, or when you have the last mile challenge – the last mile of a trip, needing to get from transit – those are the opportunities where a car can play an important role.

How do you get people to shift to using cars in this limited way?

The first thing you need is, you need to have options. So one of the challenges in our suburbs in many areas is there aren’t a lot of options. The only way to get from point A to point B is in a car. So this is why we’ve created a really comprehensive transit network plan because we need to fill the gaps in our transit network so that people have the choice. But it’s also the reason why we’re focusing on the intensification of our avenues. Because you need to add destinations within walking distance.

And of course, we’re building our ten-year cycling plan because we know that over 75 per cent of the trips in the city of Toronto is within five kilometres from home, and five kilometres is obviously an easily bikeable distance. So adding cycling lanes is also about providing more choices.

Survival of our cities – and our planet – requires a massive culture shift. pic.twitter.com/2TFTZDqdNq

— jennifer keesmaat (@jen_keesmaat) March 12, 2017

‘Walkability’ is a big deal in Toronto planning these days. What other factors enhance walkability, aside from sidewalks?

There’s sidewalks, but also the design of buildings. If you think about walking on a sidewalk, beside a Walmart, for example, you have a big blank wall. You know, the wind is going to hit that building and be driven down and is going to make it a very uncomfortable place for you.

So, the design of buildings is one of the factors. Bringing buildings up and creating a street edge is a really important part of walkable communities. And making sure that the destinations are in close proximity to one another; a really important part of creating a walkable city is actually how land uses are planned and designed.

You’ve worked on urban planning projects all over Canada. What makes Toronto distinctive from a planning point of view?

Well, the first thing that makes it distinctive is our astronomical growth. We’re just adding so many people on an annual basis. But the other piece that makes it distinctive is that Toronto is truly a city of neighbourhoods, and people already live in neighbourhoods and do undertake many activities associated with everyday life in their neighbourhood.

Another thing that makes Toronto really distinctive is that we are a city of extremes because we’re both regional and we’re urban, as a result of amalgamation. So if you compare downtown Toronto to the city of Vancouver – which is actually a good comparison because Vancouver is not amalgamated as part of the region – we have some pretty phenomenal stats around our success in the downtown core. 75 per cent of the population living in the downtown – which is a population of 250,000 people and it’s going to double over the next twenty years – either walks, cycles, or takes transit to work. That’s on an international scale a real success.

Integration of old + new in this 9 storey office building causes a double take. Distinctly Toronto. Beautiful. pic.twitter.com/I2gDQYZoXB

— jennifer keesmaat (@jen_keesmaat) March 19, 2017

What about the divide between urban and suburban that we’ve seen in the last few municipal elections?

I’m not sure how much of that is a construct of the media and how much is real. I think people across the city want the same thing; they want to live in safe communities. We already know – there’s great research that’s been undertaken – that people want destinations within walking distance of home. They want to live in walkable communities. People want great transit across the entire city. People want excellent public spaces across the entire city. People want affordable housing across the city.

The term ‘liveability’ gets used a lot when it comes to Toronto. What does it mean to you’?

If you don’t have employment, it’s not very liveable. If you don’t have stable housing, it’s not very liveable. You need access to green space – in a city, even more so than if you were living in other places. So access to green space, to parks, to ravines, to nature, is a critical part of liveability.

I would argue that, for reasons that are almost incomprehensible, an entire generation has bought into the idea that a long commute is acceptable. And I would argue that it’s not. It’s not liveable. The average person in Toronto – the Average – commutes 45 minutes each way. That’s an hour and a half every day. The idea that we’ve normalized this as being a normal part of everyday life as opposed to being a last resort I think demonstrates how far we’ve come from really believing in the idea of liveability.

Liveability inherently means having the opportunity to choose to live close to where you work and where you undertake the activities of everyday life, as opposed to being trapped in a car, or trapped by a long commute, because that long commute can also happen on transit.”

Same street, different designs. Multimodal st moves 30,100 people/h vs the car-only st which moves 12,300 people/h. pic.twitter.com/ypfsP083VD

— jennifer keesmaat (@jen_keesmaat) November 16, 2016

You’ve said that access to nature is a key component of liveability. Obviously, this means not paving over parks and ravines, but what other, less obvious things can you do, as a city planner, to design a more nature-friendly city?

Our Ravine Strategy is a key component of this. We need to protect the ecological functions of the ravine system and invest in making it function better – enhancing water flows, adding better infrastructure (like stairs, bridges and boardwalks) to get into the ravines and to walk through them, without disturbing their important ecological functions.

Our Green Infrastructure Unit is also working on taking back ‘unused parts of the roadway to reclaim this space for the public and for storm water management. See Raindrop Plaza Park, the new public gathering space at the north-west corner of Dundas and Coxwell for example. The permeable paving and rain gardens at this park will be directing storm water runoff from Coxwell Avenue to soil stored below plaza, which will water the newly planted trees and also eliminate basement flooding in the surrounding areas.

Can you give me a few examples of city planning for our growing senior population?

The most important thing we can do for our senior’s population is to plan walkable, complete communities with amenities that are close to home, that foster a strong sense of neighbourhood. Our infill projects on our Avenues are about providing more housing choice, and ensuring that we have all of the uses in every neighbourhood to make them complete.

What can we learn from other cities?

New York City is doing an amazing job right now at building affordable housing; they’re building 20,000 units of affordable housing on an annual basis. And they have done an amazing job of creating – back in the 70’s, actually – excellent rental housing that has been protected, and as a result, the vast majority of the population lives in rental housing.

I think as Toronto matures, we’re going to need a significant increase in the rental stock of housing in the city, as an affordable housing choice. It’s difficult to look at a lot of Asian cities, because they’re just growing at such an astronomical rate, but of course, when you look at transit, they do transit in a very aggressive way, and there’s probably some lessons we can learn from that, because we’re very slow at developing our transit infrastructure.

In terms of becoming more people oriented in our design, Copenhagen is a very good example of a city that has focused on – over the course of the past thirty years – transitioning from really being a city that primarily moved people in cars, to being a city that now primarily moves people on bikes. So there are different things that we can learn from different cities around the world.

JN00ML

Condos have become a part of Toronto life. They’re as omnipresent as the CN Tower or signal problems on the TTC. Between 2012 and the end of 2016, 683 projects were completed, boasting 91,855 units.

For many people, buying a condo is the only way to break into the housing market. Most folks will become acquainted with the real estate process through purchasing their first condominium: the hunt, the offer, the contracts, and all the other minutiae that go into buying a home.

But there’s one aspect of the process that may be less familiar to many people: Assignment purchases.

Essentially, an assignment purchase is when someone pays for a pre-construction condo unit and then sells the deed to the property before it’s registered.

A Complicated Matter

“They’re a little more complicated,” explains Jim Burtnick, a member of the Torontoism team for Sotheby’s International Realty. “What you’re doing is selling someone your agreement of purchase and sale. The idea is to sell it for more than your purchase price.”

The person selling the agreement is referred to as the assignor and the person buying is known as the assignee.

Burtnick says he’s done a few assignment sales in his career, but because of their complicated nature, they aren’t very common. He guesses the number is somewhere around 5 to 10 per cent of total condo sales in the city.

There’s basically three people involved. So you’ve got the assignor, who’s the person selling it. You’ve got the assignee, the person who’s buying it. And you’ve got the developer agreeing to allow the assignment to take place.

He says that, from the developer’s point of view, it doesn’t make sense to let the original purchaser sell their contract. If the assignee backs out of the deal then the builder is on the hook.

They don’t want to have to go and chase somebody new to close on it. So it’s keeping everybody in limbo. The assignor selling the unit is not going to get paid until the assignee actually closes on it, and it’s a bit of a domino effect.

Speculation

Still, the fact that it’s complicated won’t stop people from trying to make money off assignment sales. Burtnick says there is a tendency to speculate in the new-construction market. That’s when people buy pre-construction and sell it before the move-in date in the hopes of making a profit. Because the market in Toronto has been on an upward curve for a number of years, people are trying to take advantage of that.

For example, you don’t pay the full $500,000 price of a property upfront, you pay $100,000. If you can turn around and make an assignment sale you could potentially make another $100,000, doubling your investment.

The Benefits

There’s the tendency to think speculation would raise condo prices, but Burtnick doesn’t see it that way. “It’s a reality of the market. I wouldn’t say it’s a problem because in many respects what it’s doing is fast forwarding the project to get completed,” he says.

He explains that builders need to sell 75 per cent of their inventory before they can get financing from a bank. Speculating speeds up the process by guaranteeing those buildings are sold.

If these people weren’t in the market as speculators. It could take years to sell a project and consequently delay that supply getting to the market. And right now, our biggest problem in this city and the GTA in general is a lack of supply.

Beyond an expedited build, assignment purchases offer other benefits. For the buyer – or assignee – they don’t have to wait four or five years to move in, according to Burtnick.

Usually, when an assignment happens it’s very close to the registration. The building’s built.

Why Do They Happen?

Speculation isn’t the only reason for assignment purchases though. Priorities change over time. Three or four years is a long time to wait between putting down an initial deposit and actually taking possession of the unit.

Burtnick points out that it’s not uncommon to be living a different life in a four-year time span. A single person who buys a condo, years down the road, could be married with a child.

And guess what? The condos not going to work for them anymore. Their lifestyle’s changed. But the person who’s going to get it is going to be moving in relatively quickly and it’s a brand new unit.

Ultimately, assignment purchases can benefit everyone involved. For the seller, it’s an opportunity to make some money on investment or unload a property that no longer makes sense. For the buyer, they don’t have to wait to move in but get the bonus of buying a new property.

Burtnick compares it to buying a new car.

There’s a peace of mind getting something brand new. It’s like a car warranty. As opposed to getting a used car where you take your chances with it.

TT00ML

Members of various demographic groups shop for mortgages in different ways. Do the contrasts in the way the baby boomers and the millennials shop for mortgages tell us something about modern home buying? You bet.

A pair of mortgage professionals recently took the time to chat about the way Canadians of different generations think debt and mortgages. The younger of the pair, Harry McCallum is a mortgage agent with SafeBridge Financial Corporation. As a twenty-something, he self-identifies as a millennial. He’s noticed generalities about how it is his peer group shops for a mortgage.

They do definitely shop a bit differently. You’ll see a lot of online research. A lot of the people will say, ‘I was researching on ratehub.com. I was looking online and found this rate posted. Can you match that?’

Millennials

Their first step for any purchase is to go online and do some research before they talk to anyone. McCallum calls them smart shoppers:

Millennials are definitely online and shopping around. They seem to be visiting more than one person. Many of the people I talk to say they come as a result of a referral from a realtor. Or they’ll shoot me an email and say they’ve already spoken with another broker and their bank. And then they’ll come back and ask what I can do for them.

Today millennials number over 9 million in Canada, or 27% of the population, and 80 million in the United States.

This makes them the single largest demographic on the North American continent. The leading edge of this demographic are now in their middle thirties. They’re just now coming into the home-buying years. Compared to Gen X and baby boomers millennials have had a tough time financially. They graduated with more debt than any other generation. Many entered the job market as the Great Recession of 2008 settled in. That means they are careful about who they give their business too.

One trait of millennials according to marketing experts is that they look for institutions they can trust. They don’t fall for marketing gimmicks. They poll peers and reference crowd-sourced rating sites in a search for organizations that have built up a good reputation among clients. The glitzy advertising bounces off their net-informed psyches. They want to see real value in their service provider. To that end, McCallum talks up the benefits a mortgage broker can provide.

As mortgage brokers, we definitely need to find a way to add some value. Mortgage rates are what they are. You need to distinguish yourself through a ‘value add’.

To do that he takes the time to walk a client through the mortgage buying process, and then stays in contact after the sale is complete, which is not always the case with a mortgage rep at one of the Big Five Canadian banks.

At the end of the day, I want to educate and advise. I’m not just selling them a product. I’m educating the client and helping them through the process. I’m explaining the pros and cons…and I keep contact with them after. Generally I’d like to be in contact five or six times over the course of the mortgage.

Having dealt with many millennials during his time in the business he has also noted the mistakes those in his peer group make. Online savvy aside, some in the younger generation overweight the magic of online searches. They end up focusing only on posted rates. They end up overlooking key pieces of the larger puzzle.

Sometimes they’ll miss one important detail. They often don’t realize that only the very best credits get the lowest rate posted by a bank. Only 1 per cent of people can get that lowest rate. Most millennials will be first-time home buyers and they won’t get that rate. They have to be educated about that.

There is a learning curve when it comes to shopping for a mortgage. That is, it’s about more than just a rate. As McCallum puts it, “the lowest rate might not be the best for you.” It helps to understand that a bank or among online lender structure penalties in different ways if a mortgage is broken.

If you’re in a fixed mortgage and you have to break it you might have to give three months interest or make a payment that makes up for the interest rate differential. If rates have gone down, you’ll pay the differential. And when the banks calculate that differential they use the posted rate, not the discounted rate that you’ve been paying. That makes the penalty go up substantially.

It’s a detail only a mortgage shopper that has sat down with a professional will understand.

A monoline like M-CAP will use the contract rate to calculate the cancellation fee. That can save you $10,000 if you have to break the mortgage. That’s one of the things that the banks won’t do. These are the tricks that a mortgage broker knows.

The Boomers

How do the millennials compare to the way baby boomers shop for a mortgage? David Smith, a director of Oriana Financial Group of Canada Ltd., identifies with his peer group, the baby boomers, those born in the late 1940s and ’50s. This generation has dominated the post-war economy in Canada (even if they are now outnumbered by millennials). They have a slightly different approach to mortgage shopping.

It’s true millennial do a lot more research. They’re used to using the internet for everything. I would say they are smart shoppers that way. They aren’t going into it blind. But baby boomers are not like that. Boomers will go to the net for information. But they tend to still want to sit down and talk to someone about their situation.

Smith says this different approach to mortgage shopping goes back to their formative experiences that formed their attitudes toward debt. The lessons passed along from their parents have stuck with them.

Boomers grew up with Great Depression-era parents. For that generation – that Bob Hope era – owing money was a social stigma. They grew up in plenty but under a heritage of thrift. Among boomers, the number of gifted down payments was almost nil. They had to save that money themselves. We couldn’t ask those tight wads for help in that era, they were so worried about their money.

Of course, attitudes have changed since those days, Smith notes that now we have the millennials, who get to borrow money cheaply and are typically gifted down payment. He also notes that 48% of first home buyers get some sort of family assistance.

Millennials moving into real estate have had it kind of easier. Their jobs may be less fulfilling, but rates are lower and they’re getting help…They are coming in with a certain amount of privilege. It’s not say they are impulsive, but it’s not the attitude toward debt the last generation had. This generation is not scared of debt like the boomers were.

Smith worries like McCallum does that millennials rely too much on their online searches, and so overlook the benefits of real advice.

There are questions about mortgages that, if you’re banging around out there on the net all by yourself, you are not going to be aware of. Can your mortgage broker help if you lose your job? There are remedies for that. You don’t know what questions to ask beyond price. And that’s a very important point. You’re making the biggest financial decision of your life and so to disregard anyone with advice on that because you have an app on your smartphone… that can be dangerous.

We’ve been encouraged by credit cards to take on debt. And maybe this is the real difference between generations. Millennials have grown up in an era of low-interest rates. They’ve grown up in a world of long-term artificial low rates. And so they take on huge amounts of debt and are okay with paying on that. But boomers came of age in an era of high-interest rates and so they tend to save and invest. The changes in attitudes toward debt may have consequences for the younger generation according to Smith.

Sitting down with an expert who can take someone through the various mortgage products (especially in an era when it seems the interest rate may be set to rise) is an important part of the process.

Smith is of the opinion boomers were more cautious and more respectful of those more knowledgeable.

There is real difference between generations. It’s a consequence of the information age I suppose. The millennials haven’t learned the difference between knowledge and understanding. They haven’t learned that while they can get information about price online, they won’t find value. There is a difference between price and value, and between information and wisdom.

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