Back when I was a true sale dog. I loved being incentivized. Collecting carrots is much better than getting whacked with a stick after all. And carrots, their money equivalent or a trip to Turks and Caicos is a pretty sweet deal, in the world of persuasion, very persuasive. But now I feel differently. As a Realtor, I don’t think of myself as a sales dog. I think of myself as an advisor. I am not enticed when the RBC offers me $1000 for five first-time homebuyer mortgages or when an overpriced listing or condo developer offers me a 3% or even 4% commission for my collusion.
Rolling the bones
Do you have any friends that gamble? I don’t mean a 649 ticket when the pot is over ten million. I mean friends that go to Niagara or Vegas and Atlantic City. Atlantic City, New Jersey is for serious gamblers. Even if your friends play the slots or the ponies, the following is true: You never hear about how much they lost. You only hear when they win.
What does that have to do with mortgages? Mortgage rates are low again. Low, low, low, lower than a discount broker’s commission. And, they will eventually rise and someone somewhere may lose their house, a house that is heavily mortgaged and decked out like it’s Christmastime in Versailles. And then all the doom and gloom sayers will say, “ah ha, I told you so”.
There is a distant thunder rumbling, doom impending. Repent sinners, over borrowers, money lenders. Fortune tellers raving from the street corners, psychics and prophets warning all those that will listen.
I met a little gypsy, in a fortune telling place. She read my mind, and then she slapped my face.
— David Wilcox
Banks in Canada know what they are doing. They can afford a little risk. Mortgages like they are giving away are risky but more bankers have a background in finance than newspaper reporters, or real estate bloggers. I’m not saying you should trust banks, oh no, but it’s their money not yours.
Live large. Live little
Every once in a while when I’m reading my real estate news feeds, a story about tiny houses pops up. Live large is passé. Live little is big now. But I think one of the reasons people are liking to live in little spaces is because they can’t afford big spaces. Making the rounds in the mainstream media this week is the RBC’s House Affordability Index. Prices are rising and “In Ontario as a whole, the affordability measure of 44.9% for bungalows and 51.0 for two-storey homes represented a 24-year high.” The affordability measure is most relaxant to first-time homebuyers.
And that’s my report.