How we are helping realtor partner's clients create more listings and deals by creatively solving problems.

Joel Olson • March 23, 2022

In busy markets, the average consumer will assume that it's like a gravy train for us, but you and I know that couldn't be further from the truth...

In busy markets, the average consumer will assume that it's like a gravy train for us.

Money's constantly coming in, followed by days of long lunches and endless leisure activities as we make the easiest money we've ever made in our lives.

In reality, both you and I know that a busy market is not easy.

In fact, it's very hard work.

The challenges that we face today are much different than a different market climate and the challenges that we face today, some of them can become even more challenging and more frustrating than what we've encountered before.

I know it, and we hear it from realtors we talk to daily that the crucial lack of inventory makes a huge impact on their business.

Many of our buyers who are pre-approved for months on end, finally leave the market finding nothing to suit their needs after countless multiple offers.

After countless situations where they're outbid feeling frustrated and some never return to the market to purchase a home

Lately, I've been noticing from the clients we talk to that they are keenly unaware of some strategic ways that they can take advantage of the seller's market.

In fact, there's clients that we have right now that have things that you could be listing, that they don't even realize.

Below, I've articulated a few different ideas that I've found lately with clients that you may not have thought about and should give you a great opportunity to reach out to some of those clients, to see if you can find a few more listings to fill up the inventory that we're all lacking.

Number one:

Any buyer with an acreage, or maybe a lot that could be subdivided are potentially people that have not thought about selling off part of their lot.

Many people are daunted by what they assume is cost prohibitive for them to subdivide.

What if I told you that we offer mortgages that don't require income or credit, but short term loans specifically to allow somebody to subdivide their lot and to take the cost of which to pay out when they sell off the lot .

You could be approaching your clients that have bigger lots that could be subdivided with the idea that you could sell off their lot for them, and also arrange the cost of the subdivision in order for them to profit off the lot.

This is truly something that most people haven't even thought of.

Especially if you have buyers that maybe are feeling like they don't need that much more area to their property.

Number two

A very interesting thing that I saw last year was a lot of clients who typically have seen opportunities such as buying suited homes.

Of course, it makes sense. We all talk about the holy grail of buying a property with a mortgage helper that enables the cost on a monthly basis to go down and how much that increases your qualifying and makes it more appealing to the average buyer.

However, a new, a strategy evolved last year that we thought many of our clients taking advantage of.

That strategy was to split their house into two, essentially making it a duplex, selling off that one side.

And for most of our clients... becoming absolutely mortgage free, especially with the house price increase in the market.

We saw people paying for the cost to simply stratify their house into a duplex, being able to go from having a mortgage, to being mortgage free completely.

For many of these clients, they were not near retirement and were easily in their early thirties and now have a completely different financial picture.

If you have clients that have a house that could be split into a duplex and they are talking to you about not needing all that space, we offer loans that will give them the cost of both renovating and the legal cost to subdivide their property into two, without them them needing any income or credit.

Again, a short term loan where they are able to do that and end up in a much better financial picture.

And of course you have one more listing that you can sell in this busy market and actually a listing that probably is something that's easier to move and is something that is in the price range of many of the people that are being priced out of the market.

Number three

The folks that want to downsize, but don't know how.

It dawned on me a few weeks ago when we had a client call talking about his fear that he would sell his house and not find another house and essentially be homeless because he knew his house would sell fast, but he also knew it'd be very difficult to find a house and he could not put himself in that position.

But with his health failing and with his situation turning where his house was certainly not what he needed to be in.

And the idea where he'd have to go into something a lot smaller making complete sense, he was at a crossroads.

How would he do that?

He was a senior with a lower income.

Most of his wealth was tied up in his house as is often the case.

How would he be able to arrange that time period?

Did you know that we offer bridge loans for clients that have a home that they need to sell and are buying another home that they want to buy?

These loans have no payments and we pay them off when the home is sold.

So if you have clients that are downsizing, we can offer them the money to go into that home and wait to make all the timing work, so they have not one night of being homeless.

Certainly these are just a few of the ways that we are seeing realtors come up with listings where it seems like there isn't any.

I would always welcome the opportunity to sit down for a coffee with you and see if there's any way we can help make your business better.

As always, I'm available to help any of your clients at any point

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Joel Olson

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Why Downpayment Source Matters

By Joel Olson • February 11, 2025

If you’re looking to purchase a property, although you might not think it matters too much, the source of your downpayment means a great deal to the lender. Let’s discuss the lender requirements, what your downpayment tells the lender about your financial situation, a how downpayment helps establish the mortgage loan to value. Anti-money laundering Lenders care about your downpayment source because, legally, they have to. To prevent money laundering, lenders have to document the source of the downpayment on every home purchase. Acceptable forms of downpayment are money from your resources, borrowed funds through an insured program called the FlexDown, or money you receive as a gift from an immediate family member. To prove the funds are from your resources and not laundered money from the proceeds of crime, you’ll be required to provide bank statements showing the money has been in your account for at least 90 days or that you’ve accumulated the funds through payroll deposits or other acceptable means. Now, if you’re borrowing all or part of your downpayment, you’ll need to include the costs of carrying the payments on the borrowed downpayment in your debt service ratios. If you’re the recipient of a gift from a direct family member, you’ll need to provide a signed gift letter indicating that the funds are a true gift and have no schedule for repayment. From there, you’ll need to show the money deposit into your account. Financial suitability Lenders care about the source of the downpayment because it is an indicator that you are financially able to purchase the property. Showing the lender that your downpayment is coming from your resources is the best. This demonstrates that you have positive cash flow and that you’re able to save money and manage your finances in a way that indicates you’ll most likely make your mortgage payments on time. If your downpayment is borrowed or from a gift, there’s a chance that they’ll want to scrutinize the rest of your application more closely. The bigger your downpayment, the better, well, as far as the lender is concerned. The way they see it, there is a direct correlation between how much money you have as equity to the likelihood you will or won’t default on their mortgage. Essentially, the more equity you have, the less likely you will walk away from the mortgage, which lessens their risk. Downpayment establishes the loan to value (LTV) Thirdly, your downpayment establishes the loan to value ratio. The loan to value ratio or LTV is the percentage of the property’s value compared to the mortgage amount. In Canada, a lender cannot lend more than 95% of a property’s value. So, if you’re buying a home for $400k, the lender can lend $380k, and you’re responsible for coming up with 5%, $ 20k in this situation. But you might be asking yourself, how does the source of the downpayment impact LTV? Great question, and to answer this, we have to look at how to establish property value. Simply put, something is worth what someone is willing to pay for it and what someone is willing to sell it for. Of course, within reason, having no external factors coming into play. When dealing with real estate, an appraisal of the property will include comparisons of what other people have agreed to pay for similar properties in the past. You’ll often hear of situations where buyers and sellers try to inflate the sale price to help finalize the transaction artificially. Any scenario where the buyer isn’t coming up with all of the money for the downpayment, independent of the seller, impacts the LTV. All details of a real estate transaction purchase and sale have to be disclosed to the lender. If there’s any money transferring behind the scenes, this impacts the LTV, and the lender won’t proceed with financing. Non-disclosure to the lender is mortgage fraud. So there you have it; hopefully, this provides context to why lenders ask for documents to prove the source of your downpayment. If you’d like to talk about mortgage financing, please connect anytime; it would be a pleasure to work with you.

Understanding a Spousal Buyout Mortgage

By Joel Olson • January 28, 2025

If you’re going through or considering a divorce or separation, you might not be aware that there are mortgage products designed to allow you to refinance your property and buy out your ex-spouse. If you’re like most people, your property is your most significant asset and is where most of your equity is tied up. If this is the case, it’s possible to structure a new mortgage that allows you to purchase the property from your ex-spouse for up to 95% of the property’s value. Alternatively, if your ex-spouse wants to keep the property, they can buy you out using the same program. It’s called the spousal buyout program. Here are some of the common questions people have about the program. Is a finalized separation agreement required? Yes. To qualify, you’ll need to provide the lender with a copy of the signed separation agreement, which clearly outlines asset allocation. Can the net proceeds be used for home renovations or pay off loans? No. The net proceeds can only buy out the other owner’s share of equity and/or pay off joint debt as explicitly agreed upon in the finalized separation agreement. What is the maximum amount that you can access through the program? The maximum equity you can withdraw is the amount agreed upon in the separation agreement to buy out the other owner’s share of the property and/or retire joint debts (if any), not exceeding 95% loan to value. What is the maximum permitted loan to value? The maximum loan to value is the lesser of 95% or the remaining mortgage + the equity required to buy out other owner and/or pay off joint debt (which, in some cases, can total < 95% LTV. The property must be the primary owner-occupied residence. Do all parties have to be on title? Yes. All parties to the transaction have to be current registered owners on title. Your solicitor will be required to confirm this with a title search. Do the parties have to be a married or common-law couple? No. Not only will the spousal buyout program support married and common-law couples who are divorcing or separating, but it’s also designed for friends or siblings who need an exit from a mortgage. The lender can consider this on an exception basis with insurer approval. In this case, as there won’t be a separation agreement, a standard clause will need to be included in the purchase contract to outline the buyout. Is a full appraisal required? Yes. When considering this type of mortgage, a physical appraisal of the property is required as part of the necessary documents to finalize the transaction. While this is a good start to answering some of the questions you might have about getting a mortgage to help you through a marital breakdown, it’s certainly not comprehensive. When you work with an independent mortgage professional, not only do you get a choice between lenders and considerably more mortgage options, but you get the unbiased mortgage advice to ensure you understand all your options and get the right mortgage for you. Please connect anytime; it would be a pleasure to discuss your needs directly and provide you with options to help you secure the best mortgage financing available. Also, please be assured that all communication will be held in the strictest of confidence.