Desmond Brown

Experienced Agents Rise to The Top in This Changing Market

08 August 2017
Desmond Brown

I recently received a call from an agent on one of my listings. On the listing I stated that the seller would consider holding a mortgage for the new buyer. The agent said to me, "You mentioned on the listing that your seller will hold a mortgage. Can you tell me what that means?"

 I immediately knew that the agent I was speaking to was fairly new. I explained to her that instead of her buyer using a financial institution to get financing for this property, my seller would act as the bank and hold the mortgage. The agent was very surprised that this could be done. I explained further that her buyer would still have to qualify for the Vendor/Seller take back mortgage (aka VTB) in the same manner a bank would approve him or her and that we would want at least 20% down. I also told her that the interest rate would be comparable to what is being offered by major financial institutions and the term would be for one year.

As you're well aware, the Toronto housing market has drastically shifted. There is no single factor responsible for this change.  It may be attributable to the slew of new rules from the provincial government intended to limit and regulate foreign buyers, investors and landlords. I say we also have to consider that we're back to a traditional summer market when sales usually slow down anyway.

With this change in the market, we're seeing houses sit for longer periods of time before selling and a return to negotiations instead of bidding wars. It's also a time for sellers and their agents to be more creative in the marketing of properties to attract more buyers, secure offers and ultimately sell the properties. That's why my Seller of the property  I previously mentioned, agreed to offer a mortgage to a potential buyer.

We have a whole generation of agents who have never put together a deal with a VTB. Some of these agents have only been around during the crazy days of multiple offers and have no clue how to negotiate a deal.

We're now in a more balanced market where it's going to take some creativity, perseverance, patience and sometimes a bit of luck to put deals together.

 Now more than ever, people trading in real estate need someone to represent them who has experience, not a bidder in an auction. After all, homes are usually a person's biggest investment. Why take the risk of entering such a significant transaction relying on someone who doesn't know what they're doing?

If you're looking to buy or sell or if you simply have some real estate questions, please don't hesitate to be in touch. I'm always here and happy to chat.