Owning a Calgary house more expensive: But still among most affordable in Canada

This is good news for those looking to buy. Prices are stable and affordable.

Owning a home in Calgary became more expensive in the second quarter of this year but housing in the city is one of the most affordable among major cities in Canada, says a report released Monday.

“The long hoped for rebound in the Calgary-area market that appeared to be on track earlier this year lost some momentum in the second quarter,” says the RBC Housing Trends and Affordability report.

“After posting two successive increases, home resales edged down during the April-June period, providing little impetus to prices, which continued to move sideways for the most part.

“With such absence of price pressure, the loss of housing affordability was minimal in the quarter. The RBC measures for the Calgary area rose between 0.4 and 1.1 percentage points, representing a smaller deterioration among major Canadian cities. Owning a home in the area, therefore, continues to be close to the most affordable that it has been in almost six years.”

The RBC Housing Affordability Measure, which has been compiled since 1985, shows the proportion of median pre-tax household income that would be required to service the cost of mortgage payments (principal and interest), property taxes and utilities. The higher the measure, the more difficult it is to afford a house. For example, an affordability measure of 50 per cent means that home ownership costs take up 50 per cent of a typical household’s pre-tax income.

In the second quarter, Calgary’s measures were 37.1 per cent for a detached bungalow, 38.5 per cent for a standard two-storey, and 23.0 per cent for a standard condominium. The measures increased by 0.6 per cent (bungalow), 1.1. per cent (two-storey) and 0.4 per cent (condo).

However, they are lower than a year ago by 3.1 per cent for a bungalow, 2.9 per cent for a two-storey and 1.6 per cent for a condo.

“Notwithstanding the latest bout of uncertainty, we believe that the strong economic fundamentals of Alberta and Calgary will find their way into the housing market and will support homebuyer demand in the period ahead,” says the report.

RBC says the average bungalow price in Calgary declined by two per cent year-over-year in the second quarter to $411,700 while a two-storey dropped by 1.6 per cent to $415,200 and a condo fell by 1.1 per cent to $249,000.

Sano Stante, president of the Calgary Real Estate Board, said prevailing negative economic conditions will restrain any increases in interest rates for awhile.

“Those are increases that we fully expected prior to these events and they’ve now been abated,” said Stante. “That was our biggest risk of deteriorating affordability.

“With an assurance that interest rates are going to stay low for the next 12 months anyway — and there’s somewhat of an assurance — then it really looks like we’re going to lead the nation in affordability especially when we start to get increased employment and in-migration towards the end of this year. That should really lend to a more robust real estate market.”

Robert Hogue, senior economist with RBC, said he too expects Calgary’s affordability to remain about the same.

“Previous to a few weeks ago we expected higher interest rates would start really putting more and more pressure across the board in Canada including in Calgary on the monthly costs of home ownership,” he said. “Now we’ve pushed everything out to the middle of next year.

“For the next few months or quarters I think chances are that affordability is probably will go sideways, the same as the housing market.


© Copyright (c) The Calgary Herald

Analysis: Canada rates seen lower for longer; cuts unlikely

This is good news for people in variable rates AND fixed rates.

It all means that mortgage rates are going to stay low for longer than expected. Prime will stay lower longer partly because the US has for the 1st time said that they will leave the very low rates until 2013 to give the market something solid to work from.

That will also cause the fixed rates to stay lower, longer.

Good news all around.

By Ka Yan Ng

TORONTO (Reuters) – A dovish U.S. Federal Reserve will likely force the Bank of Canada to keep its interest rates lower for longer, but market bets on a Canadian rate cut by year-end are unlikely to pay off.

Analysts said a rate cut would send all the wrong signals for an economy that is growing, albeit slowly, and could hurt the central bank’s credibility.

“In the current situation, a rate cut by the Bank of Canada would mean that you have a second recession in Canada,” said , Charles St-Arnaud, Canadian economist and currency strategist at Nomura Securities International in New York.

“And that’s not something that we see happening.”

Expectations for Canadian interest rates have swung wildly in recent weeks. As recently as July 19 traders priced in higher expectations of a rate increase this year, following unexpectedly hawkish language from the Bank of Canada.

A July 20 survey of primary dealers showed most saw a rate hike in September or October.

But tightening expectations fell sharply as the U.S. debt ceiling debate and the downgrading of the U.S. credit rating by Standard & Poor’s fueled fears of a recession there, triggering some of the worst stock market selloffs since the collapse of Lehman Brothers in 2008.

Canadian overnight index swaps, which trade based on expectations for the Bank of Canada’s key policy rate, and short-dated government debt began to show expectations of a rate cut rather than an increase.

The Canadian dollar also fell more than a nickel against the greenback as the outlook for monetary policy moved from tightening to easing.

Rate cut expectations were reinforced by the U.S. Federal Reserve’s unprecedented announcement on Tuesday that it would likely keep rates near zero for another two years.

Analysts said the Bank of Canada is likely to keep interest rates lower for longer than previously expected because of the Fed move. One issue is that widening the rate differential between the two countries could cause an unwelcome appreciation in the Canadian dollar.

But they caution that swap markets, which are pricing in a quarter-point rate cut before year end, have it wrong.

Analysts said a cut is not needed because the Canadian economy, though highly dependent on the big U.S. market, is still growing. The central bank’s key policy rate, currently at 1.0 percent, is also seen as still being very accommodative. The rate was cut to a record low of 0.25 percent after the financial crisis.


Those emergency rates provided conditions for the domestic housing market to surge to bubble-like proportions in some parts of the country, and allowed Canadians to take on massive personal debt loads.

Analysts said a rate cut could reignite these two segments of the economy, risks that have already been flagged by the central bank.

“The bank is going to need a lot more evidence that the downside risks are going to stick with us before they totally rewrite their script from the last statement and move toward outright easing,” said Derek Holt, an economist at Scotia Capital, noting that dovish language would inevitably have to accompany a decrease in the central bank’s key rate.

“That would be a blow to business and consumer confidence in the country as opposed to the more supportive role, which would be essentially to just stay off on the sidelines and not do anything on rates for a long time yet.”

Holt is already the most bearish among Canada’s 12 primary dealers — institutions that deal directly with the central bank as it carries out monetary policy — and is comfortable with his call that the next rate hike will be in the second quarter next year.

If anything, it could be later, “if the Fed is true to its word in terms of maintaining stimulative policy all of next year and into 2013,” he said.

Analysts said the risk of a rate cut is now more likely than an increase, given Canada’s trading ties to the United States and the risk that a recession there would also pull Canada’s economy lower.

“It is probably appropriate to price in some risk of the next move by the BoC being more a cut than a hike, just at this stage,” said Michael Gregory, senior economist at BMO Capital Markets.

“But I think that fades within six months and you start to believe that is going to skew to the next risk being a hike rather than a cut.”

($1=$0.99 Canadian)

Teetering on the edge of a rate hike – not all bad news

This article below is good news for everyone with a variable rate – as it looks like they will not go up that fast.

The data below is the most accurate with out any hype that I have seen is a while.

Teetering on the edge of a rate hike

Well we have a better idea of where Bank of Canada Governor Mark Carney stands, and it appears that we’re teetering on the edge of a rate hike.

This comes as no surprise, with many analysts crying for a rate increase for some time now. The question is whether it will be at the next meeting, or the meeting after that, or even before year end.

The key takeaway is that Carney signaled that ‘some’ government stimulus ‘will’ be withdrawn, rather than ‘all’ and ‘eventually’ withdrawn. That means he’s close to pulling the plug. We are looking at growth and employment numbers for the second half of the year and if it remains strong, we may see rates move before year end.

With this week’s announcement put on the backburner, analysts are focused on where we’re going over the next several months, and they certainly have a lot to consider in their projections.

The Bank has a goal of a neutral rate, which bolsters the economy yet controls inflationary pressures. There’s no magical ‘neutral rate’, but economists figure it’s in the 3%-4% range. However, Carney seems reluctant to pull the trigger on rates, considering the likes of the U.S. economy along with the issues we see in several European countries.  If we widen the rate gap with the U.S. it will only drive the loonie up further, creating more resistance for economic growth.

Another external factor is the European sovereign debt crisis, in which Carney senses more concern over their troubles that the U.S. will default on its debt. The chances of the U.S. defaulting on its debt is slim and more of a scare tactic than anything. Don’t get me wrong, it’s a huge problem and the Obama Administration doesn’t know whether to turn left or right, but at the same time, if the US defaulted we’d be talking about a whole new worldwide fiasco.

Since the Bank of Canada doesn’t declare what a neutral rate is, it’s hard to determine when and how much rates will move when they do. By the way that Carney is talking it appears as though when rates do start to rise that they will in a controlled manner and they won’t be too aggressive. Analysts and economists shouldn’t assume that rate increases are going to be quick and steep.

Here at home our economy seems to be moving along as projected, and any sudden, high rate increases will be sure to stifle our growth. It looks like if everything goes to plan we may see a modest hike in October, but if some of the assumptions are off a bit it may be later before we see any movement.

Variable rates are still good

In a time characterized by widespread economic turmoil across the US and Europe, there was a certain comfort to be taken in the mundanity of the Bank of Canada’s (BoC) report today. As almost unanimously predicted, the BoC left overnight rates unchanged at 1%, meaning the prime rate stays pegged at 3% and the variable rate mortgage holders of Canada continue to prosper. However, there were some nods towards a rate increase approaching on the horizon.  The quote of the day being the warning that monetary stimulus “will be withdrawn”, a statement whose severity is underscored by the omission of the word “eventually”, which was mentioned at the BoC’s May 31st meeting.

However, it is our contention that we are unlikely to see rate increases at the next meeting, in September. A far more likely target would be December at earliest or, more likely, early next year. This prediction comes with a backdrop of increasing pessimism concerning the US. It is our belief that the US policies for growth, characterized by strict austerity measures, could see the US plummet into an economic purgatory from which it may find it hard to escape. This would restrain the BoC from making any substantial rate hikes and, while an increase in rate is almost certainly just around the corner, a series of hikes may not be sustainable. When you add this to the increasing likelihood of Greece’s loan default and now the potential inclusion of Italy into the economic abyss, the case for dramatic rate hikes only erodes further.

While the Bank of Canada will likely act to stem core inflation, which it has highlighted as “slightly firmer than anticipated”, the prevailing consensus remains that this is being driven by “temporary factors”. The bottom line is that we think the 40% of Canadian home owners who are now in variable mortgages can rest assured that they’ve made the right option. Obviously if you’re not comfortable with the inherent risk associated with variable mortgages there’s always the fixed option and it’s rare to see fixed rates so low, so it’s a nice option to have. 

If you should have any questions on anything you’ve read here or are interested in perhaps switching to a variable rate mortgage and would like some of our sound, unbiased mortgage advice then we suggest you give us a call today at 403-681-4376.

The case for using a broker has never been stronger, with more and more Canadians beginning to realize that savings associated with utilizing the services of a broker. We’ve included a link to this Bank of Canada report  outlining the savings on “search costs” which brokers provide. They demonstrated that “over the full sample the average impact of a mortgage broker is to reduce rates by 17.5 basis points.”  For all those mathematically limited soles like me, that means $1,670 of interest savings on a typical $200,000 mortgage over five years. Don’t be one of those people who let the comforts of a familiar bank name dissuade you from making the savings available to you. Call Mark Herman today!

Alberta to top province for economic growth

Oil to drive Alberta to top province for economic growth:3.8% forecast for next two years

CALGARY — Alberta will lead the country in economic growth this year and next year, according to a report released Wednesday by Scotia Economics.

The report says real GDP growth in the province will be 4.2 per cent this year, the highest in the nation, followed by 3.3 per cent growth in 2012, which will tie Saskatchewan as the highest in the country.

Scotia Economics is forecasting Canadian economic growth of 2.7 per cent this year and 2.5 per cent in 2012.

Alberta will once again lead Western Canada’s outperformance, with growth averaging nearly 3.8 per cent in 2011-12,” says the report. “Heavy oil output is being ramped up, with further investment and construction activity underpinning a multi-year period of solid growth.

“The manufacturing and service sectors will experience a positive spillover as physical and human capital are added to support the expansion. However, rising construction and labour expenses will also weigh on business costs, and may pressure capacity towards the end of the forecast period.”

The report says the oil sector will continue to be Alberta’s growth engine with significant investment and output gains contributing to the increased momentum. Total crude oil output is projected to expand by nearly 30 per cent from current levels by 2012, bringing total production to 50 per cent above 1999 levels, it said.

“Alberta is expected to lead the country in job creation over the 2011-2012 period. The province lagged the national pickup in hiring earlier this year, but has been gaining momentum ever since. Alberta has one of the tightest labour markets in Canada, which is expected to put increasing pressure on wages,” says Scotia Economics.

Employment growth of 2.7 per cent this year and 1.8 per cent in 2012 is forecast for the province.


Rates increasing from 111-year, all-time lows now or soon!

Below is a great blurb on what is happening with yo-yo predictions of the future of mortgage rates. Get pre-approved now, consider locking-in if you were going to OR redo your mortgage now for the last of these low rates!


The laws of gravity dictate that what goes up must come down but I’m afraid, when it comes to the laws of economics and interest rates, what goes down must come up. Ultra-low interest rates are only a short-term solution and not sustainable in the long run. This is something which all economists agree on. Unfortunately this is the point where the common consensus ends and opinions diverge. The issue which is most divisive amongst the experts at the moment is exactly when these rate hikes will begin. As recently as a month ago many experts were predicting that rates would remain at their current levels until as late as March of 2012. A tumultuous week in the markets has seen many of these experts revise their predictions, with many now citing September as the month to bring a halt to the rate freeze.

Surprising inflationary reports for May demonstrated the fastest annual rate in eight years. While Mark Carney previously highlighted the transient threat of rising gas prices, which witnessed a 30% rise, gas prices were not alone in driving the inflation. Even the core rate, which strips out the more volatile prices of food and fuel, rose to a rate of 1.8%, quickly racing towards the Bank of Canada’s 2% target rate. With Canadian inflation now standing at 3.7%, exceeding those of Australia (3.3%); Mexico (3.3%); Chile (3.3%) and Columbia (3.0%) the calls for increased rates have grown ever louder. The fact that these countries all have short-term rates exceeding 4%, while Canada’s lingers at 1% only strengthens the case for a rate increase.
This week also saw a dramatic surge in 5 year bond yields. On Monday the yield had fallen to 2%, leading many to speculate that lenders would be forced to further drop fixed rates, which have already been subject to a series of slashes in the last few months. However these calls were short-lived as yields rebounded strongly in the face of the inflation report combined with renewed hopes that the European Central Bank could be able to prevent the default of Greek debt.

So what does this mean for your mortgage?

It means that if you are looking for pre-approval for a purchase or refinance there has never been a better time to secure your rate with Mortgage Mark while rates are still low. For those of you in a variable rate we’d like to reassure you that we still think this is still a good option. However our variable rate clients should prepare their finances and make sure they will be able to handle a potential increase to their payments coming in September. If you would like further details on any of the information listed here we implore you to call Mark Direct at 403-681-4376 for our sound, unbiased mortgage advice.


Don’t be afraid to leave your bank for a better rate

Don’t be afraid to leave your bank for a better rate

A new survey from CMHC says the vast majority of Canadians renew their mortgages with their original lender, but you can save thousands over the life of a mortgage by looking at competing rates from competing institutions and mortgage brokers.

Jay LaPrete

A new survey from CMHC says the vast majority of Canadians renew their mortgages with their original lender, but you can save thousands over the life of a mortgage by looking at competing rates from competing institutions and mortgage brokers.

Garry Marr, Financial Post · Jun. 23, 2011 | Last Updated: Jun. 27, 2011 7:47 AM ET

Are the banks doing an incredible job of retaining customers or are Canadians just too lazy to shop around when renewing their mortgages?

One finding of a survey by Canada Mortgage and Housing Corp. released this week was that 89% of consumers renewing their mortgage stay with the same financial institution. And 68% stay when they are doing a refinancing.

“They stay with the lender because of rate and they leave the lender because of service,” says Pierre Serré, vice-president, insurance product and business development, with CMHC.

Consumers are more aggressive shoppers when they are seeking a mortgage to buy their first home than they are upon renewal. Only 57% of first-time buyers took out their mortgage with their existing financial institution.

Rob McLister, a mortgage broker and editor of Canadian Mortgage Trends, says the banks are doing more to retain customers but there is a pretty good chance you won’t get the best deal if you renew automatically.

“Most of the time people do some rudimentary research before they go back to their lender. Not so long ago people would just take the renewal letter, sign it and send it back. It still happens but not as much anymore,” he says.

Mr. McLister says the banks “are not as stupid” now and when they send out renewal rates they have special offers. The posted rate on a five-year fixed closed mortgage today is 5.39% but he’ll see clients get offers in the mail as low as 4.04% in a renewal letter. The problem is a broker could probably get you 3.59% — meaning you just left 45 basis points on the table.

On a $250,000 mortgage at 4.04% paid monthly and amortized over 25 years, the monthly payment would be $1,320.48, with the interest cost during a five-year term at $47,014.79. Chop the rate down to 3.59% and the monthly payment drops to $1,260.09 ,with the interest over the five years falling to $41,658.85.

If you were crazy enough, or lazy enough, to take the posted rate, you would pay $1,510.01 monthly for the same mortgage and your interest cost would jump to $63,201.92.

Let’s just say it pays to shop around. So why don’t more people do it?

There is a perception that it’s difficult to switch banks, plus it will cost you some money to switch. Yes, it’s a hassle but for $5,000-plus, count me in. As for the costs, the bank you are switching to will often cover your legal costs. Even if it doesn’t or say you face a discharge fee of $300, that’s small price to pay upfront.

Mr. McLister says if you change the terms of your mortgage and refinance, it could cost you as much $700 to switch, something you would have to do if you have a home-equity line of credit or have a collateral charge on your mortgage.

Elton Ash, regional executive vice-president with Re/Max of Western Canada and a long-time realtor, says for most people if the customer service is good, they stay.

“Unless the lender has really screwed up, they stay,” says Mr. Ash says. “It’s like realtors, not all of them charge the same fee. There are lots of discounters out there but it’s based on service levels more than costs and fees, if it’s relatively competitive.”

The banks are more competitive these days for existing customers. Part of the reason is it can cost a financial institution up to 30 basis points to attract a new customer, so why not just spend the money on retaining existing customers?

“We start calling customers in advance to remind them their mortgage is coming up,” says John Turner, director of mortgages at Bank of Montreal. “It is an increasingly competitive marketplace and customers are shopping. It’s in our interest to advise the customer of their options. That could include refinancing the mortgage overall.”

Farhaneh Haque, regional manager of mobile mortgage specialists with Toronto-Dominion Bank, says her bank starts calling customers as much as 120 days before renewal to discuss options.

“This all about relationships, they are not going to up and leave for a five-basis-point difference,” Ms. Haque says.

She’s right. A 0.05 percentage point is not a great reason to sever your relationship. But renewal time is a great time to test your relationship with your bank and get it to show you some love — or a better rate.

Financial Post


Too Big To Fail

Too Big To Fail

This is a re-post of a great blurb by Boris Bozic, President of MERIX, a broker only lender. He is a pretty smart gent and his light and direct points are worth the 3 minutes it takes to read this.


28 Jun

20110626-103935.jpgThis was a term we were all too familiar with back in August and September of 2008. It is also the name of a new HBO movie which chronicles what transpired at the beginning of the sub-prime mortgage meltdown. HBO assembled an outstanding cast, and given the subject matter the movie was rather entertaining. I would highly recommend watching the movie. It is a good reminder to all of us that the term boom and bust is as applicable today as it always has been.

In typical Hollywood fashion, a liberal bias amounting to revisionist history, the movie tried to blame George W. Bush and Ronald Reagan for the meltdown, and all other evil things. The truth is you can go back to the Jimmy Carter administration, and the passing of the Community and Reinvestment Act. That work of art stated that home ownership was a right, and not a privilege. This is where the slippery slope began. Then old Slick Willie, aka “which way are the political winds blowing today because that’s what I’ll stand for”, Bill Clinton, put that program on steroids. Suffice to say the responsibility for the meltdown, and the nuclear fueling of the problem, is equal parts Republican and Democratic.

The movie is a great reminder of how perilously close we came to an economic meltdown. How our standard of living was at the precipice. If you think this is hyperbole, because this was really a US issue, the reality is that this carcinogen (sub-prime mortgages) infected world markets. I can’t help but to think about the auto worker in Windsor and Detroit, the welder in Germany, the machinist in France, all, asking the same question: “Tell me again why my pension has taken a hit because of some mortgage problem?” No one from Wall Street could explain what happened in laymen terms. The average person cares little about default swaps, derivatives and mortgage-backed securities. All the layman cares about is finding out who the hell let this happen. That question has still gone unanswered.


The movie doesn’t deal with the who. The movie played up of the part about the moral dilemma the government faced. Who did the government decide to bail out, AIG, and who did they allow to fail, Bear Stearns and Lehman Brothers. All very fascinating and dramatic. But after watching the movie I couldn’t help but ask myself the following question: “How the hell has no one gone to prison over this?” I’m all for a free market system, and the pursuit of wealth, but reckless endangerment of our economy and standard of living should not go unpunished. There were individuals and institutions who knew full well they were passing on toxic assets. They were passing on the risk so they didn’t care. They could care less about the consequences. Yet none of the perpetrators of this ingenious fraud has ever been charged or convicted. You would think at least a couple of them should be experiencing the joys of being passed around in prison for a carton of smokes.

New Virtual Closings for lawyers – the next thing on the way

Innovation In Unlikely Places – Introducing V-Close by Vanguard Law Group

Sunday, 26 June 2011 13:42

Change is often the end result of something. Once in a while, change is introduced to create not only new results, but an entirely new direction.

Enter V-Close, the new virtual document signing service,  for clients needing to sign documentation for a Real Estate purchase or sale transaction, born not only from the evolution of technology, but of an understanding of the preferences of the market for convenience, over all other benefits.

Innovation in Unlikely Places

Sanjay Soni, Managing Partner with Vanguard Law Group, recognizes the irony of the wave of change coming from a law group. In fact, the company’s tag line reflects the tongue in cheek nature of the birth place of this evolution: “Innovative Law Firm? Oxymoron? Not Anymore!”

Soni explains: “People are used to technology and access to information in certain parts of the economy, and in certain services. They are not used to it when it comes to legal services- in fact it is quite the opposite. “

“When people think of law firms, technology and innovation is not what comes to their head. We are going after a market that we think is quite untapped.  Technology is around you all the time, every day- but when you think about having to go into a lawyer’s office that is not what comes in to your head.”

Much like in the Real Estate and Mortgage Industries, for Soni clients are not only who you do business with, they are why you are doing business at all, and refers to this as the impetus for the advances they have made “My philosophy is very simple: Unless you get clients, you don’t get paid…We wanted to bring a customer centric focus to a law firm… How do we do this? How do we make clients feel like they are getting value out of what they pay for, and really mean it?”

So then, in these client-centric industries, it is about understanding the value of an offering, and making the client aware of it.

What is V-Close?

Education and understanding are some of the cornerstones of communication- necessary for any productive relationship. For Real Estate and Mortgage Professionals, the question might be, why this service, and how does it work- so that they can support clients in weighing their options.

It’s simple really. For a fee comparable to traditional document signing, you essentially sit in your living room, or whatever location suits you, at a designated time, and await the arrival of the Commissioner of Oath.

Says Soni,” The way it works is that we have a secure video link between ourselves, and one of our remote commissioning agents. All of our commissioning agents are Commissioners of Oath, registered with the Attorney General’s office to Vanguard Law Group. “

“They have very modern laptops with dual flat screens. They go into a client’s home after an appointment has been set up. They will turn on their computers and establish a secure wireless link with our central office here in Mississauga, and at that point the clients can see me, and I can see them, and we go over the purchase or sale documents together. Once I’ve finished the explanation of a specific page, we get the clients to sign on a physical piece of paper that the commissioners have with them at the time of signing.”

Demographic Spread

One challenge that Realtors and Mortgage Professionals encounter is a one-size-fits all attitude to technology, as well to servicing the needs of their clients from different generations.  Different generations have different needs, understanding, comfort level and expectations when it comes to technology.

What is common among clients though, is the appeal of an idea that they are empowered to pick and choose service in a location and a time that puts them first.

What is unique about this product is that it appeals across generations, for different reasons, as Soni points out, and the limitations from a demographic point of few are few. “We look at every individual who is over 19 as a customer, which is kind of neat. As long as you are selling, refinancing or purchasing a home, we have the service for you.”

This is demographic reach in action, with seniors happy that they don’t have to venture out of their homes (often a challenge for the most hale and hearty with Canadian winters), and for Gen X & Gen Y, they are drawn in by the technology itself.

“This is for every client.  We’ve seen that the older demographic may not be into computers so much, however, they are into convenience. They actually understand the value of this to their time.  The trade-off from the technology perspective is really their busy lives, and the convenience that this offers. “

“For the younger demographic, they may be first time homebuyers, so they may not realize the hassle involved with going into a lawyer’s office, but they get it from a technology perspective. “

Convenience is the catalyst

Pick an industry, any industry, and you will see clear evidence of evolution driven by delivering customers what they want. And in this age of instant information and convenient access to just about everything at hours that suit consumers, it only makes sense to be open for business when business is there.

To really understand a clients’ needs and wants, one must almost break down processes, working backwards, to understand its’ genesis- rather than just simply trying to market the end result.

As Soni agrees, when you start and finish with the client’s needs, the possibilities are profound.

“I think there is much broader application with what we are doing than just the legal industry… We’re not springing into different areas, but I had a meeting with my accountant the other day to sign paperwork, and the thought went through my head, why am I in your office? I’m signing this paperwork- I can be signing this on the bottom screen, while I can see you on the top screen.”

“There are tremendous implications here, if people think about what they do, and they break down the process of what they are doing and look at what the technological substitute might be, I think there is very wide application in the Real Estate Industry. Anywhere where you need to sign a piece of paper, it should be in an electronic format- and if you need to consult with someone, then you can basically do what we are doing.”

Soni says too, that they have begun to build upon their own design.” We have realized that we have the infrastructure in place- we can actually now create a draft will, based on a checklist, and send it to the customer and then go over the final doing exactly the same process- so now you can do a will at the same time as you are signing mortgage documentation.”

Bricks and Mortar Optional

Part of introducing and selling change, is dealing with objections- and objections and scepticism are not uncommon, especially in the areas of technology- as many consumers are afraid of things like fraud, identity theft and of compromising personal information.

Soni suggests that one must recognize these objections, and address them gently, offering alternatives, and assures too that in theory, there are no differences between a traditional document signing, and a V-Close.

“There is no difference on the other side. If they need to ask questions, they ask questions. If identification needs to be taken, it’s taken by the commissioning agents.

Everything is recorded, which actually enhances the process. From a fraud perspective, it is actually better, we think, than the process today. The Commissioner is key in all of this… We can basically replicate the experience from the office in your own home.”

What’s in it for Realtors?

In this competitive industry, Realtors are always trying to boost value in their relationships with their clients, as a means of standing out from the crowd. Soni says that V-Close offers an opportunity to do just that: “The value add for the agent is to say- You are busy people…Here is a law firm that not only has the technology, but will actually make it easier for you, where you don’t have to take any time off of work, or you don’t have to take any time in the evening… the experience that they have will be

unrivalled by other experiences that they might have- and that is simply based on their busy lives, and the conveniences that we offer.”

Service comes down to facilitation and ease, and Soni gives an example:”Last week- we had an actual signing in two cities at the same time. Father and Son were both on title on the home. The father was in Ottawa, the son was in Toronto. We had two Commissions at the same time, one in Ottawa, one in Toronto- and then I linked them in on my screen. They signed in two cities at the same time, and I did the explanation to both of them. ”

In client-centric business, sometimes there are challenges in meeting clients needs, and in coming up with new ways to over deliver- in ways that the client does not even expect.   What this opportunity represents is a chance to give more to your clients, by anticipating their needs before they do. In knowing about the options, and presenting them with a solution that they don’t expect, perhaps because they don’t even know the technology exists, you communicate your own value, and set your service apart.

Variable rates are still really good.

It’s that time again. When Mark Carney and his cohorts ascend Mount Olympus once more for the latest round of talks to decide the immediate future for Canadian mortgage holders.

The prevailing feeling however is that little will result from this month’s scheming and plotting. Another meeting will pass with rates unchanged and the variable rate mortgage holders can rest easily until July 19th signals the next round of talks. While some speculators – who haven’t been paying enough attention to our blog – earlier in the year cited this meeting as the one to kick off a series of interest rate rises, it now appears those speculators were somewhat premature in their estimations. Recent developments have meant it is now highly unlikely we will see a rate increase tomorrow, Tuesday, May 31, 2011.

Economic growth for the first quarter in the US, Canada’s primary trading partner, came in at a highly disappointing 1.8% with consumer spending slowing. And while Canada’s strong dollar has seen investment increase and manufacturing experience a long overdue rebound, these are still highly uncertain times for the Canadian economy. As expressed by Governor Mark Carney earlier this month, fears persist that rising commodity prices, combined with  an inflated currency could impede Canada’s ability to increase demand in the US. The commodity boom is no longer serving Canada in the way it had previously during China’s rapid expansion. These concerns combined with the ever worsening European debt crisis and the impending impact of fiscal austerity in the US driven by irrational desires to cut the budget mean a rate hike tomorrow is highly unlikely.

While we feel that interest rate rises are coming before the end of the year we still feel the variable rate offers the greatest value for money. However we always advise our clients that if they feel ill-suited to the uncertainty of a variable rate, they should opt for a fixed. And the good news is that being adverse to risk has rarely been so well rewarded, with fixed rates plummeting in recent weeks. Fixed rates, as we predicted they would, have fallen repeatedly and there has never been a better time to opt for fixed. If you have any questions about anything you’ve read here or would like to hear how the impending rise in prime may affect you, please feel free to contact us at403-681-4376 for sound, unbiased mortgage advice.