I think most of we’re shocked and surprised to hear about the passing of former Finance Minister, Jim Flaherty.  There was speculation he decided to leave the Finance Department for health reasons, he was afflicted by a rare skin disease.  He denied the claims, and simply said that it was time to pursue opportunities in the private sector.  Today, his reason for leaving and stepping aside is moot, and it’s sad he didn’t have an opportunity to share moments with his family, when they were so close to getting him back.

I think it’s safe to say the late Jim Flaherty made many sacrifices.  Being Finance Minister is not a part-time job.  When you’re responsible for managing the country’s economy and budget, you can probably say goodbye to the nine to five work days.  His efforts and dedication to public service will shape his legacy.  We can quibble about all the changes to mortgage rules under his stewardship, but I think we are all better off today because of his steady hand while steering us through the global financial crisis.  In the grand scheme of things our economy bounced back rather smoothly after 2008; Canada was able to avoid much of the pain other economies endured.  That did not happen by accident. 

 I had the opportunity to meet with Mr. Flaherty on a number of occasions.  I always found him to be engaging and attentive.  He reached out to many business sectors because he wanted to hear firsthand what the needs of the day were. He reached out to our industry and learned the importance of the mortgage broker industry.  He took the time to meet with stakeholders in our industry when it would have been easy for him to say no need, I know better.  He allowed our voice to be heard, and he appreciated the contribution we make to home ownership in Canada.  His approach was a first for our industry, and for that we should all be grateful.  I know I am.

 God speed.

I wonder if purchasers who went through the bidding process would do it over again?   We’ve all made bad business decisions, it happens.
But if the purchaser feels like they were played, well, that’s not good for any of us.  The integrity of the real estate sales process is sacrosanct.

I assumed that real estate bidding wars was specific to pockets in the Vancouver and Toronto market place.  You know? Big home values, big incomes – the bigger-better syndrome.  Alas, my assumptions were incorrect.  I made a stop in Winnipeg a few weeks ago to meet with some of our broker supporters, and I was surprised to hear how prevalent bidding wars are in the Winnipeg market place.  I guess I shouldn’t be surprised, given the Globe ran article recently about what to do if you find yourself in a bidding war.  People on the front lines are talking about it, and Canada’s self-proclaimed National newspaper is providing advice on what to do if you find yourself in real estate auction.  I’ll assume that real estate bidding wars are no longer a one off or the exclusive domain of larger urban centers.

Should we care? I think we should.

Some would describe real estate bidding wars as the free market economy at work- a willing seller and a willing buyer.  The flip side of the definition is; the manipulation of the real estate process, predicated on an unsuspecting and uniformed buyer.  An argument can be made for both definitions.  Here’s where I stand -

I think it’s an unseemly practice, and should be stopped or at the very least an attempt should be made to curtail it.  Here’s how it works, the real estate agent convinces the vendor to list their property for slightly less than market value.  The listing states that no offers will be entertained for a period of time, somewhere between five to seven days.  Enough time is given to view the property, and hope that perspective purchasers, especially those who are frustrated and disillusioned because they’ve done this a number of times and have no home to show for it, will submit an offer on the prescribed date.  The hope is the offer will be based on emotion, excuse me…market reality, and over pay.  And that’s what’s happening with greater frequency today.  I often wonder if purchasers who went through this process could do it over again, would they?  We’ve all made bad business decisions, it happens.  But if the purchaser feels like they were played, well, that’s not good for any of us.  The integrity of the real estate sales process is sacrosanct.

The best way to ensure that the integrity of the real estate sales process is not questioned is by way of transparency.  The Competition Bureau’s attempt to have CREA (Canadian Real Estate Association) publish the historical sale price for the listed property, is a step in the right direction.  CREA is fighting this because of “privacy” legislation. I find that interesting given that the information is already public, and one can find it if they have the time, and know where to look.  Finding historical sales data shouldn’t be laborious or treated as tradecraft.  We live in an age of instant information, and there’s no conceivable reason not provide this information to purchasers, and existing home owners.  If you want an example of how this can work, go to Zillow.com.  On this website is the listing of every property there is for sale in the U.S. It also provides estimated property evaluation, and historical sales activity for all properties.  It would be a valuable tool for anyone finding themselves in a bidding war.  If a realtor councils perspective purchasers to go in at “x” dollars, the council can be judged and validated as quickly as the purchaser can tap his/her tablet.  Transparency and information assists the purchaser to make a better decision.  A home is shelter, it’s also the biggest single investment decision that most people will make in their lifetime. 

There’s a self-serving reason why I would like to see theses bidding wars come to an end.  If the purchase price of the home is over market value, the appraisal is not going to come in.  That’s the point when everyone who was party to the over inflated purchase price runs for the hills, and start blaming those who are left to try and fix it, the mortgage broker and lender.  Rather unjust.

Oh yeah, my quick-fix solution is this, the mortgage amount is based on the purchase price or appraised value, whichever is lower.  We should add the listing to that as well.  That would pretty much end the gaming of perspective purchasers.

Until next time,

Cheers.

Well, it sure as hell feels like that.  Canadians are known for their climate infatuation, and we spend a great deal of time talking about the weather.  “Is it hot/cold enough for you” etc.  Somehow, some way…it always gets back to the weather.

But this year, even the most pragmatic among us, those people who are always reminding you that extreme weather conditions are a part of living in this country, are spending time trying to book a vacation and escape.  It seems that everyone I talk to is suffering from winter fatigue, and looking for a respite.

I was talking to my travel agent this week and she indicated that she’s swamped.  With every new blast of sub-zero temperatures, with predictions of yet another snow storm, her phone ends up ringing off to hook because people want out.  It will be interesting to see the stats provided by the tourist bureaus in California, Arizona and Florida with respect to Canadians vacationing in their states this year.  Throw in Mexico and the Caribbean, and I would be willing to wager there’s a significant spike this year of Canadians looking for relief in warmer climates. This winter has been been brutal!

It’s March break in Ontario, and like thousands of others, we got out of Dodge for the week and headed to Florida.  Even with all its quirks and peculiarities, Florida is a great place to visit.  Sunshine, warmth, and all the amenities of home. What’s not to like?  Okay, so their beer is nothing more than flavored water, but it’s an easy hardship to put up with. If it comes down to shoveling the driveway, scraping ice of the car windshield, putting on twelve layers of clothing to go out and get a coffee, I’ll gladly inhale another American Coors Light…it’s refreshing and yummy.

Hopefully we’re in the last stages of the winter from hell. That’s a bit of oxymoron. If you’ve had the chance to get away,  good.  If you haven’t, what are you waiting for?  One final note, for all those who live in Ontario, and complain about the heat and humidity in the summer, remember: February is just around the corner.

Until next time

Cheers

I believe if you want to get a reading on the pulse of your business, you do so by sitting across from your customer and have a candid conversation.

I’m a little frazzled as I write this blog.  I’m now waiting to take off for Winnipeg. It was a bit off an adventure making my flight because the airport was jammed packed.  Maybe the number of planes taking off and landing today came as surprise to the folks Toronto’s Pearson International Airport.  Maybe someone should provide this information to the airport in advance because keeping it a secret is not fair to those working at the airport.  The delightful lady checking me on at the Air Canada counter mentioned to me that I was very lucky to make the flight because they were mere moments away to closing the flight.  Maybe I wouldn’t have had to cut it so close if I didn’t have to wait in line long enough to be able to consummate a relationship and actually witness the birth.  Whew, thank god for priority check in.  After asking me three times where I was going I decided to play Pictionary. Out comes a pen and a piece of paper…I drew a picture of Canada…and the Provinces going west…a stick plane…a stick man (that would be me) appearing to be sitting on the plane…and then I pointed to where I was going.  She yelled out, Manitoba!  I touched my nose with my finger to indicate she was right.  I’ll let you guess which I finger I used.

 You know what makes you forget about a crappy experience at Pearson airport?  Going to visit great customers in Winnipeg!  Seriously, this isn’t pandering or blowing smoke.  How can you not marvel and appreciate a community who can deal with the fact that it was colder in parts Manitoba this winter than on Mars.  Not kidding.  Evidently the temps in parts of Manitoba reached minus 45 with the wind-chill this winter – Its  minus 42 on Mars. That’s why they giggle at us Ontario when we say it’s so cold here, like minus a gazillion, which translates to minus 20.  In Manitoba the weather is a “so what”. They deal with it and move on.  Impressively, for a number of years, the broker market in Manitoba has moved forward.  For someone like me, who’s been in this business for a few years, it’s fascinating to watch an emerging broker market in Canada.  The broker space is still fairly new to Manitoba.  One of the things that I am really proud of was we, Merix Financial, were the first lender in the broker space to have boots on the ground in Manitoba on a full-time basis.  The common practice used to be to fly over Manitoba and then pop into Winnipeg once every six weeks.  We recognized that things were changing in Manitoba, and the market warranted a full time presence.  Most of the lenders in the broker space now have followed suit.  Sometimes it’s hard to be humble. 

The purpose of the visit is to sit across the table from some of our customers to get a reading on how we’re doing.  I believe if you want to get a reading on the pulse of your business, you do so by sitting across from your customer and have a candid conversation.  You look them straight in the eye and ask them to tell you the truth.  Surveys are important, and they have value.  But a leader of any organization has to take the time to meet with their loyal customers.  It’s impossible to meet every customer but it’s negligent not to meet any.  I promised myself 2014 was the year of customer engagement for me.  I was going to get my ass out of the office because we were spending too much time having meetings about having meetings.  I instructed my Senior Leadership Team to cut back on their meetings this year, and let’s get out in the field and work on enhancing our employees skill set – let’s find out what our customers are thinking.  I know – a novel concept.  That’s why I’m looking forward to meeting a few of our loyal customers like Buzz Grant, Naseer Chaudhry, Victor Schaefer, Jeff Moore and Jeff Sparrow.  What makes them great customers is that they understand businesses can have a hiccups, that sometimes circumstances are beyond your control, and they don’t flip you for a nickel.  That’s why their opinion matters.

 Until next time,

 Cheers.

I believe, maybe naively, that the vast majority of people conduct their personal and work lives in an ethical manner. Adherence to ethical standards is a byproduct of life experiences, and our ethical standards shape who we are. But even ethical people sometime make decisions that one could construe as being unethical.  So can you be ethical on a selective basis? I don’t know the answer to that question but I came across a demonstration of ethics that made me ask myself if I would have done the same thing.

It happened last weekend, in of all places, Sin City, Las Vegas.  We went to Vegas to catch a few shows and maybe place a wager or two. I’m not a big gambler but if I’m going to Vegas, I’m not going there to visit a museum.  My game of choice is blackjack.  I find poker to be far too cerebral, and you can spend a lot of time at a poker table not doing much.  Craps is fun game, a little difficult to learn at first but if you hear cheering in a casino you usually have to look no further than the crap’s table.  But a close second for fun can be a blackjack table.  Get a good group of people that know how to play, and want to have some fun, throw in a dealer that doesn’t act like he’s playing with his personal money, it can be a very entertaining evening.

That’s exactly the scenario we found ourselves in last Saturday night.  Everyone at the table was having fun, and for the most part winning some money.  It the middle of all the fun one of the players at the table did not collect his winning after a hand. The players that won were laughing and fist bumping each other, but this one player didn’t move.  After the noise died down, he quietly said to the dealer, “you just paid me on a hand that I didn’t win.”  He pushed with the dealer, meaning the player and the dealer both had a 20, and yet the dealer paid him a winning bet of $100. He indicated he couldn’t take the money knowing cameras record every hand. He didn’t want the dealer to suffer the consequences. Well, to say that we were all a little surprised by the player’s insistence that he could not accept the $100 would be a gross understatement.  My thoughts were clouded by the fact that I had just lost five hands in a row. So my first thought was, “buddy, the casino does well enough and it doesn’t need your help.”

A funny thing happened after everyone’s initial reaction; we all started pulling for the guy to win.  Everyone started to ask him questions, I guess to test his authenticity.  We found out he was from Schomberg, Ontario. The Yanks at the table asked me if all us Canadians were that honest. Ah…yeah…sure!  Thanks to copious amounts of Jack Daniels, they serenaded us with a rendition of Oh Canada.   It wasn’t bad, they got most of the words right. I’ll never know for certain if our playing companion from Schomberg is the real deal. Would he return a $10 bill if found it in the back seat of a cab? Would he submit a receipt to CRA as a business expense, when in fact it was for personal use? Did he ever cheat on a test or exam?  I’ll never know for sure. One thing I do know is that he left the table up money. A lot of money.  Maybe there’s a connection.

Until next time

Cheers