Wednesday, October 8, 2008

Are we suffering from FUD?

FUD is a sales and marketing acronym which stands for; fear, uncertainty and doubt.
Are we currently suffering from FUD? With everyone taking a wait and see position, we will make every negative prediction a reality.

I received this today...

Over the last two weeks, I have never seen in my 22 years of lending, seen so much doubt and fear in our real estate market. Guest Contribution Lindsay Doke RBC

Houses sitting longer on the market, in some cases having to find solutions when the homes don’t sell, and we have approved a purchase mortgage for the client. Clients holding off buying as they don’t want to cash out their RRSP's or investments as they have dropped more than 20%.

The US in huge economic turmoil and on the brink of recession. Questions as to whether we, in Canada, could be victims of the same. When our variable pricing dropped to 0 - no discounting on new business, last Friday I too was shaken, until I took some time to gain perspective and reviewed our Economy and the marketplace .


Prudent lending and wise decisions have kept and will keep our economy running stable with some growth in the last quarter. This week, two of the banks, TD bank and Ing Bank both have increased their prime to 5.75%!!

These two banks were offering outrageous pricing on mortgages over the past 9 months and now it has caught up with them. Just as it did 2 years ago with Bank of Montreal. This past week some major individuals in lending with TDCT in particular, are now out on the street armed with resumes seeking new employment.

"Folks you cannot survive in our business and sustain a growing business if you market on price alone".

The increasing presence of smaller low commission real estate brokerage houses you see going after your business is proof of this!!

RBC has not changed their mandate on how we do our business, providing a competitive product and leading with expert advice VALUE vs. PRICE

In the past three days the rumors that world wide banks would start to decrease their interest rate reductions has become reality. Reductions in Australia, England , France , US and now today in Canada, have been to jump start the economy once again and encourage consumer spending and confidence in the real estate market. Our feds this afternoon announced a 1/2% drop in the bank prime not to be confused with bank the lending prime which is 4.75%.

The variable remains the best product for those with Good cash flow. Growing incomes due to growth in their industry motivate buyers who want to maximize interest cost savings.

It is not however, for everyone.

Rest assured I will always advise at least 2 options for your clients to consider. That helps them make the most informed decision about their mortgage.

As my client of the month said it best.
"Lindsay I was afraid of the variable mortgage because of what friends and family were telling me. When I actually looked at the trends for the past 7 years with you and read the third party article you gave me the fears turned to confidence. I did my own research and realized it has been and still continues to be the safest product in the marketplace. By safe guarding our variable rate by increasing the payments by 10% (what the RBC mortgage allows), we are limiting the potential to ever need to convert our variable into a fixed term."

We all know when we let our clients speak for us and we act in their best interests that’s the best for of advertising we can ever have! Deliver sound expert advise folks and win your client every time!

Always here to help you sell more homes!

Lindsay Doke Trusted Mortgage Advisor cell 416-464-6423 fax 905-785-2325 email:

David Pylyp; Lets get out there and snap up a few bargains!

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