What’s Happening Outside of Your Sector?
| November 05, 2013
Industry professionals have a lot to process on a daily basis. Rules, industry standards, schedules and client care all have to be kept top of mind, so it’s easy to see how some industry professionals may not be 100% aware of the trends in sectors outside of their own.
Recently, the Real Estate Council of Alberta (RECA) hosted a meeting of the Mortgage Brokers Advisory Committee and one of the topics discussed was trends within the mortgage sector that may affect professionals working in real estate.
- The financing approval process is often taking longer than some real estate professionals may be used to and mortgage financing condition dates on accepted conditional offers are often too short given the current reality of the mortgage lending environment.
- Lenders are increasing their due diligence by requiring appraisals more often.
- The recent Alberta floods have also disrupted financing approvals. Properties that are in a flood zone or that have postal codes related to a flood zone are coming under increased lender scrutiny. Mortgage lenders may require an independent home inspection and proof that a property will be insurable. Real estate professionals may want to advise their clients to get insurance preapproval to reduce financing approval delays.
- Condominium buyers need to provide condo documentation and reserve fund studies, which they received from the seller, as soon as possible to the mortgage broker. These documents are vital for mortgage professionals to have in order to secure the required financing. If a condominium has an out of date engineering report or reserve study, mortgage lenders may not approve financing. Likewise, if a condominium corporation is in poor financial shape or there is an inadequate reserve fund, financing may be difficult to obtain.
If nothing else, given the above trends within financing, real estate professionals may need to advise their clients to compromise on their financing condition dates to ensure that buyers have sufficient time to obtain the necessary financing. They should also advise their clients to remain patient during the approval process.
At the end of the day, it is important for all professionals to keep an eye on trends in related industry sectors. In doing so, they can help ensure consumers receive the most comprehensive service possible.