Canada’s housing market will be rocky. Here’s how to stay resilient in trying times

Getting rejected is an all too common experience for anyone in the housing market these days.

Potential homebuyers may not qualify for as many mortgages as they expect or may not receive as much financing from their lender as they hope.

And that’s not likely to change anytime soon if current forecasts for the Canadian housing market come true. RBC expects national home prices to fall 14% by next spring. For borrowers who have opted for adjustable or variable rate mortgages, rising interest rates are beginning to take their toll. And the Bank of Canada has signaled that it is ready to drive down inflation at all costs, meaning more rate hikes are on the horizon.

“There’s going to be some really tough conversations,” said Dustan Woodhouse, president of Mortgage Architects, at Mortgage Professionals Canada’s 2022 National Mortgage Conference in Vancouver on Sunday.

And those conversations don’t just involve panicked calls from customers. Mortgage brokers themselves face rejection in various forms.

How should mortgage brokers build resilience to rejection? Woodhouse is not mandatory. “My answers are probably not your answers,” he says. After all, Woodhouse does point out that he’s a 6ft 2 white male who was born in Canada to parents who are still together. His experience certainly doesn’t apply to everyone.

Advice for brokers

Instead, Woodhouse suggests that realtors ask themselves a variety of personal questions, such as: Who are you? What problems do you have (“Are you a problem drinker?”) and do they make you less trustworthy? How can you fix these problems?

Trust, a key component of the mortgage business, Woodhouse jokes, is not fixed. “Trust absolutely depends on what you do, what you say, who you’re with,” he says.

Woodhouse also suggests that mortgage brokers consider exploring these issues with a therapist whenever it feels comfortable. It can’t come right away. About six years ago, Woodhouse began speaking to a therapist who, on his second visit, told him he needed to “feel his feelings.” He said he did not go to therapy for another two years after that.

Brokers should also take a critical look at their use of social media and whether it really serves a purpose in their business, or is it just wasting time that could be better spent elsewhere. “I don’t think social media gets you that much business,” says Woodhouse. “I think it brings you some recognition. I think it keeps you relevant in the eyes of previous customers. I think posting content is important, but be really careful.”

Then there is the issue of competition. Brokers build their reputation on their sales volumes and rankings. However, Woodhouse suggests that brokers use sales data in a slightly different way. He said realtors should know rough numbers, like the total number of home sales in their province each year and the percentage that requires financing.

“What is your total number of potential annual transactions?” asks Holzhaus. “And how many does it take to survive?” Breaking down seemingly insurmountable sales targets into more manageable numbers can reduce the stress associated with running a mortgage business today, he says.

These questions raise even more questions: What does a broker do best? Do they feel positioned as an expert in dealing with customers? Why do people like working with a particular broker?

At the end of his presentation, Woodhouse made just one suggestion — worded as a question — for brokers in the space to become more resilient during tough times: “Who can I call to say, I love you, thank you, I miss you?” he asked. All of these ideas can help brokers become a little more resilient in today’s tough times.