Why Commission Split Isn’t Everything & Why I Work For City Wide

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Champion

There are a lot of reasons why I love my job. I love people, I love helping people & I love being a part of what is such an exciting & special time in my clients’ lives. I also love building a business & the income opportunities that lay on the horizon. Would I still do this job if I won the lottery? Without a doubt (buuut I might turn my phone off at 5).

 

When I first started in the business, I was as green as they get, so it was important for me to find a good group who could teach me to build my business the right way. Commission split (the percentage of your finders fee that is paid to your brokerage) was of course something I asked about, but in all honesty it didn’t play a significant role in my decision of where to hang my license & the longer I’ve been in the business, the more firmly I believe that a focus on split is short sighted.

 

One of the best parts of our office is the support. We have some top shooters who do a ton of volume & brokers who specialize in just about every niche you could imagine. This is a huge resource. I can’t tell you how many times I’ve saved a deal or found a solution way out of left field for a client thanks to insight or a contact from one of my colleagues. The knowledge mine at our office has resulted in a far higher volume & income for me then earning a few extra percentage points on my split.

 

How many offices have a list of top brokers who will answer their phones at 10:30 on a weeknight or while vacationing abroad to help another broker work through a deal? This is huge for me. Ultimately, it gives me more tools to help my clients & my realtors & pays dividends down the road. Even years later, now that I’m established, there are still files every now & then that may be outside my normal realm of expertise. No one can specialize in all segments of the market (except maybe Rowan Smith… that hamster’s got legs). If a colleague helps me save 2 or 3 deals a year, it’s made up for a 5% difference in split.

 

For any new broker, the best advice I can give is to find a supportive office & don’t worry about your split. If you come into this business with money as your sole focus, chances are you are not going to be advising clients in terms of what is best for them. The income will come but you have to be in the right environment to learn & grow.

 

Saving deals, or learning how to be a top broker, is something that can be hard to quantify, while commission split is obviously an easy point of comparison. Just as clients looking for the rock-bottom lowest possible rate are probably setting themselves up for a big (and expensive) disappointment down the road, the same is true in this business with new brokers. The old saying of, “you get what you pay for,” is certainly true in this industry. Like most services, the cheapest (or the highest split) isn’t usually the best thing for you.

 

If you are a broker who is just breaking into the business, or one who has been at it a few years but wants to hit that next level, I would highly recommend keeping these points in mind & come talk to City Wide.

Top 5 Mistakes That Delay the Mortgage Process

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There are a lot of moving parts when you buy a home. Before you start looking with your realtor, you have to get a price range & pre-approval sorted out with your mortgage broker. Then once that’s all sorted & you’ve found a home, your money needs to be freed up & ready for the deposit, so you might need to speak with your financial adviser or tax adviser, or your family members if any of that down payment money is coming as a gift. Then, before closing you need to sort out your life insurance & your home insurance, and in the midst of getting ready for & coordinating that big move, you have to go in to see your lawyer/notary to sign a small tree’s worth of documents at some point before closing.

The last thing you need on your plate is any hiccups in the mortgage process. Here are the 5 most common mistakes that delay the mortgage process:

 

  1. Not sharing changes to the offer price with your lender

If issues come up in the home inspection that the seller drops the purchase price to account for, you need to let your lender know right away. Depending on what the issue is, the lender may need to have it rectified prior to you taking possession. If the bank doesn’t find out about this until they get a copy of the purchase contract from your lawyer a few days before possession, you could put yourself in a real pinch with only a short time until closing.

 

  1. Confusing approval with pre-approval

Nowadays, a pre-approval really just gives you a rate hold & a price range. Lenders don’t fully underwrite pre-approval submissions so it’s vital that you get an approval in writing prior to you removing your financing condition & committing to buy the property. Banks need to look at the whole picture, which includes your financial details AND the property details.

 

  1. Not disclosing where your down payment money is coming from

If a portion of your down payment is coming from a family member, or from a line of credit, let your mortgage broker know early on. It’s not uncommon for a client to say down payment is coming from their resources & then we find out that isn’t the case once we start collecting down payment documentation. Lenders want to know about this up front otherwise they will have to go back & get the file re-approved. In some cases, this could even put your approval in jeopardy.

 

  1. Not sharing details of your income or employment

If you recently changed your compensation plan (from salary to commission, or vice versa) or plan to change your employment, tell us right away. Lenders have the right to call your employer at any time before closing to verify your employment details & if something like that comes up late in the game, again, it can jeopardize your approval.

 

  1. Not providing all the required documentation

When you get a mortgage, the lender will need to see confirmation of certain details in your application (income, down payment, debts, etc). When I pre-approve my clients, they get a list of what documents will be required for mortgage approval. To make the transaction as smooth as possible, send those in right away. If the lender can get all of those documents up front, you can take a lot of stress & scrambling out of the picture.

 

Buying a come can be stressful enough. The last thing you need is fuel to that fire so make sure you are upfront with your team of professionals & on the ball in terms of getting them what they need early on.

If you would like to know more about how to ensure a smooth home buying process, contact me at ryan@citywidemortgage.ca.