VP on top priorities for new entrants to the profession
Agents and brokers who’ve joined Canada’s mortgage industry in recent years have seen something of a baptism of fire, marked by two huge shifts in the market.
The first was the housing boom from the onset of the COVID-19 pandemic, when slashed borrowing costs and Canadians’ pent-up savings resulted in a surge in homebuying interest and purchase volume shooting through the roof.
The second was the subsequent – and perhaps inevitable – cooldown, which saw the Bank of Canada attempt to pour cold water on a sizzling market by hiking interest rates throughout 2022 and 2023 as inflation began to spiral to worrying new heights.
Many would-be buyers stepped to the sidelines and shelved their purchasing plans as a result of those spiking borrowing costs, meaning new entrants to the agent and broker professions were presented with a tough market to carve out business opportunities last year.
For 2024, the outlook is slightly sunnier, with rate cuts expected to take place before long and a potential housing and mortgage market uptick in the cards for the second half of the year.
Still, it won’t be plain sailing – and there’s plenty that agents who are fresh to the industry need to be keeping top of mind throughout the year, according to Scott Wittrup (pictured top), regional vice president for the Greater Toronto Area (GTA) and Atlantic Canada at Invis Mortgage Intelligence.
Chief among those, he told Canadian Mortgage Professional, is the need to map out a clear and concise plan for the year that keeps them on top of every aspect of their business, with accountability a key focus for top brokers in 2024.
“Brokers that are coming into the industry should sit down and have a very strict business plan that they’re putting together and follow that to a tee,” Wittrup said. “Accountability is the number-one thing that brokers in their first year need to be worried about, especially now. They need to be sure they’re on top of all their other activities.
“The one thing I can tell them is just, ‘Do not get desperate, and do not make any big mistakes in the first year.’ Because that’ll dictate going forward, and it could even have you lose your license, too. So I want to make sure everyone’s ready to go out there.”
BMO chief economist Doug Porter said that the Bank of Canada’s rate increases throughout 2022 and 2023 would probably continue to stymy chances of a significant economic upswing.
— Canadian Mortgage Professional Magazine (@CMPmagazine) January 9, 2024
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Why accountability is key in 2024
Regulators are maintaining a strident focus on agent and broker conduct this year, meaning the onus is on all mortgage professionals – as ever – to make sure they’re carrying out comprehensive due diligence and staying on top of their business, Wittrup said.
“I don’t want anyone who’s going to be not informed, and not educated on how to move forward with a mortgage, or... doing privates with people they don’t know, or taking on any business without looking for it,” he said.
“Right now, banks and lenders will be very strict on what you’re sending them through the pipe. So you have to make sure that you’re doing your due diligence – but at the same time if you’re coming into the mortgage industry, make sure your business plan is ready for you. Make sure you know exactly where you’re going to find your clientele from – and make sure that you’re ready for this first year as kind of a tough year.”
Cooler market helps newer brokers find their bearings
While a move into the agent profession is still a potentially lucrative one, the dramatic shift undergone by the market since 2022 means agents and brokers can no longer simply sit back and watch as business flows in and purchase activity continues to climb.
Instead, a much more proactive approach is required, something that Wittrup said his team is making sure new agents and brokers are keenly aware of.
“Right now, bringing people on, our main goal is to make sure these brokers know exactly what they’re getting into, upfront of what this industry is going through,” he said. “And when we say, ‘Where’s your business plan? How are you planning on doing this? Here’s how we can help with marketing, let’s find common ground where you’re going to be comfortable for this year, and get you ready for that big 2025, 2026.”
One upside to the slower market at present is that it gives newer agents and brokers the opportunity to find their feet in a less hectic environment before a likely jump in activity at some point in the near future.
“You can’t expect to have a big amount of volume coming through the doors this year, but there’s going to be an uptick – so you’re in a good position to get ready for it,” Wittrup said. “Because you’re not going to jump into a market where it’s just absolute craziness, you’ll have some time to get your feet underneath before things get a little bit more intense.”
