All posts by Dave Gray

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Top 6 selling bloopers (and how to avoid them)

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Top 6 selling bloopers (and how to avoid them)

Sports bloopers are often about preventable errors that favour the other team. The classic is when players score against their own side. In the world of business, there are similar blunders – particularly during buying conversations with potential customers – that end up favoring the competition. As I explain in my seminars for sales teams, it’s not always a shortfall in your company’s product, price, or service that ruins a potential sale. Often it’s inadvertent comments that put customers off just enough for them to choose your competitor. Unfortunately, sales reps are usually unaware they commit these offenses so they keep repeating them. See if you or your team members ever make these top six selling gaffes.

1. Insulting their intelligence

Let’s assume that if a customer is in a position of authority in their company (meaning they are trusted to make significant buying decisions) they must be somewhat streetwise and smart. That means that any kind of pushy, manipulative sales approach is going to backfire. You need to enter a buying conversation presupposing that this customer is an intelligent, well-intentioned grown-up. Your comments should include a healthy dose of, “You probably already know….” and “At your level, you’ve likely experienced….

2. Not listening

Contrary to popular opinion, the most important part of a sales pitch is not your value proposition. The most important part of a pitch is demonstrating your understanding of that specific customer’s unique circumstances. That requires asking pointed questions that help customers see for themselves where there are opportunities for improvement. Then verify your understanding with statements like, “Sounds like you…[summarizing their situation].

3. Insulting the competition

If your potential customer is currently doing business with your competitor, it’s fine to compare your offerings, but be careful not to criticize the competition. After all, the customer decided to do business with them. So slamming the competition is tantamount to telling the customer that he or she made a bad choice. (See “Insulting Their Intelligence”).

4. Ignoring objections

If you propose a solution that ignores a customer’s objection or concern, you are essentially saying that you weren’t listening (see “Not Listening”). That requires being transparent in how your proposal either addresses their concerns, or it provides extra value that could outweigh their concerns. The key is we shouldn’t pretend we didn’t hear or value their initial objections.

5. Being a know-it-all

It takes time and effort to gain trust. Yet it’s so easy to lose. It happens when we stray out of our own area of expertise and claim to be an expert in politics, sports, raising kids, the weather, you name it. Ironically, one of the easiest ways to gain trust is to quickly admit ignorance about anything the customer seems to know a lot about. Showing respect by deferring to your customers’ knowledge and expertise helps them become more receptive to yours.

6. Ignoring the influencers

It’s easy to focus on the key decision-maker – presumably the economic buyer. After all, they are the people who will approve the payment. And yet by focusing on that “bag of money” we are inadvertently insulting the people who may have more say in the matter than anyone. The father of the bride may be paying the bill, but imagine the consequences of a wedding planner ignoring the wishes of the bride and her mother! (We all know the groom has no influence – he just needs to do what he’s told.) The lesson is no one should feel like they’re being ignored.

The bottom line

Effective selling has less to do with pushiness and manipulation, and more to do with good manners and respect. Talk less. Listen more. Allow your competitors to blunder their way out their customers’ good graces and send them into your capable hands. Here’s to you not dropping the ball.

This article is based on the bestselling book, Influence with Ease, by motivational speaker, Jeff Mowatt. For more information, visit JeffMowatt.com.

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How’s business?

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How’s business?

This is Jim’s Editor’s Note from the December 2018/January 2019 issue of Renovation Contractor, arriving in mailboxes in the next couple of weeks. If you’re not already a subscriber, sign up here for your free subscription. Or read the digital edition here.

Regular Renovation Contractor readers should be familiar with Will Gonell of Gonell Homes in Toronto. When the former New York City cop and U.S. marine decided to move to Canada, he got into contracting and quickly build a reputation for amazing work. He’s pictured on the cover of our Feb./March 2017 issue standing in front of an 18,000-sq.ft. home he’d built.

But in a recent conversation with our managing editor, Allan Britnell, he expressed some concerns about the current state of the industry. He’d recently had two clients pull the plug on projects – one after the permits had been pulled and the trades were all lined up and ready to go – because of uncertainty over the economy. But Will’s also well connected in the industry and has heard similar stories from many other contractors and builders that he knows.

The ongoing risk of a bigger trade war with the U.S., ever-increasing concerns about our housing bubble popping, and the recent downturn in stock markets are just a few factors that have some people concerned enough to tighten their purse strings.

Have you noticed any signs of a slowdown in your area? If so, what are you doing to adjust your business?

I’ve often wondered how some of the younger guys in the business who’ve never experienced a downturn and mass layoffs would cope with a recession hitting the renovation and homebuilding market. Back in the early 80s, getting laid off from my union job doing commercial HVAC work was what lead me to start my own business doing small renovations. It was growing when the next downturn hit in 1989 and I lost thousands on a spec home we were building that we ended up selling for what we’d paid for it.

Do you have the means to stick it out? Are you willing and able to switch gears to take on smaller projects to get by? Do you have a fallback plan? We love hearing from our readers so send your thoughts, concerns, and even the good news that you’re thriving to Allan (allan@renocontractor.ca) so he can compile them for an article in a future issue.

In our next issue, we’ll look at how one contractor turned to a business coach to help his business grow. When we first profiled Don Vloet of Dun For You Contracting in Welland, Ont., back in our Jan./Feb. 2014 issue he was running a small, successful business, but he wasn’t exactly thriving, working mostly on small kitchen and bathroom renos. At the time he said, “I’d like to grow more. I’m trying to let go of some control, and getting more into management.”

A regular attendee of our Renovators’ Roundtable events, in 2016 he met the team from Breakthrough Academy (BTA) and signed up for the program. Long-time contributor Diane Peters will speak to Don to find out how BTAs systems have help his business grow and, hopefully, ride out whatever the economy throws at him.

 

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KiWi Condos – how cool is that?

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KiWi Condos – how cool is that?

An iconic 14 Storey Condo is coming to 212 King William in the heart of Hamilton’s Urban Art scene.

King William is where you want to be. KiWi is cool. And you get it. This is a place where people and ideas come together. New possibilities. New thinking. Urban style. KiWi is the essence of the King William district. How cool is that?

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Renovation Contractor – Dec/Jan 2019

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Renovation Contractor – Dec/Jan 2019

Renovation Contractor is a trusted trade publication written by and for Canada’s small to medium-sized home renovators.

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GTA moving into balanced market for 2019

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GTA moving into balanced market for 2019

Although the Greater Toronto Area housing market is somewhat in balanced territory, buyers and sellers are both up against the ropes.

This year has changed so much from the last five to 10 years. Both buyers and sellers have been affected in both positive and negative ways. For me, when working with a buyer and investor client, it was always a tailored approach. However, now more than ever, we have to be extremely diligent when analyzing residential types, location and price range.

In past years, it was much more common to think about flipping real estate or short-term investments. Now? Not so much. There is a total shift to a minimum five- to 10-year hold. Since the introduction of the stress test, some real estate markets took a hit. Buyers are also now faced with additional challenges such as qualification rules and rising interest rates.

Glass half full

Although there are pros and cons in today’s market, take a glass half full approach. Just think, in the past, is was very challenging for a seller to move up to a bigger property. There were bidding wars, price increases that exceeded pay raises, and to top it all off, extremely low inventory – which meant buyers might have to settle for something they might not fully love. The trade-off was a low interest rate environment. If you were a seller, it was nice to think you could sell your property for top dollar, but the million-dollar question was where will you buy next?

Also read: GTA home prices continue to rise

Also read: GTA new home market gains further momentum in October

Also read: GTA condo sales and prices hit record levels

Today, if a seller wants to move up, they can usually find a good deal and sell their property for a fair market value. Maybe your property went down 10 to 15 per cent, however, you are also buying your next home for the same 10 to 15 per cent less. Another benefit to such market conditions is that there are more deals to be had.

Notably, there have been fewer first-time buyers out there recently. Even a larger down payment might not cut it anymore, due to higher interest rates. This is why the condo market is doing well, especially the smaller and less expensive properties, due to affordability. The new reality could well be more people renting for a longer period.

Rising rates

The qualifying rate today is slightly more than six per cent. “The recent rule change with regards to the stress test basically decreased people’s max mortgage amount by about 15 to 20 per cent,” says Michael Yosher, director of lending at Integrity Tree Solutions Inc. “The 2019 horizon looks like this trend will continue, as Bank of Canada and economists are predicting several interest rate hikes, which will further reduce the amount of mortgage a buyer will qualify for. This has really taken the wind out of first-time buyers. Family members helping out with gifted down payments and cosigning mortgage loans are the trend these days.”

According to the Toronto Real Estate Board, in October 2018 compared to last year October, average sales prices were up 3.5 per cent. Although this is good news for some sellers, most of this price growth is driven by the condominium market, which at one point lagged behind detached, semi-detached and townhouse product.

Arie Buzilo is a real estate broker with Century 21 Leading Edge Realty Inc. Brokerage, and an investor specializing in buying and selling properties in the GTA.

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Don’t forget about these winter window maintenance tasks

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Don’t forget about these winter window maintenance tasks

As home heating costs continue to rise, saving money and conserving the home’s warm air has become a top priority for many Canadian homeowners. That’s why it’s essential to take time to maintain your windows this winter, since drafty windows can account for up to 40% of a home’s heat loss. Here are a few tips on how to keep the heat in.

Check for Leaks

The best way to prevent heat from sneaking out the window is by checking the windows in your home for any leaks. An easy way to do this is with a smoldering incense stick. Light the incense and hold it close to each window. If the smoke is being pushed away from the window, there’s a good chance that you might have a leak.

You also want to check the caulking along the frame since it can dry out and gap.

Insulate your Windows

Winter insulation is a good idea for homes in most cold weather climates. It keeps home interiors comfortable and home heating bills low. Two easy ways to keep the warm air inside are with window insulation film and thermal curtains.

Window Insulation Film

Window insulation film is often available as part of a kit, which contains double-sided tape and a large sheet of insulating film. The tape it affixed to the window frame and then the film is applied to it. Next, a hair dryer is used to tighten the film by shrinking it into place.

Thermal Curtains

Thermal window curtains are an easy, affordable way to provide extra insulation. Sometimes called cold-blocking curtains, these energy-conserving window coverings are either double or triple layered and may also be coated on one side with an acrylic foam. Some options are available layered and backed by a thick, insulating layer.

Replace the Windows

Sometimes the best solution for a drafty home is to replace your windows. Leaky windows can not only elevate your home heating bill but can lead to additional problems like allergens getting into the home, and condensation, which can lead to mold, mildew and damage to surrounding wood.

Newer, more energy-efficient double and triple glazed models can be filled with inert gas which provides further insulation. They will help you enjoy a more comfortable home and lower your energy bills as well.

*Article courtesy of EiEiHome

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Are you covered for weather damage to your home?

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Are you covered for weather damage to your home?

Under the Ontario New Home Warranties Plan Act, warranties do not apply to damage resulting from an act of God

These days the news is full of reports of extreme weather, both here at home and around the world. This past summer we had strong winds, heavy rainfall and even tornadoes – and it’s hard to know what weather surprises the winter may hold.

When extreme weather happens, it’s not unusual for homeowners and builders alike to call Tarion asking whether storm-related damage is covered under the warranty plan or is considered an “act of God” and excluded from coverage.

Under the Ontario New Home Warranties Plan Act, warranties do not apply to damage resulting from an act of God. An act of God is a natural event that is unexpected and unavoidable and causes damage that is beyond the control of the builder. Examples include tornadoes, earthquakes and extreme winds.

New homes that are designed and built to Ontario Building Code standards are expected to withstand Ontario’s normal weather conditions – like ice, snow, high winds and heavy rains. This means that the act of God exclusion only applies to extraordinary occurrences or conditions of nature that could not have been reasonably foreseen or guarded against.

For example, a high wind is not an act of God unless it is of such exceptional strength that no builder in Ontario could be reasonably expected to anticipate its force.

So where does that leave you if you’re a new homeowner whose home has been damaged by an ice storm, heavy snowfall or high winds? You should contact your builder, who in turn should inspect the damage to determine if warranty coverage applies. If it’s not covered, you may be able to make a claim for it under your home insurance.

If a homeowner reports damage after a weather event and the builder believes the act of God exclusion applies, the onus is on the builder to prove it. For example, if roof shingles on a newly built home flew off on a windy day, the builder would be required to replace the shingles unless the builder can prove the shingles were installed properly and became detached only because there was an extraordinary wind.

As we contend with Mother Nature’s extremes, what constitutes normal Ontario weather may change and so may the requirements for building homes to withstand it.

In the meantime, if you have questions about your warranty coverage or the act of God exclusion, you can contact Tarion.

Howard Bogach is president and CEO of the Tarion Warranty Corp.

Tarion.com

Facebook.com/TarionWarrantyCorp

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Affordability Is A Challenge

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Affordability Is A Challenge

Housing supply is not rising in response to increased demand

Every fall, BILD invites experts on economics and housing to join us for breakfast and speak to our members about what the GTA housing market will look like in the coming year. This fall was no exception and I was heartened by much of what I heard about current and future trends from Patricia Arsenault of Altus Group and Dana Senagama of the Canada Mortgage and Housing Corporation (CMHC). I also saw we have much left to do around housing supply and affordability in our region.

There’s no doubt we have a lot to look forward to in the GTA. Economic conditions are expected to be solid in the short term, with the employment growth rate projected to be 1.8 per cent in 2019, according to Arsenault, who is Altus Group’s executive vice president, data solutions.

More GTA households than last year are planning renovations of over $5,000 in the next year, and the percentage of GTA households that currently rent but plan to buy a home in the next year has rebounded after softening last summer, according to Altus Group’s survey.

But these survey results only indicate what homeowners and potential new homebuyers intend to do, not what they are ultimately able to do, and Arsenault noted that households may take longer to save for that first home in the face of new mortgage hurdles and housing affordability challenges. The prices of condo apartments, which used to offer potential homebuyers a more affordable choice than single-family homes, have been rising, reducing the advantage of this option. In September, the benchmark price of new condo apartments was $789,643 and the benchmark price of new single-family homes at $1,119,533.

Despite rapid price gains in both ownership and rental markets, the supply response has been weak or inelastic, said Senagama, who is CMHC’s manager of market analysis. That means our housing supply is not rising in response to increased demand for housing and the corresponding increase in the prices of homes, as the law of supply and demand would lead us to expect. In fact, Senagama showed that Toronto is one of the markets in Canada that are not at the risk of overbuilding.

I was not surprised to hear this. BILD has consistently delivered the same message. We have said that we are not building enough housing to accommodate the 115,000 new residents who are arriving in our region every year. We should be building 50,000 homes every year, and last year we only built 38,000. A big reason for this supply shortfall is the lengthy development process that housing projects face in the GTA, slowed down by outdated regulation and red tape.

We should be updating zoning bylaws and official plans and streamlining the list of conditions for municipal approvals, so that we can build the housing our growing region needs. Only then will potential homebuyers be able to afford to make their dream of owning a home a reality.

Dave Wilkes is president and CEO of BILD (Building Industry and Land Development Association), and can be found on: Twitter.com/BILDGTA) Facebook.com/BILDGTA YouTube.com/BILDGTA and BILD’s official online blog: BILDBlogs.ca

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Don’t Doubt The Market

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Don’t Doubt The Market

There is no shortage of demand at the launches of new projects

The GTA housing market is as robust as ever and things have been humming along quite nicely for many years now.

And yet there will always be those who believe we are doomed, that the good times cannot continue for the GTA’s hot housing market — that it’s no doubt headed for an inevitable crash.

Well, that’s just not the sentiment we’re seeing at In2ition Realty as we’ve launched a series of successful projects across the region in recent weeks.

There was certainly no shortage of demand at the launch this summer of the first tower at Universal City, a Chestnut Hill Developments master-planned community in Pickering. The project enjoys lake views and is located just minutes from the GO Transit station. It sold out in record time and a second tower of 324 units just launched last month. The interest for tower two was equally as strong.

In Port Credit, on the other side of the GTA, it was the same story with the recent launch of Tanu Condos, a 204-unit tower and townhouse project by Edenshaw Developments. We had a lineup on the first day of launch!

Truth be told, Toronto condo builders can’t launch developments quickly enough to satisfy the insatiable demand.

It wasn’t all smooth sailing for the GTA housing market in 2018, mind you. The introduction of a new stress test on mortgage applicants certainly had an impact on home sales, sidelining some buyers.

And the GTA housing market faces considerable ongoing challenges, including trade labour shortages, development approval process and timing, project cost escalation, ability to secure financing, profit margins, land availability and cost … there are tons of hurdles for the building industry to contend with.

Although sales figures are down 40 per cent from last year, a portion is from lack of supply. In 2017 we saw 128 launches in highrise condos versus 56 in 2018.

The Toronto Real Estate Board (TREB) reported a 6 per cent uptick in regional home sales in October 2018, compared to the same month a year earlier. And the average sale price of a detached home in the GTA last month was up 3.5 per cent on a year-overyear basis, to $807,340. The average sale price for a condo in Toronto was $603,153, compared to $461,013 in the 905.

Renovation spending is also at an all-time high: $12.3 billion was spent on home alterations and improvements in Ontario in the first half of 2018, according to Altus Group.

Homebuying intentions are up, as well, despite affordability and qualifying challenges. An Altus Group survey of current homeowners and current renters showed that most GTA households are saying yes, they plan to buy a home in the next year or so.

The evidence doesn’t lie. Households and investors alike see the GTA housing market as a quality long-term investment. And why shouldn’t they? A thriving and diverse regional economy and a steady stream of 100,000-plus new arrivals in the GTA each year — more migration than any other city in Canada — will keep this market strong for years to come.

Debbie Cosic, CEO and founder of In2ition Realty, has worked in all facets of the real estate industry for over 25 years.

In2ition.ca

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Condominium Cancellations: Why All The Fuss?

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Condominium Cancellations: Why All The Fuss?

There has been much talk in the press this year regarding some high-profile condominium cancellations. One of the most high profile of the cancellations was the 1,200-suite three-building project Cosmo by Liberty Developments, which left purchasers scrambling to find equivalent units in the current marketplace. Overall, for 2017 until June 30, 2018, Altus Group reports 17 projects were cancelled for a total of 3,627 units.

The reality is that over the last seven years, an average of 17 per cent of proposed units have been cancelled for a variety of reasons. The number of units cancelled this year is in line with the average.

In the past, however, most of the projects that have been cancelled due to their uneconomic viability resulting in a lack of financing, a lack of sales or delays in municipal approvals. It should be noted that builders are extremely limited under the current Tarion regimen and have few termination rights (other than purchaser default). These include: (1) lack of specified government approvals; (2) lack of a specified number of presales; (3) unavailability of satisfactory financing; and (4) failure of the purchaser to provide evidence of finance ability. All need a specific outside date to satisfy the applicable condition which simply cannot be later than the outside date under the Tarion rules, as selected by the builder.

Many of the more recent cancellations are not due to lack of sales, but rather a lack of financing and the underlying reasons are usually delays in municipal approvals and escalating costs as a result of these delays.

The public and the press have speculated that the real reason behind these cancellations is so that the builder can resell these units at current and significantly higher prices. The actual reality is far from this conjecture.

The last thing that builders want to do is cancel a project. It reflects on their credibility and reputation both with purchasers, trades and Tarion. Projects are only cancelled within the limited termination rights that builders have under the purchase agreement and only as a last resort. The cost of cancelling a project can be significant in terms of lost marketing fees, real estate commissions and the additional carrying cost of the lands.

One of the real culprits in these unfortunate cancellations is the ever growing red tape and delays in obtaining government approvals. These can include anything from actual rezoning and official plan amendments, site plan approvals and signoffs by various departments to permit the issuance of building permits. As a result of these delays, carrying costs mount, construction costs continue to escalate while the developer is prevented from signing up his construction contracts without having a firm construction start date. And to add salt to the wound, the municipality itself creates extra costs by raising its development charges, park levies, planning fees and building permit fees while the builder waits for his approvals to come through.

The most recent example of this was the significant increase on November 1, 2018, of Toronto development charges on all projects. Avoiding the increase requires payment only when full building permits have been issued. Numerous projects had completed their submissions and were awaiting their building permits, which, in many cases, were delayed by the city beyond November 1, 2018. This alone has resulted in significant increases in DCs that may or may not be passed on to the purchaser. At the end of the day, every development needs to make a reasonable return. Banks will simply not finance projects where this return is not evident and, without bank financing, the projects simply cannot be built. The provincial government has recently asked for input from Tarion and the residential building industry as to the causes of the condominium cancellations and what can be done to best protect purchasers from the unfortunate results of a condominium cancellation.

The reality is that purchasers buy into projects at a very early stage, many even before full approvals are available, on the basis that they are getting in at the ground floor at a lower price. The downside of getting in early is that there is a higher risk of a project cancellation if the approvals do not come through or costs change materially such that financing is not available. Those purchasers that do not want to be exposed to those risks can simply wait to purchase a project at a later stage of the development, i.e. when approvals are in place, or when construction has commenced, or even when construction has been substantially completed so that they can plan their move-in timeframe.

There are certainly other tweaks that can be made to the process to ensure transparency and fairness. Payment of some interest to purchasers on deposits above the currently low statutory rate, and disclosure to Tarion of the underlying economic reasons as to the lack of financing by an independent cost consultant, could be considered.

At the end of the day, the real key in this environment is to properly educate consumers as to the risks of buying projects from plans. The problem with most new condo buyers is that they do not read the documentation or pay their lawyers to do so, other than the price and the adjustment clause. The solution is really to educate consumers as to these risks, no different from the risks of investing in the stock market or mortgages, or any other type of purchase or investment. Consumers need to go in with their eyes open.

Leor Margulies is a partner at Robins Appleby LLP.

https://www.robinsappleby.com/

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