This document is a transcript of one of the most timeless and powerful calls I've done in 5 years of teaching these concepts. It was done with Tom Cook and Garry Klassen, Canadian Mastery members. While 5% of the call refers to Canada laws, every single strategy is enormously powerful for use in the United States. If you have any doubt as to the validity of using zero down payment in any market, or to market any listing, you must read this. It will change your business.

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Terry: Hi, everybody, this is Terry Hunefeld. Hello, Tom Cook.

Tom: Hi there!

Terry: Hello, Garry Klassen

Garry: Good morning!

Terry: Welcome everybody to our Canada Creative Financing call. In the 60 to 90 minutes of this call we will really open up some new worlds of opportunity for you in Canada. We're going to talk today a lot about lead generating, and getting people to call you and see you as somebody completely different than a real estate salesperson.

Terry: Just because we go to the Main Event or just because we're members of the University and we adopt the philosophy of super-servant and adopt the philosophy of consultant versus salesperson doesn't mean that consumers recognize us as that way. When we're lead generating, we're trying to bring new clients into our funnel. The question is how do we get people to see us different from common real estate sales people? Joe calls it a unique service offer. You've got to have a unique service offer. What is different about you, than about all the other real estate salespeople or lenders out there?

Here's the key. When you obtain specialized knowledge, it becomes easy to position yourself as totally unique, which gives you value and puts you in high demand. When we do things the same way everybody else is doing it, when our ads look like everybody else's ads, when we say everything the same way everybody else is saying it, we become a commodity. We're generic. We're vanilla. The consumers see no difference between us and anybody else, so why should they use us? And if we cannot articulate to our consumers, to our prospects why they should use us over and above anybody else, other than "I'm better, I'm a more producer," if we can't give them real, logical, valid, sound, believable reasons why they can benefit from working with us, they're not going to work with us.

So the purpose of this talk today, you'll hear Garry and Tom and I dialoguing about ways that you can reposition yourself from that of a salesperson to one of a respected, knowledgeable consultant – a professional – right on a par with doctors and accountants and attorneys. The way you do it is by presenting yourself as having things that consumers want, and that they perceive and believe can make their lives better. That's called a "unique service offer," and that's the basis of marketing. You have to have an offer for people that they go, "Wow! I want to know more about this!"

Now, there are all different kinds of unique service offers. Today, we're going to focus on one. I've been testing it in Grand Rapids, Michigan since 1984. In 1995, I wrote a system called "Gold Rush," and I began marketing an information kit for $1,000 to people all over North America, to Realtors and lenders. And I began working with them, and I began seeing it work and helping implement these systems all across the country. So it's working now in Canada for members like Tom Cook and Simon Giannini, it's working all over the U.S.

What we've done is we've tested many different USOs and we've tested my premises based on my 12 years of experience. We've found validity in the fact that nothing – nothing – is easier, quicker and faster at getting people to call you than being able to offer unusual financing terms. Buyers love it because they go, "Wow! I never knew I could buy a home for zero down or for very low down!" We think that everybody knows, for instance in Canada, they can buy for 5 percent down. In America, we think everybody knows they can buy FHA for 3 percent down. They don't.

Our industry has done a very poor job of educating the public as to what their options are. So the minute you begin educating the public as to what their options are and let them know that you have those options and use pre-emptive positioning to put that message out there in a way that looks like you're completely different than everybody else, they will flock to you. So that's what we're going to talk about today. I have with me on the call Garry Klassen. Garry is a Realtor with Re/Max in Mississauga?

Garry: Mississauga, yeah.

Terry: And Tom Cook is a member of the Coaching Club and a Mastery member from the Toronto area. As soon as I became affiliated with the University, every time we were at a Mastery session together or a Main Event together, Tom grabs me. We wind up having a breakfast and brainstorming. He's a real student and become a master of lead generation. He'll even be teaching some classes at our next Mastery session in Atlanta.

Garry is a Realtor, he has an extensive financial background, and he actually gives classes to lenders throughout Canada. He teaches lenders in Canada how to do financing. I guess maybe that's where we can start the call and just start our conversation, gentlemen, by maybe talking, Garry, about your experience in talking with lenders and the boxes people put themselves into and paradigm shifts and things like that is. Where we have to start this conversation from.

Garry: I think that's a good place to start, Terry. I used to live in Vancouver many, many years ago, when I was rather young. I guess I was about 13. It was 1954, and we had a rather interesting exercise happening in Vancouver that year, and it was the British empire games. It was a young man from England who proved to the world that year that the reality that they had thought was correct was not. I guess what we're talking about here is the difference between perception and reality. That's an old saw, but it's something that I think really affects the topic that we're talking about here.

Garry: A lot of people don't know that you can sell a house with zero down. They believe you can't. Even a lot of Realtors believe you can't. And even more, a lot of lenders believe you can't do it legitimately. And so, this topic of perception of reality is important. Roger Banister, of course, went down in history books as being the first man to break the 4-minute mile. I think we are all probably familiar with his name.

But the thing, Terry, that I find is rather interesting about Roger's story is that within the next 6 months, 21 or 22 other runners broke the 4-minute mile too. In other words, once we understood that the 4-minute mile could be broken, then it became a possibility for a lot of people. I think that's the kind of thing that we need to talk about just a little bit in starting off this topic, is that the biggest problem that you have to surmount, really, is getting yourself out of your own comfort zone.

When I advertise buying a home with as little as zero down, it's quite common that I'll get a call from a bank mortgage officer or a lender, and they'll say, "Garry, how do you do this? You're advertising 6 bank approved ways to buy a home with as little as zero down. At our bank, I don't think we do that." So we'll talk about a number of things and they'll say, "Well, oh yeah, we could do that, I guess. I just never really thought about it."

I think one of the problems that we're dealing with, I think Tom would agree, is that mortgage officers at banks and trust companies are raised with the idea that they're going to be using high ratio financing, the CMAC insured high ratio financing whenever somebody has less than 25 percent down. Of course as we all know, we can use 5 percent down now in Canada with any buyer. That program has been opened up. So all the lenders are familiar with doing with 5 percent down, but they just don't think past that. They think in terms of the bank rules and the bank act under which the banks have to operate, and legitimately so. They think in terms of CMAC rules.

Canada Mortgage and Housing says, "Look. If we're going to insure the loan that you're going to borrow from the bank, then we insist as part of our policy that you have 5 percent down, and that you can show that as being your own money." That's a good rule, and CMAC is welcome to have that rule. But the point is there are a lot of other ways to finance a property for over 75 percent without involving CMAC, to start off with. So there are ways that that rule can be not broken, but gotten around quite legitimately, and that are open to every Realtor.

Terry: So the banks, the bankers, are putting themselves into a CMAC box. They're saying that, "Well, if they have less than 25 percent down, then it's got to be CMAC. And CMAC rules are this." And they stop there, and they don't even stop to think, "Well, what if we didn't go through CMHC?" And that's what we're going to talk about today.

Garry: Exactly. Now, for example, I think, and let me say this to those who are listening in on the call, that if you have just one way that you understand that a property might be financed with zero down, then it would be quite legitimate for you to advertise that a property could be bought that way. In other words, you don't have to understand 8 or 10 ways, and there are probably 143 different ways of doing it, you don't have to understand all of those. All you need is really one to say, "Well, this property could be bought with little or zero down," because you could apply that one system that you understand.

Of course, once you start working with this topic, you start getting into other ways and you understand more and more and more ways to do it. There are at least 7 or 8 ways that are really quite simple and that everybody understands. One of the things, Terry, that I find is a really interesting thing to be able to point out to buyers, is that if I can qualify them to buy with zero down, then they can buy virtually any property with zero down. It doesn't have to be the property particularly that I'm advertising. And that really opens it up, you see, because the zero down financing isn't tied to a particular property. It's really tied to the buyer.

And to the buyer's situation. The point of any advertising is to make the phone ring. And the point of the phone ringing is to make an appointment. The point of the appointment is to get them in the office, obviously, and talk business, and sign them up as a buyer and do business with them. If calling on a zero down deal is what makes them call, then your first goal has been achieved.

Terry: Yes. Of course.

Garry: And then second thing is to get them in the office and say, "Okay, now let's talk about buying a house with zero down. There are a number of ways that you can talk to individual buyers and say, "Okay, let's try this on for size. Will this work for you? And what about that? What about this?" And really, you match the system to the buyer. It's not a matter of matching the system to the house. And that really leaves you wide open, because you can then sell them any house that works for them. And that's, of course, what we want to do for our buyers is help them find a house that really suits them best.

Terry: Garry, what I have, of course in the Members Only Resource Exchange, is a number of scripts to where that automatically position you as someone with knowledge that the buyer says, "Hokey Pete! I had no idea all these options were available to me." So the secret here is to use a simple ad to generate a lead into a hotline, which will reshape the paradigm and open up a whole new world of opportunity to the listener, who then calls you and says, "Tell me more about this." Then, of course, you say, "There are a lot of different ways" or "I know a number of different ways. I really need to have you stop in the office." It's just a 1-2-3 baby step sequence.

There's the key. As you were saying, too, about there's no law that I know of in Canada or the U.S. that says that Realtors must only advertise their listings. There's no law that says that Realtors and lenders can't advertise their services. The way we go about advertising our services is we shout at consumers about what we want them to know about us. "We're #1!" "We have service." "We have trust." "We have integrity." "I'm a million dollar producer." All the stuff that consumers couldn't care less about.

What consumers really want is they want to know what their financing options are. So small lead-generating ads saying, "Lovely homes, zero down payment, quiet streets, free recorded message" will create tons of leads coming into your funnel and listening to your hotline. And then they're going to call you and say, "Well, Garry, tell me more about these zero down payment plans that you have. How does that stuff work?" They're open and they're asking, and you are now being treated as a consultant. You've differentiated yourself from salesperson. So when they call you up and say that, "Garry, tell me more about these loans," what do you say?

Garry: Basically, what I say is, "What we need to do is to have you come in, and let's sit down in the comfort of my office where I have all my equipment, computers and whatever, and let's go through what your needs and wants are. And let's decide what is the best way for you to buy a home. One of the many ways that you can buy a house with as little as zero down, no doubt will fit your scenario. Let's sit down at your convenience in the office. And we'll come up with a way to help you to buy a home."

Terry: Okay. Tom, how do you handle that call when they call you and inquire about your zero down or low down payment plans?

Tom: Pretty well exactly the same way. We've got what we call a "mortgage pre-approval quick qualifier form." We ask them for a fax number. We fax it out to them, and we ask them to fill that in and maybe a buyer wish list before they come in for the buyer consultation. That does 2 things: 1) it saves a lot of time at the buyer consultation from taking that information down, but secondly, it allows Sally to do all the preliminary work. She can work out some of the options available for the buyer. She can know a bit more about what they're looking for and what neighborhoods, and maybe pull up some listings in advance even. So it's setting them all up to do things ahead of time, and for them to know that there's big value when they come in for that buyer consultation.

Garry: That's very similar to what I do, too, Tom. I use the form pre-qualifier. It sounds like we have a very similar form. It would be interesting to compare them. I wonder, Terry, if it might be useful at this point to just maybe go down 2 or 3 or 4 of the simple ways that you can buy a home with zero down that are bank approved, that any bank lender, once they understand what you're doing, will accept and will go along with.

Terry: I would love to hear them. Let's go right into them.

Garry: Okay. Here's number 1, and this is a very, very simple system. It will work virtually with any buyer. That is to say, first of all, we will put a bank-approved mortgage for 75 percent of the approved lending value against the property. We will then put a second mortgage, which the bank knows about. By the way here, we're not hiding any of these things. We're not talking about putting on hidden second or third mortgages or loans that people don't know about and don't know qualify for and all of those things. Understand that all the systems we're talking about here fit within the GDS and TDS ratios that we all are familiar with and that we want to work with.

Tom: Garry, so you're going into the bank and you're showing the banker what you're going to do.

Garry: Absolutely.

Terry: Okay, great.

Garry: Let me summarize there again. But 75 percent against the house, and then we put on a second mortgage for perhaps 14 or 15 percent. And then we arrange a private loan or a bank loan for the balance. Now you add up those figures. You've got 75 percent first mortgage, 15 percent second mortgage, 10 percent loan. That adds up to 100 percent. The bank will allow you to do that, once they understand that that system does not break their own rules. But I'll tell you this, I've gone into loan officers and I've said, "This is what we want to do," and they say, "well, that's against the rules." I said, "Well, check your rules." And the bank loan officer will do that they'll say, "Gosh, I can't find it anywhere in the rules that says you can't do that. But I won't do it, because I know it's got to be wrong. It sounds too simple."

Garry: In other words, they're so brainwashed into the idea that you have to have at least 5 percent down and you have to use high ratio financing to do it, that they can't get their mind out of the box. Joe talks about boxes and how we box ourselves in. This is the whole perception and reality thing all over again. And the first time that I did this, I had a bank loan… actually a bank manager from CIBC call me. This had to be about 15 years ago. He said, "Garry, we've had a chap who's just paid off his Volvo station wagon and he's good for a personal loan from the bank." He said, "I'm going to loan him enough to buy a house. Do you think you could find him a house and maybe have the vendor take back a second mortgage?" He said, "I'll give him a first mortgage for 75 percent and the 10 percent down." And then he said, "If you can arrange a 15 percent vendor take-back, then you've just put together a deal." And that's exactly what we did. We did it inside of a couple of day and sold him a house.

That's a very, very simple way of doing it. What we do is have one bank loan them the down payment, and we'll have a second bank loan them the first mortgage.

Terry: But all the bankers know what all the other bankers are doing?

Garry: Of course. It's all up front. It's all in the wide open. And the buyer, further more, must qualify under the normal GDS, TDS ratios to do it.

Tom: Including his loan payment and so on.

Garry: Absolutely.

Tom: Exactly.

Garry: I would say the second system, Tom, I think it's one that you've used a fair amount, and that's the gift.

Tom: Absolutely. All the time.

Garry: This is a legitimate gift. This is not a private loan to be paid back. This is a legitimate gift. It might be coming from parents. It could be coming from a rich uncle. Who knows. But a legitimate gift for a down payment. And in this case, you can use the high ratio financing 5 percent down. If you can get a legitimate gift for 5 percent given to the buyer, then you can buy with 95 percent financing.

Better yet today, let the gift be 10 percent, rather than 5 percent. The reason for that is the cost of the 5 percent down high ratio insurance has now just jumped up to 3¾ percent, and that's pretty expensive. If you have 10 percent down, that's only 2½ percent, Tom. Is that right?

Tom: That's right.

Terry: Tom, can you go through that map with us in Realtor lingo, so that we can all pick up on that? How 10 percent changed to 2½ percent?

Tom: CMHC rules say that if you're borrowing up to 95 percent down, they charge a premium of 3.75 percent of the entire mortgage, which they add on to the mortgage as their mortgage insurance. And that, again, protects the lender against default. It doesn't protect the buyer in any way, shape or form. So that's quite expensive. But if you have 10 percent down, then that fee, that insurance premium, drops to 2.5 percent, which is what it used to be in the old days. It's a 1¼ percent savings, which is a pretty good chunk. So if you come up with an extra, let's say on a $150,000, $7,500, you're going to save $1,500 to $2,500.

Terry: So in essence, all the buyer needs is the 2½ percent, you call that a mortgage insurance premium in Canada?

Tom: Yes.

Terry: So they're getting a 90 percent first, a 10 percent gift, and the buyer comes up with his own 2½ percent and boom, he's in a house?

Tom: No.

Garry: Actually, the 2½ percent is added to the mortgage principle, so they don't have to come up with that.

Tom: So you could pay it, but nobody ever does. They always add it on to the mortgage.

Terry: So the buyer's effectively in again for zero down?

Tom: That's correct, yeah.

Garry: Not only that, but under CMHC rules, kind of a little-known fact, but it is right in the rule book, they're allowed to borrow their closing costs. So let's say they buy a $200,000 house, and they put $10,000 down. A gift from parents. So now they've put down 5 percent. They can borrow their $5,000, $6,000 or $7,000 closing costs if need be. That's within the rules of CMHC. They don't have to have the cash for that.

Terry: So they can borrow them from a different lender or do they add it to the mortgage?

Garry: Well, they can borrow it from the bank or borrow it from wherever. Maybe they have a line of credit that would work.

Host: Or a credit card.

Garry: Even a credit card, if necessary.

Terry: Okay. And of course, the amount that they would have to allocate to repay that loan would go against their ratios.

Garry: Of course.

Terry: We live in a consumer style culture. There are lots of people driving BMW's, Mercedes Benz's and Volvo's, that are living high lifestyles. They're knocking down good money. Yuppies, we call them. Right? And they're making a lot of money, but they're spending every penny. Now, they have excellent credit, wonderful job employment, high incomes, but they have no cash. These are the people we're talking for $200,000 and $300,000 transactions, aren't we?

Garry: That's right. And I think it includes what we call DINKS. I don't know whether you've heard that term before. That's DINKS. That's "Double Income, No Kids."

Terry: Yep. There's a lot. Even the yuppies with a child or two in daycare. One of the spouses don't want to stop their careers, so they continue on in their dual careers, high income, and they're saying, "Gosh, this apartment that was great for our single's or young married's lifestyle, now that we have children, we need a house. But our perception is we need 10 percent or at least 5 percent down, plus closing costs. Our perception is we need 20,000, 30,000 bucks. In reality, the minute you put an ad in front of them that says, "No, you can buy one of these homes for zero down, they go, "How do you do that?"

Tom: That's right.

Terry: Bingo. That's called "lead generating."

Garry: And the interesting thing too, Terry, is that very often, they don't need to buy with zero down. It's simply the fact that you understand something that is different than what most Realtors do, and you've taken the time to learn how to use it and to advertise it that sets you apart from the rest. That's been my experience.

For example, just 3 weeks ago, we had a couple young ladies come in to buy a home. They were attracted to the idea of buying on a rent-to-buy basis. And that's one of the ways that you could set it up is that people rent the home for a little while, and then you have the owner of the house apply the rent for a period of time as the down payment. And then they just finance it in the normal way. You can do that. You'll see all sorts of situations around from time to time where you can do that sort of thing.

These 2 ladies came in and wanted to buy this way. I said, "Okay, why is it that you wanted to buy this way?" "Well, gosh, we're just not sure where we want to be." I said, "Do you really want to restrict yourself to properties that could be bought that way, because that is a system that's restricted to a particular property." And they said, "Well, gosh, no. We'd really like to have a choice of what's available in the marketplace to buy." And I said, "Okay, let's talk about it a bit. What have you got to work with as a down payment if you bought the normal way?" "Well, we saved up about $125,000. Would that be enough?"

Now, the point simply being that they were attracted to a rent-to-buy, but they had $125,000 down payment.

Terry: Yeah.

Garry: Don't let this surprise you. When you start to advertise zero down, don't be surprised if you never actually use it.

Terry: I can give you an example, too. I know that Tom will have some for us. My example is the first time I heard about By Referral Only was when a lender in Grand Rapids named Mike Alkema, who's a Coaching Club and Mastery member now, called me and said, "Terry, I see you're doing a lot of unique and creative stuff. Is there any way I can help you?" I said, "No, I have a couple of lenders now I'm happy with." He said, "Well, I want to serve you." Woah! No lender ever said that to me before. He said, "I really want to make your job easier. What can I do to just get one transaction, to do one thing, to show you my super-servant philosophy?" I said, "Go out and find me some unique, creative loan offer that I can offer that nobody's ever heard of before."

Mike, instead of just saying, "Oh yeah, right," he went and he researched, beat the bushes, came up with a federal program that nobody knew about. Back then, it was called the Farmers Home Rural Development Loan. At that time, 4 or 5 years ago, nobody knew about it. I began advertising zero down homes in the country. "Lovely homes in the country for zero down payment with acreage," and I'm telling you, my funnel filled up with leads. But here's what's interesting. I did $78,000 in commission before it expired with Mike. $78,000 came to me in commissions. I don't know how many transactions that was. I think it was around 16 or 17.

Here's the key. Only one of those people used that program. Everybody else, when they saw their options… when they came in, I was able to show options. "Well, here's one way to do it. Here's another way to do it. Here's another way to do it. Their heads are going, "Wow!" All of a sudden, you are opening up for them whole new worlds of opportunity they never even dreamed existed, and you're totally unique because you're the only one telling them about this stuff.

Tom: Just last week, we had an ad running for a downtown condo, list price $139,000. I think it was $1,900 down. We haven't advertised zero, simply because it's been my feeling, right or wrongly, that having at least a finite number is maybe more believable for our typical consumer than having a zero down. So anyway…

Terry: When you say a finite number, you mean a small number? A number that's surprisingly low?

Tom: Exactly.

Terry: So the consumer reading it, and they go, "What?! A $120,000 condo for $1,900 down? How do they do that?!"

Tom: Yeah. So whatever the list price is, I take 5 percent of it, then I figure out, see what that number is. Then I say, "Well, what would be half that or less that would look somewhat interesting.

Terry: Yeah.

Tom: So you work it out. If it's $7,000, well, maybe $1,900 or $2,500 would be interested and go from there. So anyway, this crown attorney called, same as your DA's down in the states, and she came in for the buyer consultation. Turns out she had $50,000 down and could afford up to $200,000. Yet she called on the condo for $139,000 with the $1,900 down payment. This has happened to us time and time and time again. We've been doing this for some time, and although we've had other options, nobody's ever taken advantage of them. So the moral you can read from there is you should have, as Garry says, some options. But frankly, you'll probably never have to use them.

Terry: Tom, what is it that happens? When you're doing this type of thing and people then see that $1,900 down, what happens when they call you? What is their tone of voice when they call you guys in the office and are inquiring about that?

Tom: Well, first of all, they're very curious. I think they're already a bit more open to us teaching them something. I think by being able to be more creative than the typical Realtor who's in that typical box just the same way that the lenders mostly are, you're able to impress them a little more with your expertise, your professionalism, and how you can best serve that buyer.

Terry: So you're actually positioned as different as soon as they call you? They're already seeing you as something different, so they're open to listening more.

Tom: Exactly.

Garry: You're positioning yourself as Joe teaches us, Terry, to position yourself as a real estate counselor, not a real estate salesperson.

Terry: Yeah.

Garry: Yeah. And that really is the key to it. You say, "Look, I'm not a real estate salesperson. I don't want to sell you anything. But what I want to do is take you through the process one step at a time. Here's some ideas that we could use during the process that I think might apply to you." Maybe a third way that we might talk about a little bit, and this is covered under this topic of buying with as little as zero down. When I do seminars, by the way, Terry, that's quite often how I'll advertise it. Sometimes I'll say, "Come and learn how you can buy a home with as little as 2½ percent down."

I know that's one of the things that Tom's worked with, is the 2½ percent down. That relates to what we call our register retirement savings plans here in Canada. Of course, all of our agents on the call will be familiar with that. The RRSP's. The federal government, a few years ago, decided that they would allow people to take out up to $20,000 if you had money in an RRSP, and you can use that to put towards the purchase of a home. Use it for your down payment. That's great, but not everybody has money in an RRSP. And there are ways to use the RRSP plan, even for those people who don't have money in an RRSP. And the way I advertise that topic is, "The RRSP first-time buyers plan for those who don't have an RRSP." And that always makes the phone ring.

And basically what you do, is again, the people have to be credit-worthy and qualified and all of that. You go to the bank and you take out a loan for $20,000. Then you put it into the RRSP plan with that bank. You must have it in there for a minimum of 90 days. On the 91^st day, you can take the money out of the plan, having bought a house.

And the key to it is because you are buying a house and you have a house offer there, the bank does not have to deduct income tax when they take the $20,000 out. But what you have done by putting $20,000 into an RRSP is you have taken $20,000 of last year's income, because you can do it up until the end of February of the following year, you've really taken $20,000 of the money that you have earned and already paid taxes on out of the money that you have to pay those taxes on.

So in other words, you've created tax refund on your $20,000. Now, if you are in let's say a 40 percent tax bracket, that $20,000 amount going into the RRSP is going to create an $8,000 tax refund. If you're in a 30 percent bracket, it will create a $6,000 tax refund, and so on. So let's say that you're in a 40 percent bracket. You've got your $8,000 coming back in March or April, and that $8,000 is enough to buy a house up to $160,000 with 5 percent down. Over the last number of years, we've done all sorts of deals like that.

Just about a year ago, the federal government said, "Whoops! That sounds too much like allowing people to buy with zero down. We're going to put a little bit of a hitch in that and a little qualifier." What they've said is that if you're going to use the tax refund to buy the house, you must be applying an equal amount to the tax refund of your own funds. So in other words, if you're going to create a tax refund of, say, $6,000, then you must show that you have your own cash to match that $6,000.

Now by the way, that $6,000 cash could well be a gift, too, couldn't it, Tom?

Tom: It could be a gift. But also, let's say you had $28,000 in our RRSP. You could tell the bank, frankly, that there's the proof of your down payment. The $20,000 that you could legally pull out tax-free, and another $8,000.

Garry: Another $8,000 that you could take out and use if necessary.

Tom: Sure. If necessary. But once you get the money back, who cares where it is. It's in your account. It's your cash money. It's your down payment. So away you go.

Garry: But that's the secret, Terry, to advertising you can buy a house with as little as 2½ percent down, because you're allowed to create that other 2½ percent using the borrowed money into the RRSP creating a tax refund. See?

Terry: Yes.

Garry: So there's a third way.

Terry: What this does is it takes some… This is knowledge, and this is what I began the call by talking about. You have to have some knowledge. It's not just a matter of, "Oh, I'm a Realtor," "Oh, I'm a lender, come see me." You've got to be able to not know all the underwriting rules to this stuff, but you need to understand some of the basic parameters, find a lender – or lenders, find Realtors who want to do this with you. That's the importance of the strategic alliance between the lender and the Realtor, and why it's so important to bring them to a Main Event if you haven't. And then let them listen to this tape, and then go ahead and begin figuring out which ones work for you. You don't have to use every one of these. Some of them may say, "Oh, that's too technical for me." Well, that's fine.

You said number 3. I've already counted 4. This is 5. I count the simple second from vendor and a 10 percent loan, that was 1. Then I count the 5 percent gift, that's number 2. Then the 10 percent gift, that was number 3. Rent to buy was number 4. And now we're talking about the RRSP borrowing back, that's number 5. I've got 5 strategies written down here, and I'm not even a Canadian, and I can figure this stuff out. I don't even RRSP means or CMAC means, but I know that I could go do this by talking to lenders.

Garry: And let me add the next one. Which one is it going to be, number 6?

Terry: Yeah.

Garry: Number 6, many folks have situations where they're going to be the recipient of their parent's estate upon the death of their parents. I had a young man come in, gosh, it must be 10 years ago now, and he opened my eyes to a system that's patently simple. I simply hadn't thought about it. He came in and he says, "You know, my dad's going to let me put a mortgage on the house that he has willed to me. And when he passes away, I'm going to own the house anyway." So he said, "He's going to put a mortgage of 25 percent of the value of the house that I want to buy against his house, and I just have to arrange 75 percent conventional financing against my house, and now I've financed 100 percent."

I said, "Well, why don't you just have him put just a little more than 25 percent against his house, and that way you'll have enough to cover the closing costs, too." And that's exactly what we did. We went out that week and we helped him to buy a $250,000 house. We put 25 percent against dad's property and 75 percent against his. That's an obvious way to do it, but we just don't think about it.

Terry: If we went to a shopping mall in Toronto or Vancouver, and we stopped 100 people and said, "Do you know any ways using your parents' home that you could buy a home for zero down payment," how many of those consumers do you think would know this?

Garry: Well, my guess would be that unless they're involved in the lending business somehow or they're a Realtor or something, you'd probably strike zero.

Terry: Right. So what I'm saying is, instead of thinking about what our industry thinks or does, think about what consumers want. You hear me talking about that all the time. What do the consumers want? What do they hate about our process? Well, our process is we give them very little information and make them do a cat and mouse game with a real estate agent. But what they really want is information and options. Now, all of a sudden, here, here's another option. Do you think that a consumer who inquired about a zero down ad and came in, and you just laid out these 1, 2, 3, 4, 5, 6 things for them right here, do you think they're not going to go, "Wow!?" I'll tell you. They're going to go, "Wow!" Aren't they, Tom?

Tom: They're going to go, "Wow!" for sure. Another good example is one of my listings, a house in the beaches area here, we were advertising with, again, $2,400 down or something. So this young couple called and I met them over there, showed them through the house, and they said, "Well, let's sit down at the picnic table in the backyard and talk about this." Turns out, they had… the only savings they had really were about $2,000 in cash, they had a $1,700 in their RRSP. Combined income between the 2 of them was probably pretty close to $100,000 annually, and they have no savings. The neat thing is, he also gets bonuses probably 3 or 4 times every year of anywhere from $7,000 to $15,000. So that type of person is prime to a) throw in a chunk of the money and set up that RRSP once they realize the value of it and in the end that they could pull it back out again, and b) you're doing these guys a great big service by showing them how to start a savings program. Big, big time.

Terry: Boy, Tom, you know what you're doing? You're consulting and you're no longer selling. You are now a home finder and home loan finder consultant.

Tom: Exactly.

Terry: Able to give people options.

Tom: Exactly.

Terry: It's simple, isn't it?

Tom: And it also gives you a nice warm feeling through and through, right, to be able to help people like this. It's fun being creative, and it's fun putting the transaction together knowing that they're going to get the house, they're going to actually save taxes while they're doing it, and it's just using money that they already have but didn't know really how to steer it in the right direction.

Garry: I suggest to everybody listening in that it's time to really brush up on your knowledge in terms of how to handle vendor take-backs and to re-establish your contacts with the mortgage brokers who can sell second mortgages and that kind of thing. You can just see the writing on the wall, with interest rates going up and the world economy in a little bit of a bind. And it's those agents who know how to do that kind of a thing that do really well in tough times.

Terry: Because we become valuable because of our knowledge. We have knowledge that the average real estate agent doesn't have, and we're able to show people lots of options that they never even thought about before, or like Joe says, "They didn't even know that they didn't know this stuff." The minute the world of opportunity opens up to them and you're showing them their options, a couple of things happen: a) they want to do it; b) they want to do it with you, because you're the trusted consultant. You're not selling, you're not closing, you're not manipulating. You're just like an attorney, an architect or a doctor.

When you go into their office, they sit down and say, "Here are the things that I can do for you, and here's how much I charge. Here's how my fee structure works. Do you want to do it or not?" That's it. If they say, "No, I want to think about it," you say, "thank you very much," and you go to the next one, because you know there's always going to be a next one.

Garry: I want to say also, Terry, that it really ties into working with the By Referral Only concepts, because most of the people that come to me wanting to buy with zero down, frankly, are coming as a result of a referral from existing clients who have read in my newsletter that they get regularly that I have loans available and can help folks to buy a home with as little as zero down. They remember things like that. And part of what sets you apart as their real estate consultant. So, all of a sudden, a daughter or son of a friend comes along and they say they want to buy a house, but they've got to wait until they have a down payment. Then they say to their mom and dad, "Gosh, I have a Realtor that helped them buy now, before the prices go up, and buy with as little as zero down." So it results in the referrals, see? So it really does all tie in.

Terry: It's just amazing. Once you let people know what their options are, they just want to talk to you.

Garry: There are probably 147 different ways to put together a transaction with as little as zero down. And in every instance, you simply need 2 things. The first thing you need is what I call "opm." Other people's money. And the second thing is a lender who understands the rules. We want to reiterate again that we're not trying to go around the rules. [End of side 1]

Terry: We're talking about using this as lead generation to get people to call us, to see us as completely different, and then we're giving. We're using a loving, giving,, helping philosophy. Full disclosure, talking to the bankers, helping educate them as to some of the things they can do to help people. And as Tom says, it's the sense of satisfaction that comes from giving and helping and consulting.

When you take people who a month before they met you, never thought they could realize the dream of home ownership, they know they're throwing their money away in rent, and now all of a sudden, you're able to change their lives for them. The thank you notes that you get and the letters, and the friendships that you make, and the relationships that you build as a result for rendering true service to people is huge.

Garry: Can you imagine how many people they're going to refer to you? They just can't get over the fact that you've been able to help them to do something that everybody else said they couldn't do. All their friends told them they couldn't buy a house with zero down. Their own banker probably told them they couldn't buy a house for zero down. And you came along and found a way to do it. You've literally changed their lives in a very positive way. They're not going to forget that.

Terry: The more you can do things for people that everybody else was telling them couldn't be done, the more you go down in their book as a super-hero. I don't use that word loosely. But I had… Those are what make your raving fans. I literally used this stuff to help people in Grand Rapids, Michigan who became raving fans to the point where if they heard down the hall, if they heard from somebody else that somebody else was buying a home, they would go to that person and sit there with them on the phone and make them call me, and introduce me to them. That type of a thing. Those are raving fans. They are selling you for you. You become the respected expert.

That's when the business really becomes easy, is when people call you and say, "You don't know me, but John Anderson asked me to call. He actually said I had to call you. I mentioned to him that I was going to be selling my house and buying a more expensive one. He said that there's nobody else I should talk to but you, that you walk on water, that you know everything about home loans, that you have more home loans to offer to buyers than anybody else so that you can make my home sell faster because you have all these options for buyers. He told me how you got more money for his house than he even thought he could get, and then how you helped him find a home and you helped him use creative financing, and you knew all about his home loan options to help him get the best loans. That's why I'm calling you. So can you come over and look at my house tonight and list it, and find me another one?"

When that happens, that's the easiest business in the world. And it all comes from building the relationships. And the relationships begin by consulting and not selling, by offering things of value to consumers, things that they want to know. You guys, this is what consumers want. Regardless of what the industry says, the industry is dying. Consumers want this. And when you offer it to them, if you just climb out of the box and try it once and offer it to them, they come. Tom?

Tom: Yeah.

Terry: What are some of the unique things that you've done?

Tom: Well, they're really not that unique. Actually, they're simply following your formula. The key thing is, I think, if you're putting an ad in to get a call on this, it doesn't matter sometimes if it's zero down or a small payment. It will vary tremendously on the property that you're trying to advertise, and even perhaps its location. Because we noticed a big difference between an ad for a condo and the response that we get, versus an ad for a house in the beaches, versus an ad for a house in Scarborough, which is one of our suburbs here of Toronto. So there's a big difference between those 3. So you have to test things and simply see what works.

Terry: When you say test, what do you mean, test?

Tom: Well, the advantage that we have, at least if you're in the Toronto area here, is that you can put an ad in the Toronto Star, you can run it for 30 days continuously. It's roughly $100 per line, per month, and you can change it at any time. So that's a big advantage. So you can test an ad, and you can change, if you're using Softklone or Hotline to Hot Properties, you can change the fourth digit in the ad so you can track exactly how many calls are coming in over a finite number of days. And if the ad's not working, if you're only getting 1 or 2 calls into the hotline, you know that something's wrong. So you've got to change either the ad or the script. But at least it's glaring right in front of you. I've got to do something here, this isn't working.

For those people on the call, the listeners here that have used the hotline type of script and so on, you probably already know this. But you really have to continue to tweak them and change them and use some key words, and also use that time as a commercial for yourself. I just had a brainstorming session with Kim Eggerton, who's a brilliant lady. She was saying she puts her commercial right up front. So she talks about some of the services that she's offering. And then she said, "Now, we'll get to our featured property," and then goes right into a discussion of the property itself.

And again, the key thing is talk about the emotional side of the property. Don't necessarily talk about the 100 Amp service or the 4-stair gas furnace. Yippy, shit. Nobody gets excited about that. But they might get excited about that sun-drenched, south-facing deck and the beautiful perennial garden and the beautiful gleaming hardwood floors. Something along that line that could get some emotion attached to.

Terry: So I'd have it under "Homes For Sale," and I would say, "Beaches. Lovely homes. Zero down payment. Free recorded message." And I tested that against, "Beaches. Lovely homes, $2,497 down payment." And I tested that against "Beaches. Lovely homes, $200,000 to $300,000, $3496 down payment." I tested all that. I'd be able to tell by running that ad 2 or 3 days and counting how many calls came in on it.

Tom: That's right.

Terry: And I did that over the course of several weeks, I would know which ad works best for me in my market.

Tom: And we've also found that because we always have to end up here in Toronto with your name, your broker's company name and so on, that has to be in the ad. That normally takes about a line and a half. Plus your hotline number and so on. That's probably 2 lines easily right there. So if you're just running a 4-line ad, that only leaves you 2 lines for copy. So I've gone to either a 6- or an 8-line format, which is a little more expensive. It's 600 or 800 bucks for the month, but you get far more copy into it and far more key emotional words into it. And of course, your ad stands out a bit more, too, because it's a little bit bigger on the page.

Terry: Great.

Tom: If I could piggy-back on a couple of things that Garry had said earlier?

Terry: Yes, please.

Tom: One of them was he was talking about co-signers, or actually co-owner of the property. Actually, another thing that people may not think about, necessarily, is having another family member go on as a guarantor or co-signer on the mortgage. Now in the old days, that person only had to be on the mortgage. They didn't have to be on the title. But now with CMHC's newest rules, you have to. That person actually has to go on title, whoever is co-signing on the mortgage.

Tom: So you might say, "Well, I don't want George on there for 50 percent ownership." Well, you don't have to. You put them on as a 1 percent owner, and you become a 99 percent owner. You can have a very simple side agreement that states that upon the sale, all the proceeds go to you.

Terry: Dad could put in his own money for the down payment, and I could be 99 percent owner.

Tom: Exactly.

Garry: Terry, I think if I could just suggest that we'd be dealing with here would be, let's say a son who's just opened up his own business and doesn't have the 3-year credit history that is necessary.

Terry: Bingo.

Garry: He's making lots of money, and he probably even has a bit of a down payment himself. But the question is when he goes into the bank, the bank just says, "We don't want to talk to you until you're in business for 3 years." There's a situation where you'd say, "Great. But if I could get dad to come on with me, he's got the qualifications." So it's using somebody else's qualifications, where you have the ability to pay and to buy it yourself. I think this may be just the reverse of what you suggested.

Terry: Or if I don't qualify on a ratio basis, I could think of dad.

Tom: There's many people out there who, believe it or not, don't declare all their income on their tax return.

Garry: Oh! No kidding!

Terry: In Canada, too?

Tom: So for example, people are self-employed and they think they're doing the right thing by having a very low… or writing off absolutely everything. Right? So as a result, their declarable net income is extremely low. But in reality, they've got tremendous cash flow and can easily afford the property. So that's when they're going to need a co-signer, because they're not going to be able to qualify on their own.

Garry: A really good example.

Terry: That's great, Tom.

Tom: Another side of it is when Garry was talking about getting a mortgage on mom and dad's house. In some of my experience, mom and dad have worked and slugged and paid off their mortgage when it was $25 a month, and that was a big deal for them. They're scared of the idea of a mortgage. So sometimes, if you put a big amount like that, i.e. 25 percent or $50,000 on a $200,000 property, it might scare them. But if you be a bit more modest and then go for that 10 percent down to avoid the higher CMHC premium, it's only $20,000. So it's not such a big deal.

Garry: The other there, Tom, too, is there's another situation where you use the co-signer concept. You have a buyer co-sign for mom and dad's loan, so that they also are taking official responsibility for it. And that can ease mom and dad's bind.

Tom: Yeah. Exactly. But also, you go for that 10 percent down or $20,000, then a) mom and dad may not be so concerned about it; b) you have to coach the buyer so he's able to explain to mom and dad, who are probably seniors, exactly how this would all work. And of course, they would have to be able to, and again, be able to make those monthly payments for mom and dad. Because moms and dads don't want to have to have that mortgage hanging over their head.

We've found this too. Some buyers have gone to mom and dad on a situation like that and explained the thing, and showed that they're really keen, showed that they're really responsible, showed that they've done their homework, and mom and dad said, "Listen, Mary, we have $20,000. Let's not put the mortgage on. It's sitting in a GIC now, which is only earning 3 or 4 percent annually. Why don't we loan it to you or give it to you now, instead of giving it to you when we pass on, and let you get into a house?"

So in a sense, the kids have proven themselves to mom and dad that they've done all their back-up work and so on. Another thing for agents who haven't been in the business before, let's say, '87, '88, is perhaps learning how to do those VTB to sell mortgages. Vendor take-back mortgages to sell. Because I started in '81, and those were a big deal for the first 4 or 5 years, because of the high financing rates. So now, I think all of us should start looking for a mortgage broker – not a banker, because they don't do it – but a mortgage broker who can do those VTB to sell situations.

Of course, you're going to find out that there's going to be discounts involved, you're going to write the mortgage at, say, $15,000 at 7 percent for 2 years or 3 years or 1 year even. But you know the private lender who may be buying that or some of the secondary financing institutions are not going to want 7 percent. They're going to want 10, 12 or 13 percent on their return. So there's going to be a discount, which means that if the mortgage face value is let's say $15,000, the vendor who's taking back that mortgage might only get $13,000 net out of it.

Terry: Or even 12 or 11.

Tom: Or even 12 or 11.

Garry: As long as you bonus the price of the house by that $2,000 or $3,000, the vendor ends up with the same price.

Tom: Precisely.

Terry: Or you may be in a market where, like Vancouver right now, it's a tremendous buyers market. The bubble has burst over there. I'm sure there's a lot of fellows in Vancouver right now that would be happy to take back a second and sell it for 80 percent, get their cash out. But that sure beats dropping their price 50,000 bucks.

Tom: That's right.

Garry: One of the things that would really set you apart if you're going to get a listing from any of the other agents you may be competing with, is being able to say, "Mr. & Mrs. Jones, when I advertise your property for sale, I'm going to be able to advertise it with as little as zero down, and see how that could be of benefit to you."

Terry: Oh, and that's a tremendously powerful listing tool. We haven't talked about that a lot on the call, because that's not a focus of this call, because we've been talking about buyers. But when you sit down and show this stuff to sellers – I've got 10 things written down now – I can do 1, 2, 3… In addition to my signs, in addition to my 24-hour recorded messages, in addition to all this stuff, I've also got these financing. That's what people are going to know about. They're going to hear about these options, and all of a sudden, when you draw a pie chart for people and you show them, "Okay, if I didn't do this stuff, here's the sliver of pie that we'd be going for. But when I do this stuff, your pie gets to almost half." And they go, "Wow! I get it." And all of a sudden, you've established yourself as a totally unique marketer, different than every other listing presentation they've ever seen.

Garry: And this is another factor, Terry, that fits into the scenario that I think a lot of us are competing with these days. Those of us who are what we call "full-service Realtors" and like to charge a full commission, we're competing with many Realtors who have taken the discount route. This kind of knowledge is another one of those things that can help you to get that full commission.

Terry: Man, I'll tell you, the cutting your commissions, cutting your prices, is the worst thing you can do. Because consumers do not buy on price. There's always somebody who can come along and charge a cheaper price. And I guess some consumers do, because there's Costco's and Sam's Clubs and Discount Markets. But is that the market you want to be going after? You see, the majority of the market is not driven on price, they're driven on service. And I'll give you the proof. If price alone determined everything, every garage would have a Yugo, every closet would be full of K-Mart clothes, there would be no such thing as a Hilton or a Marriott because everybody would be staying at a Motel 6. There'd be no Mercedes Benz, there'd be no BMW's, there'd be no Volvos.

Tom: No boats.

Terry: No boats. There'd be no first-class sections in airlines.

Garry: No cottages on the shores of Lake Ontario with the waves coming in here this morning.

Terry: Yeah. So get out of the box of saying, "Oh, my competition is charging…" People don't. Rick Ruby is a lender who does a 100 percent referral business. And Rick Ruby charges more than any other lender, and here's the key. His clients know that he charges more and they want to pay him more because of the relationship.

Garry: That's right.

Terry: It's all about relationships and having knowledge. And they know that Rick Ruby cares about them and knows more about loans than anybody else. That's their perception. So they'll use Rick before anybody else, even though… So Rick doesn't have to worry about shaving points or absorbing points, or cutting his fee a quarter percent to beat the next quote, because he has no competition. And when you have this kind of a knowledge and you're able to give these kind of options, you don't have any competition either.

Garry: We've probably inundated our listeners this morning with a whole bunch of stuff. But I wonder, Terry, if we're at the point where there might be some questions.

Terry: I think that would be a great idea. Tom, is there anything else you want to add before we go to questions or did we empty your brain out too?

Tom: Well, I think one of the little clarifications, and Garry was sort of saying the opposite of what I'm going to say, but I think this is the case. And that is that CMHC recently said that you had to have from your own funds, again, 1 percent of the closing costs. So just a minor correction there. You couldn't borrow all of it. You have to come up with 1 percent yourself.

Garry: In terms of the closing costs. I believe you're correct, Tom. Yes. I forgot that.

Tom: But it doesn't change anything. That simply means that they can have another 1 percent in their RRSP or 1 percent more from mom and dad, or, or, or, or, or. Right?

Garry: That's right.

Terry: Well then, let's open it up to some questions and answers.

Caller: Good morning. My question is regarding advertising. Are you placing most of your ads in like the newspaper as opposed to doing classified style ads in the local real estate type of magazines?

Terry: I'll throw this over to Tom, next, but I would recommend that you get on the Monday Gold Rush APS calls, because that's all we do is talk about lead generating there. There are literally dozens of different ways that you can get the message out there. Your hotline is a big funnel. And what you want to do is have as many different people calling. Where are consumers? Where are these people likely to be? What's your target market? What are they likely to be reading? There's the neighborhood shopper. There's the weekly shopper. There's the neighborhood daily. There's the daily newspaper.

You can advertise under "Homes For Rent," because many of these people, as we talked about, the yuppies that are in an apartment. They've had their child, now they're looking for a home to rent. They don't perceive they have the down payment. They're looking under "Homes For Rent." You advertise under there, "Kentwood. Lovely home, zero down payment," they're going to call. They're going to come into your hotline. They're going to hear your message about your unique service offer. They're going to call you.

Yellow signs. We talk about yellow signs. Yellow signs in front of houses, yellow signs on street corners, yellow signs made of 8 by 11 paper that you put on bulletin boards in libraries and grocery stores. It's a never-ending stream of things that you can do. I think that Tom would tell you, you've just got to test. What works for you, Tom?

Tom: If you did an article-like ad with a good solid headline that was not selling, and it didn't look like it was selling, it was more informational, you would get a bunch of calls.

Terry: And those ads are in the marketing library, right in the marketing campaigns that are in there for you. You guys should all have info boxes in front of your listings if you have a sign. And in your info boxes, most of you are just using one side, and the whole back of your flyer is empty. That flyer should be a lead generating ad that says, "More homes available. Lovely homes, zero down payment." That will fill your funnel with leads.

Garry: And for those of you that might not be familiar, Resale Homes is one of these regional little booklets that comes out about half an inch thick with various Realtors ads in it.

I use that a lot. Most of the advertising I've done with the zero down concept, Terry, has actually been advertising seminars where we advertise "Come and learn about 6 bank-approved ways to buy a home with as little as zero down." We get 30, 40, 50 people to a Monday evening seminar. And out of that, do a lot of business.

We co-sponsor those seminars with a bank, so that really adds credibility when the ad that they're seeing is with the bank logo at the top and with, in our case, a Remax logo alongside it. That really adds credibility. "Come and find 6 bank-approved ways to buy a home with as little as zero down." So that's really very strong.

I use flyers in my areas. I really believe in advertising to a very local area, and I'm in the Middleville area of Northwest Missassauga. So we put out about 12,000 flyers on a door-to-door basis for that type of thing. We've also used some targeted advertising going through the post office, where we can target it right to postal routes and we can limit that to apartments. So we can target all the rental apartment buildings in town for a particular seminar. That's proven to be very strong for us.

Terry: What you said there, Garry, was by having the bank logo on your ad with you, that's called in marketing, a third-party endorsement or the halo effect. The fact that they're on there with you, you've got their halo shining down on you, and that's what draws so many calls to you or to your hotline. Thanks for answering that. Okay, next question?

Caller: Hi. I'd like to ask about the RSP. If you don't have an RSP and you want to put $20,000, if you have from the previous tax return limits on this RSP contribution, is there any way you can over-contribute and still use this $20,000 contribution to your RSP without getting into tax problems?

Garry: Margaret, this is Garry. I think the answer to that is no, not that I'm aware of. But you may want to check with a tax accountant on that. There is an over-contribution limit, I think, of a couple of thousand dollars. But I never recommend that people over-contribute. It's just a matter of contributing what they would be allowed to contribute, given the amount that would have been stated to them on last year's tax return notice that they get back with their refund. Everyone would have an indication on that of what their limit for the following year would be.

So, you contribute up to the limit. If your limit is $16,000, well, that's what you contribute to. So we're not talking about over-contributing, but I would check with a tax accountant. You might be able to use another couple of thousand dollars, but it's usually not necessary.

Caller: Okay.

Tom: Just to answer that, too, that form is actually called a Tax Assessment Form. So you might want to say to your clients, "Can you bring in a copy of your latest Tax Assessment from Revenue Canada?" So for everybody who's filed in Canada already by April 30^th at the latest, then they should probably have that by now. On that, will tell them what their allowable contribution is for this current year, plus any amount that's accumulated over the past several years. So for example, on that young couple example I talked about earlier, we're getting them to bring that in next week for their buyer consultation. I'm sure that he's going to have a $20,000 to $30,000 limit, easily built up over the past several years of working.

Garry: I think too, Tom, that one of the things that would be worthwhile adding here, and again, a little bit of knowledge can really help your buyers. We very often have buyers come to us and say, "No, I don't have any money in an RRSP, but I've put aside $20,000 to buy a house in a savings account. If their intended purchase date is 90 days or more down the road, you should get them to put that $20,000 into an RRSP if they have an ability to do that, if their qualification amount is that high. Or put in whatever they can, and then the following March, April, they'll get a tax refund on that. But many people don't think to take that cash and put it into an RRSP.

Tom: So even if they have that $20,000 in the RRSP… No, $20,000 cash right now for their RRSP, and let's assume they have the limit available of 20, throw it in now and say, "Look, guys. Let's go out and buy a property, but we just have to make sure that the closing is in 90 days." I think it can close in 60, frankly. There's a bit of a gap there. But let's say 90 just for the purpose of this call and simplicity, they close in 90 days. Well, they won't get their tax refund back, but they already had the money anyway, so they don't need it. Then they're going to get a nice bonus come spring. They can do an electronic filing as of February 1^st, and boom, within 2 or 3 weeks, they're going to have a check.

Sure. And not only that, but let's say that mom and dad are giving them $20,000, and it's a legitimate gift. Why not take mom and dad's gift and put it into the RRSP, and then take it back out again and create your tax refund. And now, of course, in every instance where you take the money out of the RRSP, the rules are also that you must also refill that RRSP over the next 15 years. So if you took the full $20,000 out, every year you must put back $1,333.33. And you never want to refill it faster than that. Because let's say that you had $2,300 next year that you could put into an RRSP. You'd put in the $1,333.33 that you had to, and you take the extra thousand and put it into a new RRSP to get the tax refund on that in the new year. Does that make sense?

Caller: That makes great sense.

Tom: It's not avoiding another RRSP. That's a good twist there, actually, is putting the extra money into another RRSP, a second RRSP. You can have as many RRSP's as you want. Then get the tax refund on that. That's excellent.

Garry: In fact, my tax accountant tells me it's not a matter of actually having another RRSP per say, it's just a matter of how you report it on your income tax filing. But you would report the extra filing as a new input into RRSP, as opposed to repaying the old one that you have to. You never repay it faster than you have to.

Caller: Do you get different T-4 slips for the repayment, rather than the contribution?

Tom: Yes, you actually do declare it a bit differently. You should talk to an accountant on that.

Garry: Just talk to a tax accountant on that.

Caller: This is great information, guys. Thank you very much.

Terry: Tom and Garry, it's very evident to me that to become fluent in this stuff, Canadian members will need to have a working understanding of the RRSP. And the more knowledge you have about how RRSP's work, the better you'll be able to communicate this stuff and explain it to bankers, explain it to accountants, explain it to mom and dad. Where could a Canadian member go to get more information? What do you recommend that if we have a listener on right now that's saying, "Gosh, I really want to brush up on this stuff," where are some things that they can do?

Garry: It's Garry, Terry. I would say this. One of the things that I do every year on January and February, before the end of the tax filing season there and the RRSP contribution season, the end of February, is I run seminars with 2 of my associates. One is my tax accountant and the other is my financial planner. We run a 3-way seminar and we share the costs 3 ways. We have information on tax accounting, investment, and real estate. And those seminars are amongst the best in terms of draw for me, and I get a real cross-section of people. We get many people coming to those seminars to hear about tax accounting, or to hear about financial planning.

Of course, I meet them. And then it might be 2 or 3 years later they need a Realtor, and they come to me then. So it's a real useful kind of thing for me and it shares the costs. Again, we advertise these with flyers and so on. And just listening to these guys talk to the information is where I've picked up most of it.

But you really need a couple of experts. One is a tax accountant and the other is a financial planner. I would say thirdly, most bank managers have a real good working knowledge of this, although some of them have, again, put their heads in boxes. But most of them have a really good working knowledge of this. So those are 3 good sources.

Terry: Excellent. Thank you. How about you, Tom?

Tom: The same. I'm sure there must be a web site for it, but I don't know the address.

Garry: That's a thought I hadn't thought of.

Tom: But somebody, I'm sure Revenue Canada's got it somewhere.

Terry: Yes. So in other words, they can get a copy of it and read it. But then, like Garry was saying, the strategic alliances… There's nothing like just getting to know these guys and doing seminars with them, or sitting down and saying, "How can I help you guys? I've got 500 clients in my database. Can you tell me how this stuff works and explain it so I can understand it, then I can send them to you for information. You can do their accounting." This is strategic alliance stuff that's taught at the University. Excellent.

Tom: That's right.

Garry: These are guys, too, that I have in my homeowner service center directory, too, Terry. So again, it's networking that works all the way around.

Terry: You bet. How about the next question?

Caller: I do a lot of homebuyer seminars and I have seen your recent Resale Homes ad, and I'm just wondering what kind of response you do get to that seminar ad that you run in Resale Homes.

Tom: Okay. I guess the answer is we're doing quite well with it. I would certainly appreciate it if the local people didn't duplicate my ads exactly. Simon actually had that happen. A Coaching Club member, exactly, word-for-word, headline, everything, duplicated his ad and ran it in the same milieu. So I would appreciate it if somebody didn't do that. Now, having said that, it works really well. I started in May. The first seminar had 17 people. Then we had 21, then 25. And the fourth one we did in August had 31 people at it. So it's building each time.

Garry: That's an eye-opener to me, because I must admit that I have not run seminar ads in the spring and summer time. And if you're getting that kind of pull when you're competing with fishing and weekends at the cottage and holidays and all of that, wow. You're going to have an amazing response when you come into September, October, November, and the rest of the year.

Tom: Already for our September one, which is in mid-September, on the 15^th, we've already got at this time, with 2 more weeks to go, we've got 31 people signed up.

Garry: I'm not surprised.

Tom: Mind you, there is attrition. Like last time, we didn't have too bad. It was 34 people signed up and 31 appeared.

Garry: I figure about 75 to 80 percent, actually showing up on the day. There's always illness, or they get busy at work or whatever.

Tom: Or they forget.

Garry: So I always allow 20, 25 percent attrition.

Tom: Yeah. Follow-up letters, phone calls, things like that to remind people and so on. And also, I'm doing it with a lender, and the lender provides a whole dinner with lasagna and salad, soft drinks, coffee, and even some white wine.

Terry: In your marketing library, document 9028 is Wayne and Joy's seminar campaign. Their hotline script, their ad, everything, are all right there for you. I want to add at this time, too, Tom and Garry have been very generous today sharing with you. And I ask you, they're giving… they're taking… they're both off to the cottage this weekend. They're taking their time to be on this call with us and to share their knowledge. But I urge you to carefully consider calling them for personal coaching. That's not their role. Their role here is they've shared. The Monday calls is the forum for these types of conversations. So if you want to carry the dialogue further past today, get on the Monday calls. That's where we talk about lead generating and marketing. What I wanted Garry and Tom to do was put into your hands tools that you can use to help get you out of the box and saying, "No, we can't do zero down here in Canada." I think now everybody agrees, "Well, maybe I can." Now, get on the calls with me on Monday. This is where we will coach you along and steer you in the right direction. I urge you again, just be very, very careful about imposing on Tom and Garry. They've given, and they'll give again. We appreciate you guys' contribution very, very much. We're at the end of our time, but I want to thank you guys. We had a great call today.

Tom: You're welcome. It was great.

Garry: It's been great. I want to thank you for getting me off my knees. I've been down on my knees sanding floors in my cottage here for the last couple of days, and they've got a new pine plank floor here, Terry. It's looking great. But it's been wonderful to sit up and look at it from a different height for a couple of hours. I've enjoyed it. It's been great. Thanks for some of your ideas. Gosh, I've learned a lot from Tom this morning, too.

Tom: And vice versa.

Terry: So Garry, you're up at your cottage right now?

Garry: Yeah, I'm sitting here at the shores of Lake Ontario with about 4-foot waves coming in from a bit of a storm last night. And all of my furniture is outside on the deck covered with plastic. We're staying in a tent trailer here while we finish the floors. There's the scenario. My wife kindly took our 2 Corgies out of here this morning, so you wouldn't hear barking in the background.

Terry: How about you, Tom? Did you say you were heading off for a vacation?

Tom: We're towing our boat up to Bob Cajun and putting it into the lakes in the Trent Canal System and just cruising around for 5 days.

Terry: Wonderful.

Garry: Tom, that's wonderful. Gosh, I wish you were coming a little closer. I'd love you to drop by. One of these days, we'll have to do a little fishing.

Tom: Sounds wonderful.

Terry: And I know the both of you guys. Tom, you're delaying your vacation a little, and Garry, you're interrupting it for this call. Thank you so much for your super-servant attitude, your willingness to share and to give, and open up new paradigms for all the members. I wish you a great week and a great holiday.

Tom: Thank you very much.

Terry: Bye, everybody.

Garry: Bye, Terry. It's been great.