Tips For Purchasing Toronto Real Estate
1) Get pre-approved rather than just pre-qualified
If you want to get the best condo or house you can for the least amount of money, then you need to make sure you are in the strongest negotiating position possible. Price is only one bargaining chip in the negotiations, and not necessarily the most important one.
One of the ways to make a strong offer today is to get a full mortgage pre-approval ahead of time. Your lender will not only ask you questions, but also request that you send him several documents to verify your income (employment letter, pay stub, T-4 and a copy of your tax assessment form), your down payment (copy of GICs, RRSPs, bank statement or gift letter) and authorization for him to do a credit bureau.
You are going to have to supply this information anyway so it makes imminent sense to get it all done ahead of time and avoid glitches and disappointment later. After all information has been checked and verified, you are actually approved for the mortgage with a guaranteed rate for around 90-120 days. The only loose end is the appraisal on the property. This entire process only takes a few days from the time you send your lender all your documentation.
2) Sell first rather than buy first
In the previous real estate period before the market became a seller’s market 10 years ago, home owners could go out and purchase a new home conditional upon the sale of their existing home. That option is not usually available in the marketplace today because sellers have lots of people interested in their homes. Your only realistic choices in today’s Toronto real estate market are either to buy first or to sell first and there are pros and cons to each option.
Some home owners are more concerned about knowing exactly what they’re going to net out of the sale of their home. They usually are better off selling first, putting a long 90-120 day closing on it and then going out to find their new dream home. Others are more concerned about finding the right home because they have very specific neighbourhood or property criteria. That person is probably better to select their real estate agent, research the market to find the perfect new home for themselves and buy it with a longer closing - again 90-120 days or so. Then come back and put their existing property on the market asap.
It is likely best to start off by doing a market analysis of the current value of your property. With that number in mind, you can go out and see some homes to assure yourself that there are indeed houses or condos out there which would be suitable and are priced right.
3) Make lists of what you want
Before house hunting, make a list of what you want in the new place. Then make a list of what you don’t want. You can use these lists as a scorecard to rate each property that you see. This helps avoid confusion and keeps things in perspective when you’re comparing dozens of homes.
When house hunting, keep in mind the difference between surface issues and the bones. The bones are things that cannot be changed such as the location, view, size of lot and floor plan. The surface issues are easily changed finishes like carpet, wallpaper, color, and window coverings. Buy the house with good bones, because the rest can always be changed to match your tastes.
And always be sure to imagine each house as if it were vacant. Consider each house on its underlying merits, not the seller’s decorating skills.
4) Don’t be pushed into a condo or house
Your real estate agent should show you everything available that meets your requirements. Don’t make a decision on a property until you feel that you’ve seen enough to pick the best one. But, with that in mind, homes which are well priced are selling quickly these days, sometimes a few days after listing. In that kind of market, some agents will advise their clients to make an offer right away if they like the house. That is good advice in a busy market, not pressure.
5) Stop calling ads!
A word of caution - agents create ads in the Resale Homes magazine or the Toronto Star solely to make the phone ring! Many of the homes have some drawback which are of course not mentioned in the ad, such as traffic noise, power lines, or needing a lot of fix-up work. What’s not mentioned in the ad is usually more important than what is.
For this reason, you have to be very careful when reading ads. Remember that the person writing the ad is representing the seller and not the buyer. The most important thing you can do is have someone on your side looking out for your best interests. Your own real estate agent will critique the property with an eye towards how well it meets your needs and will point out any drawbacks and defects you should know about.
So, to get the best buy on a property, you should always find your own real estate agent and stick with him or her.
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Contact the Jeffrey Team for more information
