Real estate is my world. I thrive off the energy, and am a self-proclaimed real estate “junkie”. Nothing makes me happier than finding someone their first home. So with all my real estate experience and knowledge, I thought I would take the time to debunk some rather frustrating myths about real estate in Toronto.
I’ll Just Wait for the Bubble to Burst
You are going to wait yourself out of the market, my friend. Property values have been increasing by, on average, nearly 9% per year in the last decade (yes, DECADE). No bubble bursting going on here. Real estate in Toronto is a very strong investment. But let me be clear here, there are still good deals to be had. Don’t wait any longer. Start now, start small, and stay patient.
…and a similar variation…
I’m Waiting to Save a 20% Down-Payment
Although I applaud your goals, this one I have to burst. Any savings interest you earn each year is most definitely drastically lower than the increase in home values each year. Toronto homes are increasing nearly 9% each year. The mortgage loan insurance (ie: CMHC) is manageable, and can help you get into the real estate market. You can also “borrow” from yourself, by withdrawing up to $25,000, tax-free, from your RRSP. You will then have 15 years to repay that amount back to your RRSP. Just please stop waiting to get into the market. You will wait yourself out of the market. Start now, start small, and stay patient.
I Need to Worry About the “Stress Test”
Please don’t stress the stress test. Banks, through the application process, perform stress tests of their own. Let’s face it, banks don’t want their clients to default on their mortgage, so they ensure the purchase is within their client’s financial means. All the new stress test will do is ensure you aren’t over-extending yourself.
I Can Apply for a Mortgage Later
This is terribly unwise. Get pre-approved prior to house-hunting. You don’t want to miss out on your dream home because you didn’t line up financing in advance. This is such an easy step, just get it done ahead of time. This process will also help you determine what you can realistically afford.
Contracts are all the Same
Absolutely not! This is why it is critical to use the services of an experienced real estate professional. We know what to look for, and what to insist in those contracts. Why would you risk something like this on the largest investment in your life?
The Buyer Pays Commission
In a real estate transaction, it’s the seller that pays the commission (to both the listing agent AND buying agent). So when buying, this is not something you need to factor into your expenses.
I Have to Pay my Realtor
Real estate professionals are paid 100% by commission. If you don’t buy/sell, then your realtor does not get paid. And as mentioned above, the seller covers the commission for both agents.
Bidding Wars Are Bad
Okay, so bidding wars are not desirable for buyers. But they are nothing to be scared of if working with an experienced real estate professional. There are ways to creatively present an offer that will make yours stand out of the pack. And it doesn’t have to mean more money.
I Have Time Before Offer Date
Not necessarily! Again, this is another reason to work with an experienced real estate professional. “Bully” offers do happen, and have been becoming more common as of late. One way to prevent a home from being sold before you see it... actually see it. Book a viewing. That way, if an offer is registered, the listing (selling) agent must notify all agents that have taken clients to view the property, or have expressed interest in the property via email, etc.
Spring is a Sellers Market
For the most part, yes. December also tends to be slower, which makes it more of a buyer’s market. But please keep in mind that even in slow markets a great buy will still attract buyers, and an undesirable house in a bad neighbourhood will still likely not sell in a hot market.
Moving to Toronto? Are you part of a Toronto relocation with your employer? I can help you with all steps of the process, from finding a new home, temporary accommodations in the meantime, settling in services, move management, and so much more. So many steps of the move can be handled in advance, so when you arrive we can get you settled much faster. When moving to Toronto, I can help with all aspects of the relocation.
I’d love to hear from you, so call me today to discuss.