Expert advice on how to get what you need
Consider pre-construction You’ve got to look at the reputation of the builder if you’re buying off a plan, but at least you can crunch the numbers, says Andrew Harrild of Condos.ca.
A resale homebuyer simply doesn’t know what it will take to win. Harrild coaches his clients in offering a price that makes sense given the type of property, the neighbourhood and the market. But, he said, “More often than not the numbers are nonsensical. It’s a Catch-22. Do you want to win? If the answer is ‘yes,’ you kind of have to play the game and the game in the resale market is a crap shoot.” When it comes to amenities, less can be more “A lot of buyers that I work with want the sexy and shiny. If that’s ultimately a deal- breaker and a must-have we’ll do our best,” Harrild said.
But he encourages buyers to broaden their horizons and look for older buildings with reasonable maintenance fees that they might not initially have considered. Those can be pockets of good value in a market where value is increasingly hard to find, Harrild said.
“Those might be buildings 15-plus years old. They might not have the 10-ft. ceilings. But they’ve got functional layouts, they’re well managed, they’ve been through a number of budget cycles. You know what you’re getting involved in and you can get a much better price per square foot,” he said. Champagne taste on a beer budget? A lot of people are willing to be cash poor or commute long distances if it’s the only way they can get into the market, says Tarik Gidamy of TheRedPin.
But he recommends they consider carefully what they will sacrifice to invest.
People are narrowly focused on living in Toronto, but there are some areas such as Hamilton and Stoney Creek where prices are lower and the potential to grow an investment is great. The trade-off is probably a long commute and forgoing the kind of restaurants and amenities that downtown Toronto offers.
“Am I going to make the sacrifice in order to play this game of real estate over the next three or five years and see the benefit of going out of town? Or am I willing to live in a 300-square-foot box,” Gidamy said.
Don’t over-extend yourself “I have clients who make $40,000 a year and want me to get them a $600,000 mortgage,” says Andrea Jolly, principle broker at TheRedPin Mortgage.
Caught up in the frenzy, clients are pushing their finances to the absolute limit. “Trying to talk them off the ledge,” she says, is part of her job. “That expectation that everybody else is able to buy in this market is an illusion.” Park your emotions If the frenzied speculation about market cooling has you spooked, waiting a month for the province to play its hand in the budget isn’t going to make much difference, agent Desmond Brown says. Lost a bidding war? “More will come on the market. Be patient and we’ll find you something and let’s not get carried away in all this hype. If we put an offer in on something we’re going to not get carried away,” Brown tells buyers from the outset.