The Toronto real estate market has increased steadily since 1996 and prices are at an all time high. As a buyer, are you doomed to accept the fact of Toronto real estate bidding wars or are there alternatives? We believe there are always buying opportunities and our experience will show you the way.
Buy a house that has been lingering on the market
The best deals can be found when buying a house that has lingered on the market. But many times buyers don’t offer on these houses because “no one else wants them” and “there must be something wrong with them”. It’s not unusual for a house that has been sitting for months to eventually get a multiple offer and sell for well above its asking price. One example is of a property that was listed with another brokerage firm for $939,000 for months with no offers. The seller reduced the price to $799,000 and then it sold for $940,000. Had a buyer offered on the property when it was listed for $939,000, they could have potentially purchased the house for much less than $940,000. But the buyer waited until everyone else wanted it and paid an enormous price. Believe it or not this happens more often than you think.
See the potential
Even if you can’t afford to replace the hideous wallpaper in the bathroom now, it might be worth it to live with it for a while in exchange for buying a house you can afford. If the home otherwise meets your needs in terms of the big things that are difficult to change, such as location and size, don’t let physical imperfections turn you away. Besides, doing home upgrades yourself, even when you have to hire a contractor, is often cheaper than paying the increased home value to a seller who has already done work for you. And then, it’s exactly the way you want it.
Take advantage of market shifts
The Toronto real estate experienced a sharp shift from September 2008 until April 2009 when the financial crisis in the US triggered government bank bailouts and brought our real estate market to an abrupt halt. Fear and uncertainly gripped everyone, demand plunged, and Toronto real estate prices dropped at least 15% in a matter of six months.
We believed this was a fantastic buying opportunity for our clients who had stable jobs and encouraged them to take advantage of the opportunity. House prices and interest rates were lower than they had been in years making this an opportune time for first time buyers and move up buyers who had found it too expensive to get into the market or to move to a bigger house in the frenzied market.
During that time our intuition told us this was a temporary situation and that it represented a tremendous buying opportunity which we communicated to our clients and prospects. We received a lot of feedback on this but one email in particular stands out:
Although we’ve only met briefly at an open house a few months ago, I wanted to take this opportunity to thank you. Why?
Frankly, of the dozens of email newsletters and e-zines I receive on a daily basis from all over the world – on topics from media to the economy – yours are the only ones I don’t delete without reading. Given the state of the world, I truly appreciate your positive tone and your subtle attempts to communicate that maybe, just maybe, the world just isn’t quite coming to an end.
So keep up the good work.
Clients who took our advice and bought a house during this recessionary time are forever grateful. Based on our recommendation they took a leap of faith. Our experience and conviction gave them the confidence to trust our advice. They bought houses they would otherwise not have been able to afford during the frenzied real estate market of the past. Today, in retrospect, they got great deals. Cary and Debbie Ernest sum it up in their testimonial:
In March 2009, the Toronto real estate market was in the doldrums brought on by the collapse of the US banking system. Fear gripped sellers and buyers and the market was at a standstill. Few people were thinking of trading up to a bigger house. Josie and Valerie met with my wife and me and presented us with a scenario that actually made sense. They explained that it was cheaper to move to a bigger house now than it had been for years since prices had dropped about 15% in Toronto in the previous 6 months.
We knew we would get less for our current house but trading up was more feasible because the house we wanted to buy had come down by more money so the spread to buy had actually decreased. Josie and Valerie also simultaneously had a buyer for our house which prevented the stress that would have been inevitable had we bought before we sold in what had become a buyer’s market. Josie and Valerie’s confidence that we were making the right move gave us the courage to take the plunge. In retrospect, we are ecstatic with the outcome. We were able to successfully purchase a new house in a fabulous family neighbourhood which would have been otherwise out of reach for us today considering the rebound in Toronto real estate prices since 2009. Our new home has almost doubled in value since we bought it! Thank you Josie and Valerie — you’re the best!