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Real Estate Buying Tips

xarir

Retired TERB Ass Slapper
Aug 20, 2001
3,765
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Trolling the Deleted Threads Repository
Let's try something a little different ...

I've been in the market looking for a new place to buy. I'm in no rush; I have the luxury of taking my sweet time and looking for The New Place. Thus far I've limited my search to new condos being built in the downtown area.

Today I dropped by a new development. The lady there told me that they pay agents 4% of the selling price if the client buys. Since I wasn't using an agent, they were willing to give me the 4% as a cash back deal. I've never heard this before, so I'll have to try it out on other developments to see what they say.

Anyone else have any real estate buying tips to share?
 

banshie

Member
Jan 27, 2003
886
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16
Be careful. The bottom will drop out of the condo market in the not too distant future, IMO.
 

DATYdude

Puttin' in Face Time
Oct 8, 2003
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www.Tarion.com - this is the site for the new home warranty program, has some good information.
 

banshie

Member
Jan 27, 2003
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16
Some time ago my wife and I were considering buying real estate as an investment. (We still are when we ever have the necessary to do this.) Our realtor, who is also a friend, advised us against condos and also apartments in recently developed areas. She advised buying an apartment in Rosedale or Forest Hill. Believe it or not, you can find really good, affordable deals, if you have the patience.

The reasoning behind this is that these areas have strict controls on new, and refurbished development. The problem with buying a condo in a newly developed complex is that, sure as "eggs is eggs", as soon as you move in another block will start to go up down the street, providing significant competition when you want to sell.
 

antaeus

Active member
Sep 3, 2004
1,693
7
38
Buying without an agent is fine provided you know all aspects of real estate transactions: contractual, financial, legal. RE agents are essentially news editors, assembling massive chaotic information and presenting it to you in a somewhat more digestable form, for which they get their 4%. You should also be somewhat familiar with contract law and terms and conditions.

Speaking only in general here: any direct retailer offering a "cashback" is not going to give you an envelope with $'s in it as this is money at its most expensive. At signing time, the cashback will be deducted, become conditional on or applied to upgrade option A,B,C,etc, time dependent, finance company source, conditional warranty extension. Essentially, "cash back" is an extremely loud, neon sign type advertising, ultra low risk marketing sales ploy. It's an elegant example of Joseph Heller's Catch-22 buying eggs at 3¢ selling at 2¢ and making money at it.

Regarding others comments of condo market bottoming out. I have thought so too since they started mushrooming about 5-6 years ago. But I now believe in Toronto-continuum phenomena. TO will continue to grow. Part of that growth will drive some % of the population to want to live/own in city core. Always. With recent government attempts to limit developmental expansion, and more mature economy (from 15-20 years ago) interest rate fluctuation will always probably be ± a few %age points. Therefore, a condo purchase in downton TO will most likely always be a reasonable investment for a long time.

Lastly, I would really study hard any condo's fee structure. I know alot of people, single and couples, who've bought condo's in core last 5 years. All seem happy with them.
 

KBear

Supporting Member
Aug 17, 2001
4,169
1
38
west end
www.gtagirls.com
Condo sale prices have been more or less flat for the last 2 years, with some exceptions depending some on the area. This is based more on west end information. The condo prices move up and down with the rest of the market, you will not see the bottom fall out on condo prices unless the prices drop in the rest of the home market.

The rental market also seems to have levelled out. Buying a property for investment is much different then buying one to live in. For investment, you want to look at how easy the property will be to rent out, and your return on investment when all the expenses are considered.

The market is huge, having a building go up next door will not make any real difference on prices due to the increase in competition. You will see a price change, if for example, the new building blocks the lake view of the existing building.

On deals, there are no “deals�, the system is computerized and the data is widely available. If someone did screw up and put a property on the market for less then market value, another agent would scoop it up, and this is extremely rare. Most often people think they got a deal when they got $10,000 off the list price, but the reality is that the property was likely priced $15,000 too high. Agents have access to all the sales history for an area, and if buying, the buyer should be made aware of this information, and know what a fare price for the property will be.

When buying a condo in a new development you have 10 days to review the condominium documents, and then decide if you would like to proceed with the deal.

On the commissions, 3-8 years ago the builders were offering little or no commissions, and had little interest in dealing with real estate agents. Now they are offering well above average commissions, like the 4% mentioned, plus other incentives.

You can search properties on www.mls.ca
 

blitz

New member
Nov 25, 2003
1,488
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Toronto
read the initial post, didn't bother with the whole thread

don't buy a condo, if you are so inclined buy a loft

ensure that super amenities are available like transit and definately grocery shopping within walking distance

my advice would be to buy property, a house. there are many desirable neighbourhoods in toronto where a little bit of work will make for a much better investment at similar costs to an excellent condo

imho

condos = expense + tough resale

homes = property = investment (easy to rent + resell)
 

FOOTSNIFFER

New member
Jan 23, 2004
1,506
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0
banshie said:
Some time ago my wife and I were considering buying real estate as an investment. (We still are when we ever have the necessary to do this.) Our realtor, who is also a friend, advised us against condos and also apartments in recently developed areas. She advised buying an apartment in Rosedale or Forest Hill. Believe it or not, you can find really good, affordable deals, if you have the patience.

The reasoning behind this is that these areas have strict controls on new, and refurbished development. The problem with buying a condo in a newly developed complex is that, sure as "eggs is eggs", as soon as you move in another block will start to go up down the street, providing significant competition when you want to sell.
Attend Real Estate Investment Network (R.E.I.N) meetings. They give you totally solid fundamental methods to buying real estate. No hype, all facts and it's not that expensive to join. You'll also meet and be able to network with alot of seasoned investors who've been through the mill, and don't mind sharing their experiences with ya.

P.S. Carlyle Dunbar in the investor's digest is pretty certain that the long-standing inverted yield curve is finally going to lead to a recession in the states, and then lower interest rates. I kind of agree with him...there's this nervousness in the air. It's like people don't really believe that the recent dip in the markets are over.
 

21pro

Crotch Sniffer
Oct 22, 2003
7,830
1
0
Caledon East
Bungalows are where the growth still remains. Check out the following ranking of Canada's current hottest markets: (Prices June 2006 compared to June 2007)

The increases in prices for a standard detached bungalow were 55.2 per cent in Edmonton, 29.2 in Calgary, 13.4 in Vancouver, 9.2 in Victoria, six in Ottawa, 5.7 in Toronto and 5.4 in Montreal.

55% 1yr. increase in Edmonton!!!

on the other hand, prices have dropped in the 1st quarter of 2007 in the GTA in Condo's, Condo Townhomes and Adult Complexes.

the average time on market has increased across the board, which tells me that people are greedy and asking too much... even builders are hanging onto old numbers.

I recently looked at a beautiful house on 2.5 acres on Damascus in Caledon East. It was listed in February for $689,000. (CMA average for the area- so it was priced correctly). It being the only house for sale in that high demand area presently made it difficult to predict what it would sell for. It selled last week for $597,000... almost $100,000 below asking... and it was on the market for over 9 months!

On the other hand, there is a waiting list of buyers with cash in hand to buy any bungalow that comes up for sale in that same area.
FOOTSNIFFER said:
P.S. Carlyle Dunbar in the investor's digest is pretty certain that the long-standing inverted yield curve is finally going to lead to a recession in the states, and then lower interest rates. I kind of agree with him...there's this nervousness in the air. It's like people don't really believe that the recent dip in the markets are over.
footsniffer, Those are US predictions. Canada has more in common with Australia right now. It's not lower interest rates on the horizon for us. 10% mortgages are expected by 2011.

and it's happening already, again.
Canadian Press said:
Bank of Canada governor says C$ may be overinflated but hints at rate hike

OTTAWA (CP) - Bank of Canada governor David Dodge has taken the unusual step of weighing in on the surging Canadian dollar, suggesting that the loonie may be higher than economic factors warrant.

However, Dodge also said Wednesday he may have to raise interest rates in July to bring down inflation. Higher interest rates would tend to further increase the value of the currency.
One of the competitive lenders out there, PresChoice financial's mortgage rates for the past 6 years:

01/2002 3.75
06/2002 4.25
01/2003 4.50
06/2003 5.00
01/2004 4.25
06/2004 3.75
01/2005 4.25
06/2005 4.25
01/2006 5.25
06/2006 6.00
01/2007 6.00
06/2007 6.25
expected in July 07 - 6.75% - might climb higher. These are 2 year fixed rates, with PC Points Plus.

Looking at those figures, one can see that the sudden rise in Days On Market stats coincide with the jump from under 5% Fixed Rate Mortgages to Above 6% FRM's in less than 10 months.

going from 4.25 to 5.25 is an increase of around 20% on someone's mortgage renewal if they are in the first 4 years of a 25 year mortgage.

ie, an $1800/mth mortgage payment jumps to $2160/month + property taxes.

Also, the timing is perfect for explaining the reasoning behind why Banks are now putting Mandatory holds on ABM deposits. Didn't you notice this? This is because people are putting in empty envelopes as deposits to cover there mortgage payments and avoid defaulting. This is fraud and becoming a huge problem. Especially in Brampton, Woodbridge and other new suburbs of the GTA, where families were given larger mortgages than their income can support.
 

21pro

Crotch Sniffer
Oct 22, 2003
7,830
1
0
Caledon East
you won't hear any realtor tell you this but,

through ANY 25 years in the last 93 years (since this stat was tallied), no average housing appreciation averaged more than the average mortgage interest rates during that same period.

in English that means, you'd be better to lend your money out in mortgages than own a house. a case of the house always wins?
 
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21pro

Crotch Sniffer
Oct 22, 2003
7,830
1
0
Caledon East
residential real estate prices, in real terms, rose by all of 66% between 1890 and 2004, or by just 0.4% a year. All the more remarkable, then, that between 1997 and 2005 they leapt by 52%, or by 6.2% a year, also in real terms.

Affordability is way down and units offered for sale are way up. The cost of carry is way up and transaction volumes are way down.

the fact of the matter is that the recent boom from 1996-2006 is the most rapid rate of price growth relative to inflation in history.
 
Ashley Madison
Toronto Escorts