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Summer is a Great Time to Buy

Summer can be a great time to be a buyer in the resale market. There are a few months a year where the market cools down long enough to actually create the right conditions for a deal to be had. The first is obvious to most people: December and January when everyone is distracted by the Holiday season and then the winter hibernation sets in. But I find many buyers are surprised when I tell them that often great deals are had in July and August too.

The reasons are quite simple:

1. Summer Vacation. Many buyers and their Realtors are not working in the summer and buying property gets pushed to the sidelines. Fewer buyers = less competition.
2. Leftovers. Many of the listings on the market in July are those listings that are ‘left over’ from the spring market of April, May, and June. The longer a property is on the market, the more likely the seller will come down from their list price (generally speaking).

Last summer was a GREAT buyers market. Right after the HST rush was over, July produced some memorable sales across the city that I still scratch my head at when doing market research for my clients and comparing current listings with past sales. Many people thought the sky was falling last year and many buyers who stuck around after June 30th got some amazing deals by today’s pricing standards.

While your friends are out sipping cold beers on a patio somewhere downtown, keep focused and make sure you have a vigilant Realtor working for you and you just may nab yourself a nice find this summer!  You’ll be glad you did when the fall comes and all your beer drinking friends are fighting for condos in bidding wars once again.

Thinking of buying a condo this summer? Let’s talk.

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Time to get Creative

The market is hot. Sellers are still driving the bus in this market and so when I’m working with buyers I often have to get very creative to get my clients what they are looking for. After viewing 6-8 condos with my buyer clients, I can usually figure out exactly what condo would be perfect for my buyer client. But what if this condo is not for sale? How do you buy a property that is not for sale?

I’ve been working with one buyer downtown for the past few months. Let’s call him MJ. MJ owns a condo townhouse near Yonge and Eglinton that has appreciated significantly since he bought it and he’s looking to sell and move downtown. After seeing several units in different buildings and in different areas, MJ narrowed it down to 2-3 buildings he liked and was looking for a 2 bedroom unit up to around the mid $500s. Problem was, there was nothing available for sale. We waited. We waited some more. Nothing was coming up in these buildings. Frustration was starting to set in. Time to get creative.

Some agents will solicit listings by  flyering or directly sending letters to specific units in specific buildings. The message being, “I have a buyer who will buy your condo for top dollar!”. I suspect this approach is not very effective as it inherently reeks of ‘spam’ mail. I decided to take a different approach.

There just so happened to be a unit FOR LEASE in the exact building that MJ was very keen on, and this unit’s floor plan was one he had seen before and liked it. I called up the listing agent for this unit that was for lease and asked if the seller had any interest in selling instead of leasing it. He said unlikely since he just bought the unit last year. I let him know MJ was a serious buyer, and low and behold after a few phone calls back and forth, we submitted an offer in writing and that offer was accepted! MJ was thrilled that he found a great condo in a great building and he did not have to go through the pain of a bidding war to get it! He’s now getting his townhouse at Yonge and Eglinton ready for sale.

Thinking of buying or selling a condo this spring? I’d love to help you achieve your real estate goals. Contact me to discuss.

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Sometimes The Best Deals are NOT Advertised

New condos are launching at a rate of about one per week right now in the downtown core. However, don’t be mistaken in thinking this means solid investment opportunities are coming at a rate of one per week! In fact, there is usually a negative correlation between the number of new condo launches and the number of quality investment opportunities available. The opportunities are actually quite rare right now in my opinion. There are only a handful of projects that I am comfortable in recommending to my buyers and investors.

As with any other product or service, the best deals in real estate are often unadvertised. If you see a billboard or glossy ad in a magazine proclaiming the “suite of the month” or “special offers on now”, chances are there is no deal to be had here. You won’t find the best deals on a billboard or in a glossy magazine or taking up a page in the Globe and Mail. As with any other product or service of any value, the best deals in real estate are often the unadvertised ones.

This past weekend, some of my investor clients were able to take advantage of such an opportunity at a A1 condo project downtown. I received nothing more than a good old fashioned phone call from one of the developer’s sales reps informing me that if the developer sold a certain number of units in a certain period of time they would get a better rate on their construction loan. The developer was motivated and thus, offered significant CASH discounts off the list prices of their remaining inventory. Not a dime was spent on marketing or advertising this deal. The only people who heard about it were a handful of Realtors like myself who were called directly. My clients are very happy and the deal is now done. Prices are back up to the list prices.

My reputation and track record as one of the top Realtors downtown for pre-construction means my clients get access to these exclusive, unadvertised deals from time to time. To get on my list for these types of deals in the future, simply contact me and I will be happy to include you on future opportunities.

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One Came by Fax

The spring market doesn’t officially start until, well, spring. But anyone who is shopping for a condo (or a house) in Toronto knows that the market is H-O-T right now, and multiple offers are not the exception, but the norm. Over the years of working with buyers and sellers in multiple offer situations, you learn a few tricks. If you are a buyer in a multiple offer situation, there are four sweet words you should love to hear:

“One came by fax”

Sending an offer by fax in a multiple offer situation is the real estate equivalent of ‘mailing it in’. The agent is essentially saying, my clients’ offer is not strong enough to stand a chance of actually being the winning offer, so I’m not going to waste my time by actually showing up for the offer presentation.

At the precise time of bidding, make sure you find out a) how many offers there are on the property and, b) how many are being presented in person vs. by fax/email. If you hear some or all of your competing buyers are submitting their offers by fax, consider your own offer carefully before submitting! You don’t want to be the offer that makes the seller’s say “One offer came in and blew us all away!” (Side note: Sellers-NEVER say this in front of a buyer or buyer’s agent). For example, if there are 3 offers, and you are the only one who shows up in person to present your offer, there is a good chance the other two offers are going to be weak ones, so consider your offer price accordingly. An in-person buyer is a much more motivated and serious buyer than one who is not present (as a general rule).

When I hear an offer was faxed in, I will automatically discount that offer when advising my buyer-clients on an appropriate ‘winning’ offer price. This is more relevant when in an offer situation with 2-4 offers, but it becomes less relevant when there are 5+ offers.

Questions or comments? Please contact me.

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Are 8-Foot Ceilings a Deal Breaker?

Ceiling height is usually one of the last things a first time buyer thinks about, and one of the first things a repeat or move-up buyer thinks about. Why? Well, it’s something that makes a huge impact on the ‘feel’ of an apartment, but most people who have never owned a condo or loft take it for granted that their condo/loft will have high ceilings – not necessarily. When it comes to pre-construction or resale, are 8′ ceilings a deal breaker?

I posed this question on Twitter yesterday and got a couple responses from the Toronto real estate community. @symmetrydevelop said low ceilings are a deal breaker because volume of space is vitally important. @buzzbuzzhome made the point that low ceilings can work in a space that is wide and has floor to ceiling windows. I’d have to agree with both comments. Volume of space, not just floor square footage, makes a very big difference in how a suite feels, but at the same time, so does layout and window placement/height.

The reality is that I would wager to say that the vast majority of downtown buildings have 8′ ceilings today. This is mostly because most of the existing stock was built 10+ years ago. It wasn’t until the past 5 years or so that 9′ ceilings and ‘soft loft’ living has really taken off and now buyers basically EXPECT 9′ ceilings (whether they realize it or not). That being said, the buildings that are the best selling buildings today and have the highest appreciation rates tend to be the ones built in the last 5 years and they tend to have 9′ ceilings (or higher). Some A1 buildings that actually do have units with 8′ ceilings include King’s Court (230 King st E), One City Hall (111 Elizabeth), and The Mosaic (736 Spadina).

I suspect that as the condo market continues to evolve and buyers continue to demand more and more for their money, 9′ ceilings will become standard and 10′ ceilings will be the next obvious step (although it may take some time). Buildings like Theatre Park are already lauding that many suites have 10′ ceilings, and many ‘penthouse’ level units in pre-construction are 10′ ceilings.

Quick tip for buyers, don’t assume because a building has some units with 9′ ceilings that all units have 9′ ceilings. Many buildings have lower ceiling heights on the lower levels and as you rise up the building the heights go up too.

Questions or comments? Please contact me.

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Top-10 Tips for Doing Your PDI

Congratulations-your condo is ready for occupancy! Now it’s time to do your PDI (pre-delivery inspection). You’ve probably been waiting as long as 4 years for this, and now it’s finally time to take possession of your new home or investment property. Your PDI is your opportunity to see the condo for the very first time and walk through the property with the builder’s representative. The main purpose of the inspection is for you as the purchaser to make a list of all the deficiencies (damaged, incomplete, or missing items, as well as anything not functioning properly) present in the property. Here are some tips to get the most out of your PDI:

1. Don’t rush it. Take your time and go through your unit carefully. It’s likely one of the largest investments you will ever make, so get to the appointment early and be in a good frame of mind to inspect your unit.
2. Be nice. Make friends with the developer’s reps when doing the inspection because you are going to need their help to make sure your requests get addressed after the fact.
3. Focus on the most important rooms. The kitchen is #1 and the bathrooms are #2. Spend most of your time here.
4. Focus on the details. Open every cabinet. Pull every handle. Close every door. Turn on every faucet. Flush every toilet. Anything that moves is most likely to be installed incorrectly or broken.
5. Consider bringing someone with you. It can be helpful to have another set of eyes
6. Don’t hire a home inspector. Home inspectors are not trained to inspect brand new condos, they are trained to find problems in old homes. Save your money.
7. Read through your APS before your PDI. Your agreement of purchase and sale contains a detailed list of all the finishes and features of your suite. Compare what you see with what was promised you and make sure you are getting what you paid for.
8. If you miss something, you have the 30-day form. After you take possession, if you find a ‘deficiency’, you can go through TARION.
9. You don’t want to go through TARION for anything. Just google a few terms like ‘trouble’ or ‘failure’ + ‘Tarion’ and you will see what I mean. Spend your time and energy to get things done through the developer.
10. Pick your battles. If you do have issues with your condo after you take possession (and you most likely will), pick your battles carefully and focus on the most important issues, knowing that you are never going to get a 100% perfect unit.

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Top-5 Things to Know about Buyer’s Remorse

So you bought your significant other a sweater the week before Christmas to give as a gift on December 25th. Then while you were out at the same store this week you noticed that same sweater is now 50% less than what you paid for it! This is a perfect time of year to talk about buyer’s remorse!

Here are the top-5 things every buyer, seller, or investor should know about buyer’s remorse:

1. Everyone gets it. It does not matter if you are buying your first property for $200K, or your 10th property for $2M, everyone experiences buyer’s remorse when purchasing real estate. It’s a perfectly normal emotional state to be in, so if you are feeling it, relax! You’re normal.
2. It comes in waves. Buyer’s remorse usually isn’t just a one-time feeling the morning after you signed an agreement of purchase and sale. It comes in waves and hits you at different times and with different negative thoughts.
3. It goes away. Yes, it goes away in almost 100% of all cases! When buying for yourself, the simple act of moving into a property and making it your home is the most effective antidote to buyer’s remorse. When buying for investment, as time passes by and the property appreciates or the cash flow starts to come in, soon you will be looking for your next investment property to purchase.
4. Seller’s get it too! Yes, you are not alone in this weird mental state known as buyer’s remorse. You are thinking you bought the wrong property, or you are worried you overpaid for it, while the seller is worried they sold it to the wrong person or they didn’t get enough for it. Seller’s are not immune to this feeling, and the sheer amount of money involved in most real estate deals makes everyone involved lose a little sleep from time to time.
5. It’s almost always irrational and emotionally based. Buyer’s remorse is an instinctual process our minds take us through as a means of self-preservation when we make large (or sometimes very small) purchases. But almost always the thoughts our minds have are irrational and we try to illicit an internal emotional response to solidify the purchase as ‘good’.

The best advice I have for my buyer clients who are going through the ups and downs of buyer’s remorse is to trust their initial gut feeling. In my experience, your initial gut feel for a property (once you have been educated on the market in general and are ready to make a decision) is the most accurate measure of how you really feel about a property. As much as we try to rationalize the buying and selling of real estate, it will always be an emotional process to some extent! Questions or comments? Contact me or leave a comment below.

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Selling Your Condo: MLS Listing or Exclusive?

When listing your condo for sale with a Realtor, there are two main options for what type of listing your property will be: MLS Listing or Exclusive Listing. That’s right, you can sell your condo using a Realtor without using the MLS system. Selling exclusively means you list with one brokerage and give one brokerage the exclusive right to market, show, and sell your property. MLS listing means any Realtor from any brokerage can show and sell your property (and in some cases advertise it as well).

As a seller, you might think, why would I ever not want to take advantage of the MLS system with its massive exposure to buyers and Realtors across the GTA, by listing my property exclusively with one brokerage? There may in fact be several reasons, for example:

1. Individual privacy. Your name is published on MLS listings (at least in the ‘back end’ system that all Realtors have access to). If you are a public figure you may not want 30,000 Realtors in the GTA seeing that your house is up for sale and booking a visit ‘just to look around’.
2. Shhh…Don’t tell the neighbours. For a variety of reasons, sometimes you just don’t want to announce to your neighbours that you are moving. Putting your property on the MLS is a sure fire way to let them know. An exclusive listing
3. Pre-arranged transactions. Many exclusive listings are sold before they are actually listed. These are cases where a Realtor connects a buyer with a seller behind the scenes, puts together a deal, then simply ‘lists’ and reports the sale on the same day.
4. Limited showings. Listing exclusively likely means you will not get as many showings as you might with an MLS listing, but it also means the showings you do get are likely very serious buyers and targeted buyers. These are people who have received personal invitations from your Realtor to view the property, or they are likely clients of your Realtors’ brokerage. It also means you won’t have any looky-loo neighbours coming by to see how you’ve arranged your furniture and how your bathroom reno turned out.

Listing exclusively is not for everyone, in reality it is a solution for a very small percentage of sellers, but there are clearly valid reasons for this option. If you are interested in listing your condo exclusively, contact me today to discuss this option. My brokerage, Re/Max Condos Plus, is one of the few brokerages in the city that has the size, specialization, and enough ‘top-gun’ agents on the roster to get exclusive deals done quickly and efficiently.

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It’s Christmas Time For Resale Buyers

Resale buyers, now is the time to get out there and shop for bargains. Historically, there is no better time to be a buyer than in December (and January to a lesser extent). This is when the market activity is usually at its lowest point of the year, and for sellers who missed out on the busy fall market, the clock continues to tick.

Many of the properties that are on the market in December were listed back in the height of the fall market – October, and some go back to September. These sellers are often just waiting for an offer, any offer, and often properties sell for much less in December than they would have in October, or than they will in February.

Every year I preach this message to all my resale buyers, however, most buyers are just too busy this month to think about real estate. December is a month full of Holiday/Christmas parties and social gatherings, and most people just go into ‘survival’ mode, waiting for the month to be over so they can return to regular life. But for those who do understand the opportunity, and are ready to ‘hit the streets’ and scour the MLS for properties, they can save thousands.

Ready to go bargain shopping? Contact me to start your condo search today.

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Investor Mentality

In contrast to yesterday’s post, “Losing Mentality“, I wanted to present to you some observations about the people who are successful condo investors. Those who buy (and sometimes sell) multiple condos over years and understand that condos as a great way to accumulate long term wealth.

1. They are entrepreneurial. Either they run their own businesses, or they can at least think like a business person. They treat buying and selling condos as running a micro-business. Money in + time + effort = Profit
2. They are risk takers. Buying a piece of paper and hoping it turns into a highly profitable asset is RISKY. Either embrace the risk, or put your money in the bank at 1%.
3. They don’t follow the flow. Simply put, if your mom/friend/uncle/blog-comments-section tells you shouldn’t be investing in condos because ‘there are too many condos downtown’, you are listening to the wrong advice.
4. They are focused. They decide what they want before they go looking for it. They don’t consider every development and project that appears just because it is the ‘flavour of the week’. They have a set of criteria and they stick to it.
5. They have money. Let’s face it, most people don’t have the typical 15-20% deposit required to buy most pre-construction condos. Those that do and have invested it in condos in Toronto, have done very well. The rich are in fact getting richer.

Some exhibit these characteristics on their first purchase, others learn them in time. Most of these can be acquired and practice makes perfect, but at the end of the day, you either have the stomach for condo investing or you don’t. I’d love to hear your comments and thoughts. If you are a seasoned condo investor, or want to learn how to become one, let’s talk.

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