How to Buy Toronto Real Estate in 2020

How to Become a Better Buyer in the Toronto Real Estate Market

True fact: Toronto real estate is one of the most sought-after markets in the world. It moves fast. So fast, that some listings are only up for less than a week before being sold. This doesn’t make buying or investing in property an easy thing to do! But there are ways buyers can win, with a few simple tips and tricks.

1. Hire a Great Buyer’s Agent Who Knows Toronto Real Estate

The first step to winning as a buyer in Toronto real estate might not come as a surprise. Kick things off in the right direction by hiring a great buyer’s agent that specializes in the neighbourhoods you’re interested in. You need an advocate that knows what they’re doing. We suggest interviewing multiple buyer agents to get a sense of their experience, expertise and general vibe before heading out to see properties. Get curious about your buyer agent’s skills. How do they add value to the process, provide insight into property value or understand the latest on development applications in your area of interest! You should consider:

• Did your potential agent come prepared to your first meeting?
• Have they been in the business long?
• How many transactions did they do last year?
• Are they full- or part-time agents?
• How many buyer clients does your agent take on at one time?
• Do they have a team for backend support?
• What area of the city do they work in?
• Do they specialize in condos, freeholds or both?
• Are they strong at pricing and evaluating properties, with market knowledge and analytical skills?
• Have they bought and sold real estate for themselves?
• What is their preparation for multiple-offer scenarios?
• What do they find challenging about working with buyers?
• Are they a good listener? Do they take notes?
• Do they follow-up with an initial action plan to kick start your buying plans?
• Are they asking for a Buyer Representation Agreement before your first showing?

You spend a lot of time with your agent throughout the buying journey, so you should probably like them, to say the least! Out of 56,000 Toronto real estate agents, the good ones stand out. If you have someone hustling on the backend, you’re already miles ahead of the competition.  

2. Get Tactile

As a buyer client, you should be willing to roll up your sleeves and put the work in! This means, getting out there and seeing properties in the flesh – kind of like dating!  

While it’s fun to look at properties online and evaluate pros and cons by flipping through thumbnail size images (ehhh-emmm, just like Tinder), this really doesn’t help you see what may or may not work for you. Photos can certainly guide you to a colour palette you’re drawn to or the dream kitchen you’ve been imagining for the last few years. But they certainly won’t help you assess what will work for you, your family or your budget. Here is a list of things that may inspire you to get off your House Sigma App and into the car with your kick-ass agent to go see some properties:

3. Drill Down On What You Actually Want

You’re officially off your Realtor.ca App and looking at properties! And, because of this? You’re already becoming a better buyer in the Toronto real estate market and we’re super proud.

Since you’re putting the work in, it will become much easier to adjust your wants and needs list. You’re ready to start shifting your expectations up or down depending on your budget, neighbourhood requirements or ability to renovate a fixer-upper. In this phase of the process, you’re going to quickly learn about the value of properties, market speed and difference between a glossy, staged property versus an older home that might just need a coat of white paint! 

It’s our recommendation that you start tracking properties (side-by-side with your super helpful agent) with this guideline in mind:

• Rate the property out of 5 (the best being 5)
• What did you love?
• What did you not like as much?
• Was there a deal breaker (i.e. unfinished basement, no parking, etc.)?
• Anything notable in regard to condition of the home or condo?
• What was the property listed for? 
• How many offers on the property, after how many days on the market?
• What was the final sale price?
• Are you willing to spend that amount on this home?

Once you have seen a nice sum of properties, it will be become easier to figure out what type of property matches your requirements. Sometimes, what you think you wanted when you started your search changes after a few times out on showings. This is totally normal! Keep working towards narrowing down your search. So, when you step into that perfect home or condo, you’ll be ready to make your move without questioning your decision to move forward with an offer.  

4. Practice Your Offer Paperwork in Advance

So, you’ve been a great worker bee – getting out there, seeing properties, evaluating their pros and cons, tracking sale prices…and boom, you found something you LOVE but you have to offer on it today! Eeeek! This can be very terrifying if you’ve never done it before – the offer paperwork, agency documents, and deposit cheque requirements! This can all be very daunting, especially when you’re working under pressure. But there is a way to make this phase in the process far less stressful and far more educational if you’re one step ahead (and again, working with a qualified buyer agent that you interviewed a few months ago). If you practice a mock-offer scenario well in advance of your first “real-deal” offer, you’re going to be a super pro by the time you have to put the pen to paper. 

It’s our gold-star approved suggestion to review all of these documents with your buyer agent in advance of your first offer:

• The Form 801 
• Confirmation of co-operation 
• Agreement of Purchase and Sale 
• Schedule B
• Buyer Representation Agreement 
• Worker with a realtor
• Acknowledgement of conditions in offer 

In addition to reviewing offer paperwork, triple check with your mortgage broker that you can offer on a property without a condition of financing (and, please get this commitment in writing).  

You’ll want to make sure you have access to your deposit cheque funds. Despite our best efforts to remind buyers that they will need access to “cash”, it’s often forgotten. And all of a sudden, panic happens while trying to release funds from RSPs or mutual funds!  

5. Don’t be Afraid to Overpay

Last but not least, don’t be afraid to pay more than what something is worth on paper. This is where Toronto buyers get in their own way, far too often!

Obviously, it’s smart to understand the comparable sales, price per square foot and neighbourhood sale averages. And of course, we want you to bid within reason to ensure that your mortgage appraisal will come within range. We’re talking about being smart, strategic and SAVVY! 

When you’re generally bidding against other buyers and you want the property, you need to be aggressive. This means a clean offer (no conditions) and a strong, healthy price. So many buyers over-analyze what something is worth and refuse to “up their game”. This is when you will lose. And, when you lose, you will generally lose by a landslide against the winning bid. Take a look at this example:

• If you’re planning on taking out a $600K mortgage, you’ll be paying approximately $2,514/monthly on a 5-year 2.97% fixed rate (30-year amortization).
• Now, if you increase your offer by $20K, you’re taking out a $620K mortgage. That means, you’ll be paying $2597/month at the same rate.

The difference is only $83 dollars per month! That’s it. We’re not telling you to add $20K to every single home or condo you bid on, but when you think about amortizing your payments to up your offer price, it’s really not going break the bank as much as it feels.

And yes, no one wants to feel that they overpaid. But in most cases, you’re going to have to if you want to win so you might as well get ready for it now. Don’t forget, the Toronto real estate market continues to appreciate. In 12 months, 5 years or 20 years, you’ll look back and think that you scored your golden piece of real estate for dirt cheap! 

Start Getting Ahead in Toronto Real Estate

Would you really take swimming lessons from someone who’s never jumped into the deep end?

Neither would we. Fox Marin has made plenty of waves in downtown Toronto’s buying market. And, our commitment to you is to bring that experience to the exact process of finding a new home. That’s what you can expect when buying with FM.

Whether you’re a first-time home buyer, a seasoned flipper, or somewhere in between, you can trust our team to guide you through the dynamic experience of buying property, while delivering unparalleled professionalism, integrity, service, and the right amount of personal TLC with every interaction.

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This article is written by Kori Marin, Managing Partner and Broker at Fox Marin Associates. With a passion for Scandinavian design and all-things-Toronto, Kori brings her own brand of charismatic energy, creative integrity, and expertise to her work.