August 9th, 2022 | Buying

Upsizing In Toronto? Here’s What You Need To Know So You Don’t Overpay

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Are you thinking about upgrading your home in Toronto? Now is a better time than at any point in the last two years. Housing prices have finally come down from their record-breaking peak back in February. However, there’s no way around the fact that real estate here costs a pretty penny. The average price for a detached home now stands at around $1.7 million. A townhouse is a little less, coming in at an average of $1,027,050.

We expect that the market is in a temporary lull while people adjust to the higher interest rates. Even so, Toronto remains one of the most desirable cities in Canada, so prices will likely go back up again once the dust settles. 

With housing values as they are, it’s important to ensure you get your money’s worth and don’t pay more than you need to upgrade your home. Finding a deal may take a bit of effort, but it is well worth it when you find your dream home. These tips will help you get the best value possible for your money:

Patience Will Pay Off

Now that the market has cooled off, many buyers have breathed a sigh of relief, and not just because prices have come down. More listings are now available, 42% more compared to last June when we experienced a severe shortage. 

Now, you can afford to be patient and make your purchasing decision very carefully. You can take the time to view multiple houses with no need to get caught up in bidding wars. You may find that some sellers are even open to negotiation. If not, you can move on to the next listing.

Nothing will help you get a great deal like keeping up to date with shifts in the market. Signing up to our newsletter is a great way to stay informed!

Know The Market

In some pockets of the city, you might still encounter high demand and bidding wars. If you want to live in a trendy area, this is just a fact of life. However, Toronto is a vast city with plenty of beautiful houses and good neighbourhoods where the competition has dropped off considerably.

The other thing to be aware of is that many online listings you see are drastically overpriced. Some homeowners are still trying to command February prices even though the market has shifted. 

A little background research will pay off and help prevent you from making a very expensive mistake. See if you can do some digging into what homes in that area typically sell for and how long they stay on the market. The age of the house and any recent renovations or upgrades could also affect the price. Your real estate agent can help by performing a thorough market analysis to ensure the listing price is fair.

Do you want some background knowledge of what’s happening in the market today? Here are some other posts on the topic:

Get Pre-Approved

When upgrading to a more expensive home, you may need additional financing over and above the proceeds of the sale of your current house. In that case, your first call should be to a trusted mortgage broker to get a pre-approval. Your real estate agent will be able to provide you with a recommendation if you don’t have someone in mind. 

A pre-approval offers many benefits. First of all, it helps you enjoy a successful purchase while staying within your budget. You will know what you can afford so you’re not tempted to overspend.

Getting pre-approved ahead of time can also give you a competitive edge and help you save money. A seller is more likely to accept an offer from someone with proof that they can pay even if another buyer offers a higher price.

You may also save on interest because you can lock in the lowest possible rate for 90 to 120 days. If rates go up before you buy, you’re protected. And if rates decrease, you’re automatically entitled to the lower amount.

Look For The Time On Market

The longer a house sits on the market, the more likely there will be a price reduction. The seller might become frustrated and more eager to sell. They may be open to offering you a lower price or more favourable terms.

You can also ask your real estate agent to find back-to-market listings. These are homes that didn’t sell the first time and have since been relisted, possibly at a reduced price! 

Consider Buying A House With Minor Flaws

Your best chance at finding a great deal just might be to accept a house with minor flaws that you can easily and inexpensively fix. How do you spot these hidden gems? Look for signs that the owner is no longer interested or able to keep up with the maintenance. 

Maybe the grass is too long, or there used to be a garden that now looks neglected and wild. 

The inside of the home may be badly in need of a paint job, or you may need to reseal the bathtub. Cosmetic flaws can be off-putting, but you’ll be amazed at how much brigher and newer the home will appear after some minor repairs. 

However, you should always request a home inspection before committing to the purchase. You want to ensure those “minor” flaws are strictly cosmetic and not indications of serious underlying issues that will cost you a fortune to fix after moving in. 

Undervalued houses don’t come up very often, but a local real estate team will keep an eye on the market to help you find them.  

Do you have more questions about buying in Toronto? Here are even more resources to help you:

Always Work With A Buying Agent

Some people avoid working with a real estate agent because they are afraid of the commissions. However, it’s the seller who pays, not the buyer. A buying agent will guide you through your purchase, letting you know if the house you’re interested in is really all it seems. If your agent has experience in your area, they know what to look for, will negotiate on your behalf and can often connect with sellers who are motivated to sell quickly.

Do you have any questions about buying in Toronto in the current market? We offer free consultations for buyers with no obligations. Book your meeting below.