Tips for buying a condo

September 1, 2009 2:24 PM

Insider tips for buying a condo in Toronto?

How come the Condos in Toronto downtown are going for above the listed price these days?

posted by page123 to home & garden (5 comments total)

Yeah, I know, a little strange. When I bought and when my friends bought anywhere from 2-7 years ago, you purchased for below asking. My friends that have then subsequently sold in the last 18 months were all instructed by their real estate agents to set a price below what they could get and instigate a bidding war. Why the strategy has changed, maybe someone who works in Toronto real estate can answer.
posted by meerkatty at 2:51 PM on September 1

I'm not an insider, but I think it's once again the practice to list condos a little low in order to provoke bidding wars. This went away during the slump, but I've seen reports of bidding wars over houses again so it was just a matter of time before it happened to the condo market.

Here's a Star article from last month that describes July as a record-setting month. My decidedly amateur analysis: during the worst of the slump, people held off on buying and/or selling. Now there's a pent-up demand and as people are getting more confident, house/condo sales are picking up again.

In terms of tips for buying: it really depends what you want. Are you looking for a home, or a place to flip in three years? Do you want to move in immediately? Your best deals are arguably in buildings that haven't been built yet, but it will be a few years before you can move in, and there's always the danger that the building won't be built (ref: One Bloor) or will be a lemon. Don't be afraid to look at older buildings, some of the units have been redone by previous owners and can be quite nice.

Also: location, location, etc. Buying on the subway line will cost a premium, but may be worth it if you can get rid of your car. Even going ten minutes walk away from the subway may lower the price you pay. If you're willing to live in North York or in the east/west ends of the city, you may be able to get more condo for your money.

Specific to condos: study the corporation's budget for the last couple of years. Were there a lot of unexpected common repair expenses? Has there been a reserve fund study done? Do you want to pay to maintain a pool/underground parking/what have you? Is the maintenance fee high enough? In my experience, the fees at older buildings are higher but more predictable. Newer building often have artificially low condo fees that have to be jacked up in the first few years to meet reserve fund requirements.
posted by flipper at 2:56 PM on September 1 [1 favorite has favorites]

Talk to film crew members who have been all over industrial areas of Toronto that are in favour for loft conversions. They'll tell you where the PCB barrels are buried or still left out in the open.
posted by maudlin at 3:06 PM on September 1

The real estate market in Toronto is really hot right now. Interest rates are low and everyone knows they're about to go up; so everyone's trying to buy now.
posted by Hildegarde at 3:44 PM on September 1

Listed price is only indirectly related to the actual market value of a property. A good agent can tell you what similar properties are actually selling for. List price is just a marketing tool and in this case it seems like agents all have the idea that listing low to encourage a bidding war is the way to maximize the sale price. Toronto real estate has been hot for a while and short a huge correction of some sort it's going to continue to go that way.
posted by GuyZero at 4:06 PM on September 1