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How To Buy a Condo in Toronto And Not Lose Your Mind

How To Buy a Condo in Toronto And Not Lose Your Mind

Four months into the craziest Toronto condo market we've ever seen and most Realtors and buyers have realized that the buying tactics that worked a few years ago, fall short in this market.

As a buyer, if your search parameters match the thousands of first time buyers that are dominating the market right now - which is pretty much all stylish Toronto condos for sale under $500k with low fees, in any decent 'hood within 20 mins of downtown - you could be in for a rough ride without a Condo Pro on your side.

Just as important as hiring an expert though is prepping yourself financially and emotionally for the kind of decisions you'll have to make - many at break-neck speed if you want to win a bidding war. And that's understandably nerve-racking; this is likely the biggest purchase of your life thus far. But the experience needn't be hair-pulling either. There is a condo out there for you if you're truly ready to make the move.

Here are our top tips for making sure that you're both ready and able to buy a condo in this crazy, hot real estate climate.

Tips to Help You Buy a Condo in Toronto's Red-Hot Market (& Keep Your Sanity)

Be Flexible On Location But Not On Lifestyle

We all know the old adage location, location, location but the reality is that, in today’s market, you can’t always get what you want when it comes to neighbourhoods.

There are some neighbourhoods that are simply inaccessible budget-wise for some clients. Maybe they primarily offer larger, luxury condos (such as areas like Casa Loma or Forest Hill) or because the neighbourhoods are still burgeoning in their condo scene and the area's rising popularity is out-pacing condo development (like what we're seeing in Roncesvalles and the Junction where bidding wars are on the rise).

Put Yourself In a Situation Where You Can Make a Low- or No-Condition Offer Should You Wish To

This one's not just a nice-to-have these days, it's a must-do. You must get pre-approved on your mortgage before you start actively viewing properties.

Remember to keep your approval active because it will come with a deadline attached to it. Work with a seasoned mortgage broker to get the expiry date pushed back as far as possible. It's a competitive market for lenders as well and so many will offer greater flexibility to sign you as a client.

See a No-Hold Listing You Like? Jump On It. On Day One.

It used to be a rare situation where a condo for sale in Toronto had a hold for offers date attached to it, i.e. a set offer date when the seller would accept and review offers. It's commonplace in the housing market of course (and one of the tactics, along with under-listing, that fueled the growth in aggressive bidding wars) but it's now becoming much more common with condos too.

Sellers will put a hold on accepting offers for at least five days to allow for a high number of viewings and, often, an open house. Bully offers (where someone swoops in and presents an offer ahead of that date that's too good for the seller to turn down) are also on the rise with condos and, unfortunately, the seller's agent doesn't always let the buyers' agents (who've expressed an interest in the property) know. And so you may not even have an opportunity to try and beat a bully bid.

With a Condo Expert who has a deep level of experience and knowledge in the condo market, you stand a much better chance of winning a bid. But even with a great agent on your side and all your ducks in a row, you may still find yourself on the losing end. After months of active searching and one or more emotionally-fueled lost bids, a buyer may feel like throwing in the towel. But don't lose the condo faith. Remember how much you stand to gain personally and financially with the right condo purchase.

Go for Condo B on Offer Night

If you are in a multiple bid situation on a condo and on the day of the bid, it looks like you have stiff competition (your agent will feel this out for you), consider going for option B if there is one.

When you start your property hunt, you'll see days of the week patterns with when new listings go live and when offer dates typically happen (usually on a Monday or Tuesday night, allowing the weekend to pass for a higher volume of viewings). It's not uncommon that we have clients who are interested in two condos, both taking offers on the same night. They have to pick one (don't ever offer on two lest you win both bids!).

If option A is not looking good but option B is looking viable, try not to let emotions take over and choose your condo with a clear head. Option A may have a nicer kitchen but if you don't stand a decent chance at getting it, you'll end up losing two condos you like by not being pragmatic.

Don't Get Into Emotional Bidding Wars

This one works both ways - over-bidding emotionally on a condo purchase you may come to regret out of frustration or getting caught up in the heat of the moment OR under-bidding when all of the comps and everything your agent is telling you on bid night points to you not standing a chance at closing the deal. Both of these things can hurt you in a market as hot as this.

Have a read of our previous post on how to win bidding wars to find out why.

Lead image copyright: Gustavo Frazao from Shutterstock.