Deciding to buy a house or condo is a huge decision so it’s normal to have some concerns. Today, we’ll address the top concerns we hear from Toronto first-time Buyers.
What if I buy now and prices decrease?
The number one concern from first-time home buyers is the fear that prices will go down. What if I buy a condo for $450,000 today and the real estate market softens and it’s only worth $435,000 in 6 months? Reality Check #1: you’ve only ‘lost money’ if you sell your condo for $435,000 in 6 months. Reality Check #2: you’ve only ‘made money’ if you actually sell your condo too. It doesn’t really matter what happens to the real estate market statistics unless and until you plan to sell. And hopefully if you’re getting into the market today, you aren’t planning on selling anytime soon. Long term investing is always the best strategy (and not just for real estate).
Should I wait until prices go down?
People have been waiting for real estate prices in Toronto to fall for years. Year after year, they pay rent and they wait (all the while get priced out of the market). True, we may see a slight price correction in some markets and neighbourhoods in 2013 and that might mean you can get more for your money, but how will you know when the bottom has been reached? How will you know it’s time to stop waiting? Reality Check #3: We only know we’ve reached the bottom (or top) AFTER it’s come and gone. Timing the market is dangerous and almost impossible to do.
Can I afford to buy a property in Toronto?
Buying a Toronto condo or house is expensive and you need to go in with your EYES WIDE OPEN. First time buyers need to be fully aware of the Closing Costs and be prepared to pay condo fees, taxes and a lot of other expenses that you don’t currently pay your landlord. A good REALTOR will arm you with the costs (both closing and monthly) so that there aren’t any surprises. Reality check #4: Never, never, ever buy as much house or condo as the bank thinks you can afford.
Should I wait for the land transfer tax to be repealed?
We shared our opinion on Toronto’s land transfer tax and quite frankly, I don’t see it going anywhere anytime soon. The good news is that as a first-time buyer, you’ll likely get a refund for most of land transfer tax you pay (click here for details on the First Time Buyer Land Transfer Tax Rebate program).
We’ve said it before and we’ll say it again: buying a home isn’t about trying to time the market. It’s about having a roof over your head and falling in love with a place you can call home. If you want to discuss your concerns as a first time buyer in Toronto, give us a call or send us a message. We’d be happy to chat.