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When you’re a Buyer in a hot real estate market like Toronto, there aren’t a lot of “deals” to be found.The market is smart and prices quite naturally adjust up or down based on supply and demand. [Related: The Market is Smarter Than You]
But if you’ve got your heart set on finding a “deal”, here’s what to look for:
- Houses that have been on the market a long time. The definition of ‘long time’ will differ based on neighbourhood and type of property, but you can safely assume anything that has been on the market for more than 60 days is getting ‘stale’ in the minds of Buyers (and it might be 21 or 30 days in some neighbourhoods). Now a long market time could be indicative of a stubborn Seller, but it might also be an opportunity to buy at a discounted price.
- For Sale By Owner (FSBO) properties. Some Sellers think it’s easy to sell a home and take the task on themselves. While that works for some, others will struggle to sell. They may have taken photos with their iPhone; they may be uncooperative in letting people in to see the home and they likely haven’t focused on the staging and marketing that brings in top dollar. Truth: realtors are probably avoiding dealing with them because the transactions with FSBO’s are almost always super painful. This could be an opportunity for you as a Buyer – just make sure you’re working with an agent who knows how to control this kind of negotiation.
- Properties listed by out-of-town agents. OK, this might be mean to say, but most of out-of-town agents don’t know how to list a house in Toronto. That naive Seller who is using their mom’s friend from Brampton might think they’re doing the right thing, but they could be screwing themselves out of tens of thousands of dollars. That’s an opportunity for you.
- Buy what nobody else is buying: seek out the ugly house, the house on the busy street or the house with the questionable neighbour (do that last one cautiously). Target houses where demand is naturally lower and you’ll be less likely to find yourself in a bidding war.
- Don’t follow the leader, seasonally-speaking. Househunt when nobody else is househunting. The dead of winter (December and January) and the heat of summer (end of July and August) are some of the best months to score a bargain.
- Watch for houses that are nearing the end of their listing contract or have recently expired. Those Sellers may be especially motivated to make the selling process end. You’d be surprised to see how many houses sell on the 90th day of a 90-day contract.
- Target condo buildings that are going through short-term pain. A recent special assessment, politics on the board of directors or a recent lawsuit might be motivating multiple Sellers to list their condos at the same time, while also intimidating Buyers. Higher supply, lower demand…yes! Always be cautious of course…you don’t want to buy into a mess that will affect the long-term value of your property.
- Buy the condo that’s facing the construction project. Condos facing construction are notoriously hard to sell. Buyers hate the unknown and are often overly concerned with the changes to the “the view”. But here’s the thing: once construction is complete, units will go back to selling at a normal rate and at normal prices…nobody will remember what “the view” used to be. Of course living through all that construction won’t be ideal…but you might score a bargain.
- Consider the older condo buildings. Sure, older buildings might not have 9-foot ceilings and all the fancy finishes, but some of the best condo deals out there are in older buildings. You get more square footage at lower prices and you can do the renovations yourself. Just beware the buildings with extraordinarily high condo fees.
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