5 Mistakes to Avoid as a Buyer in the Condo Market
Buying a home is probably the largest purchase you'll ever make. Whether you’re in the market for an urban loft or a detached bungalow in the suburbs, one thing’s for sure: going about it the wrong way will not only cause you stress, but could also hurt you financially.
As a condo specialist, I often see people make the same handful of missteps during their condo search. Below is a list of the biggest mistakes I commonly observe — and strategies to help you avoid them.
Mistake #1: Purchasing the right condo in the wrong neighbourhood
There’s a common scenario I see time and time again, wherein a condo buyer has a limited budget, and must make a decision between one of two options:
Option 1: Buy the condo space they really want, however in a less than ideal neighbourhood
Option 2: Buy a compromised condo (bit too small, inferior view, dated, etc), but in their most ideal neighbourhood.
While neither option is ideal, what I’ve observed after following up with multiple clients is that, overwhelmingly, option #2 will have the most positive impact on your quality of life. In other words, sacrificing a little square footage, a view, or quality of finishings is well worth it if it means you can be in the neighbourhood that best suits your personality and lifestyle.
Mistake #2: Being seduced by expert staging
‘Staging’ is when a seller opts to hire an interior decorator to temporarily fill their property with the most desirable furniture, artwork and curated accent pieces, turning the home into a veritable model suite.
This poses a bit of a risk to the buyer: if the staging is executed well, it can make a very mediocre property look and feel breathtaking. I often have to remind my clients to look past the furniture (it's not included in the sale!) and instead to carefully assess the use of space and room dimensions.
Staging does have its benefits though. For example, a well-staged property will give you a very clear understanding of the optimal furniture sizes and layouts for your potential new home. Just don’t let the décor be a deciding factor, because the furniture and art will disappear as soon as you’re handed the keys.
Your realtor should always point out any flaws that you might miss, particularly whether or not a space has a poor layout or use of space.
Mistake #3: Entering the market without a mortgage pre-approval
Yes, this seems obvious… but there’s a reason this happens so often. And the #1 culprit is the online mortgage calculator.
The story often goes as follows: A buyer who’s new to the market runs a search for a lender and stumbles upon an online mortgage calculator. The buyer assumes it must be credible — after all, it’s hosted on a major bank’s website. They punch in some numbers and moments later, they’ve determined their budget cap and are ready to go.
The problem with online calculators is that they do not account for many factors that your banker or mortgage broker must assess, such as your credit score, employment situation (employed or self-employed), additional debts you may have, whether you qualify for an RRSP contribution or the 'type' of mortgage product that's most ideal for you (e.g. an 'open' or 'closed' mortgage).
A reputable mortgage broker will take all of these variables into account, and then shop around on your behalf for the best rate among major banks and private lenders (their service is also free — they're compensated by the lender you choose to go with). Oftentimes buyers will discover they qualify for either more or less than they had initially thought.
My advice: know where your financial comfort zone is before getting into the market and find an excellent mortgage broker whom you can trust (contact me if you're looking for any recommendations). It'll save you a lot of time and headache.
Mistake #4: Buying without a realtor
It goes without saying that not all agents are created equal. But if you’re able to find an ethical and knowledgeable realtor who truly has your best interests at heart, their expertise will save you money, time, and stress.
The right realtor understands how important it is that their clients purchase from only the most reputable condos. To the more cynical readers out there, yes, this helps create a stronger client relationship that can result in referrals and repeat business. But in all sincerity, we have to sleep at night — it’s really a win-win for everyone if you buy into a condo that you love.
But how can you tell if your realtor is looking out for your best interests? One red flag to watch out for is the realtor who loves every property you see. You'll know your realtor is looking out for you by the way they discuss each property. No property is perfect... Each comes with its own list of pros and cons. Part of your realtor's job is to make you aware of all of them — the good and the bad.
As well, always work with a realtor who specializes in the type of property you’re looking for. If you’re looking for a trendy loft style condo in King West, don’t rely on your mom’s realtor friend from Stouffville who specializes in new subdivisions. The generalist realtor may mean well, but they won't know that the loft had a structural problem two years ago, or has Kitec plumbing, or any of the local market nuances. That lack of local knowledge increases the risk you buy a lemon.
Mistake #5: Not making an informed offer
Of course it’s okay (and normal) to get excited about a potential home, but more often than I care to admit, I see buyers fall in love with properties and lose some of their critical thinking skills in the process.
I'm not suggesting and a positive emotional response to a property should not be ignored — it’s a signal the property is checking off a lot of your criteria boxes, and that's important.
However, before submitting an offer, make sure your realtor provides you with a clear and objective assessment of the local market and most comparable sales. This information will help you determine the objective value of the property, which will inform how you proceed with your offer.
I hope this list has been informative! If you’re interested in purchasing a condo, I’d be happy to help you navigate Toronto’s condo market and secure the right property.
If you’d like to start with a no-obligation discussion about your criteria or to book a showing, call me at 902-719-9121 or send an email to jenelle@strata.ca. I’m always happy to help!
