« The No. 1 thing on your mind, before anything else, before you even go to take a look at any sales centre, should be your financing. »
While more and more people are becoming interested in purchasing new condos it seems that just as many are feeling a little bit lost on where to begin. It’s understandable considering the multitude of new condos being built in our great city. Here’s an insight into how to begin your search in a focused and determined manner.
The No. 1 thing on your mind, before anything else, before you even go to take a look at any sales centre, should be your financing. Ideally, this means having a true understanding of not only what you can spend but what buying a new condo actually entails, expense wise. It still amazes me how many people will wait for clothes to go on sale, or buy their textbooks used, to save money, and then freelance with their money when it comes to the most expensive, and arguably important, investment they’ll ever make.
Katie, for instance, simply telling herself that she will spend a maximum of $300,000 is the equivalent of her planning a road trip to Vancouver and just keeping a mental note to drive west until she hits water. $300,000 itself means nothing if Katie doesn’t recognize what that actually means to her finances on a monthly basis, because that’s likely how often she’ll be paying her mortgage.
Instead, Katie would be wiser to determine how much she’s comfortable spending on a monthly basis, given her other expenses and her savings goals, and then working her way toward an eventual purchase price. Doing it this way will ensure that she’s not being too ambitious or cutting herself short. She’ll also understand important facts like how $300,000 versus $320,000 can seem like a formidable difference but, in reality, the difference shakes down to about $125 per month.
Now, once Katie has come to terms with her financial situation she’ll be on a much more illuminated path toward purchasing a new development condo.
The next step will help eliminate a large number of possibilities, but in a good way. Truth be told, in Toronto’s new condo market, if you don’t have enough factors narrowing your choices, you might find yourself maintaining too many choices to ever make a decision.
Katie needs to determine when she would like to actually move in, or needs to move in. The timeframe she should use begins at a month or so and then each interval should increase by six months all the way up to three-plus years. Depending on what Katie decides her decision will already be so much clearer.
The next step is crucial. It will help Katie stay focused and on track during her search. The next step is for Katie to determine, for herself, those important features she will not compromise on. This step is necessary because it will help weed through the condos that don’t apply. This step is a wise one because there are enough choices out there that Katie shouldn’t have to compromise on her most important wishes. Having said that, of course, this step requires you to be realistic as well.
If Katie wants a lakeside 1,000-square-foot loft for $250,000 she’ll find herself out of luck. More than anything, this step means determining your stance on those factors that can’t be changed – location, size, type of building/suite. I would include parking here as well because if you need a parking space it’s better to buy one up front.
Let’s assume Katie’s location is North York (Yonge and Sheppard) and her timeframe is three years. I would tell Katie that there are many appealing options, not the least of which is Tridel’s upcoming Hallmark release this spring. The advantage Katie has over those who have gone into their search blindly is being confident that she knows what she wants, instead of simply assuming she’s making a wise decision.
Believe me when it comes to the new condo market in the GTA, knowing what you want, much like in many other things in life, can mean the difference between getting what you want and not.
For any questions/comments on this article or anything in general please feel free to e-mail Amit at
amitp@rogers.com
. Amit is a Realtor/Developer with Re/Max.
