There are three main questions that buyers initially face — when, what, and how. Here are some insights.
The question that most often comes up first and foremost is when’s the right time to buy? Just about everyone has a theory on this but most answers boil down to spring and summer are bad, fall is ok, and winter is good. I’ll spare you the details of why people believe this but in a nutshell the belief is wrong and based on the misguided notion that prices are higher during the warmer months. Consider that the average price of a home during winter of a few years back was actually higher than most of the summer that same year. The truth is that our market has began to surge once more. Each season has its advantages and disadvantages. Therefore the best time to buy is when you’re ready to buy. Don’t get caught up in trying to time the market — the only timing you should be thinking about is your own.
For those buyers looking outside of the downtown area, determining what type of home to buy usually comes down to how much one can comfortably manage. However, those looking downtown often need to decide between a condo building or a condo-townhouse. Make no mistake, there are differences. Deciding between the two is, amongst other things, a matter of lifestyle. Imagine that the condo is like the dating lifestyle whereas the townhouse is more like being married. The condo is flashier, better suited for those who like to go out and paint the town red on a regular basis; those who prefer to be closer to the major entertainment districts of our city and those enjoying a free-wheeling lifestyle.
This is mainly because condos are readily available in or nearer to the core of downtown and because you normally sacrifice on space and/or best possible investment for the sake of living in one of Toronto’s sexiest living quarters. The townhouse is geared toward a more routine and comfortable lifestyle. You won’t find one as near to the core but you’ve decided you don’t need to be that close to all the parties and parades because you’ve moved past that phase.
The townhouse is also the savvier investment. Lower maintenance fees means the ability to purchase a more valuable piece of real estate, and one that will appreciate quicker. The focus is more on long-term goals, hopes and desires rather than instantaneous fun.
Finally, the question of how. This is usually more of a concern for first time buyers, when intelligent financing is of the utmost importance. With longer amortization periods and historically low interest rates buying has never been easier. However there is still the matter of finding the shiniest nickel amongst the others. How much of a down-payment to utilize will depend on the state of your RRSP’s as well as other, unrelated investments. Your interest rate and payment structure will be affected by your employment situation. The type of mortgage product will depend, in part, on your personal preferences. Understanding the “how” will eventually lead you to establishing “how much,” and once you have that, you’re closer than ever to hosting your housewarming.
Most important to remember is that despite the fact there are no routine rules of thumbs for these questions, that every buyer will face, the answers do not need to be complicated or elusive. Knowing the questions is the first step toward answering them.
– Amit is a Realtor/Developer with Re/Max. amitp@rogers.com
