Why is it So Hard to Find a 3-Bedroom Condo in Toronto?

If you have ever tried to rent or buy a 3-bedroom condo in downtown Toronto, you know what a rare unicorn these units are. So why is this?

It Starts with the Development Stage

The time it takes for a new Condo development to get off the ground; from pre-construction sales to building the condo project, to occupancy, and finally registration can be a minimum of 4 years. That can be a very long time for owners to wait, especially owners with families who would be in the market for a 3-bedroom condo. What someone wants in a condo now, can change greatly in 4 years. This means that instead of owners buying into New Developments, it’s most often Investors.

It's What Investors Want

Investors know that historically smaller units perform better than larger units in price appreciation. They also know that smaller units are easier to rent, and the returns are better. Therefore, they opt to buy smaller 1 Bedroom and Studio Condo Units.

It's Been Tried

The Water Club Condos on Queens Quay consist of three condo towers. In 2004, during the development phase, the first two towers were all smaller units. The third tower was supposed to be all larger, 3-Bedroom Condo units. However, the developer could not sell them at the pre-construction stage, so they had to do a redesign to make them smaller.
What we need to remember is that developers cannot build until they reach at least 70% pre-construction sales. If the units don’t sell, the building doesn’t get built.

What Do We Do?

So, what do you do if you are still determined to find a three-bedroom condo in Toronto? You have two choices:

Unfortunately, for now, the Toronto 3-bedroom condo market is going to continue to be very tight until new legislation can keep up.

When is the Best Time to Sell Your Condo?

One of the most common questions Realtors get asked is, "When is the best time to sell my condo?" The simple truth is that condos sell all year round. Many people prefer to list their homes and condos in the spring so that they can close in the summer. This is considered "traditional."

That being said, people are moving into our area (Toronto and the GTA) all of the time. They are looking for homes all year long, so it is important that you talk to your real estate professional to determine the right time to put your home on the market.

Why Should You Sell your Condo in the Spring and Summer Months?

Spring is more popular when it comes to buying and selling Condos. There are more buyers who are looking to move, which may mean that you have more people coming to look at your home. Your condo may not sit on the market as long as it could if you waited until fall and winter.

You might be lucky enough to have a bidding war when two or more families want to buy your home. You may get a little more money for your condo due to the competition. They may try to outbid each other, or not ask for any help when it comes to closing costs. You may even be able to avoid some of the extras, such as inspections, in order to win your condo.

Many families prefer to move when their children are out of school. By putting their homes on the market in the spring, they can close in the summer. Their children won't have to change schools in the middle of the year. They also won't have to miss school as they work to pack up their home and move to another home.

Why Would You Prefer to do it in the Fall and Winter Months?

There is less competition in the fall and winter months. This is good for you because when buyers don't have a lot of choices, they are more likely to choose your home. If there are five condos for sale in the same area, you may not have as good of a chance of selling yours. If it is the only one, people are going to come and see it!

When there is less competition, there is less comparison too (when it comes to the price). When there are five homes on the market, they are all going to have to be similarly priced if they want to sell. If there is only one or two, there may be some wiggle room when it comes to home much you want to sell your home for.

The people who buy in the winter are more likely to be investors or those who don't have children. This is important because you really need to know who you are trying to reach when you are trying to sell your home. If you think of your condo as an investment and not a family home, it may be better to try to sell in the fall and winter.

In Conclusion, When is the Best Time to Sell?

If you are thinking about selling your condo, and are not sure about whether you should sell now or wait for another season, your best bet is to talk to a professional. Don't hesitate to contact your RE/MAX Condos Plus professional.
Together we can decide whether you want to sell now in the busy time or wait until there is less competition. We will be happy to talk about the pros and cons of selling your condo and will be ready to put it on the market in the Toronto and GTA whenever you are ready

What is A Status Certificate and Why is it Important?

A Status Certificate provides information on the financial status of a condo building. A Status Certificate will often contain information such as the amount of the reserve fund and monthly maintenance fees. It gives you a general overview of the financial health of a building. Think of it as a resale equivalent of a disclosure statement. Anything about the building needs to be disclosed.

Before you purchase a resale condo unit, you should ensure that your offer is conditional on receiving and reviewing the building's Status Certificate and accompanying documents. Give yourself enough time to have the Certificate reviewed by a lawyer.

The certificate must be delivered by the condominium corporation within 10 days (about 1 and a half weeks) of the request for it and is usually accompanied by a fee of no more than $100. If you are working with a Realtor, they will usually be the ones to request the document. Often in a sellers' market where bidding wars are common, the seller’s Realtor will already have it available upon request.

What is a Condo?

Buying a condo is a little different than buying a freehold house. When you purchase a condo, you are buying two things, your individual unit, and a share of the condominium corporation.

Your Individual unit consists of the apartment or townhouse itself. Your ownership usually extends to the drywall. You own everything within your walls, while things like the windows and doors usually belong to the corporation.
The corporation owns and maintains the land and all the common elements such as outside grounds, elevators, amenities, parking, etc. When you buy a condo, you are buying a share of the condo corporation. It is important that the building corporation is in just as good condition as your individual unit.

When looking to buy, you must also consider the building. The choice of building can have a huge impact on your lifestyle. The building lifestyle is determined by three factors:

Condo Amenities:

This includes things like a pool, gym, concierge, rooftop patio, etc. More family-friendly buildings may have things like a children's playroom and playground.

Building Location:

Many people opt to live in a condo so they can live in a more urban environment. Look at the walkability of a condo location and the surrounding neighbourhood.

A Mix of Owners:

Is the building mostly investors who rent out their units? Young professionals? Families? Retirees? Every building is different and looking at the mix of owners is something to consider when buying.

Whether to choose a condo or a freehold property is a personal choice. However, we find that it's an excellent choice for investors as well as home owners who don't necessarily want to put the time into maintaining a propety on their own.

What Are Condo Fees and What Do They Cover?

What are Condo Fees?
Condo fees are a normal part of being a co-owner of the entire building. Every homeowner in a condo also has an equal share of the building, like a co-op, and you manage it together through a council. Your dues every month cover your share of the communal costs to run the building.
For example, part of your fees will cover general wear and tear. Instead of being responsible for the full cost of roof repairs in a single-family home, every homeowner puts in a little to keep the shared roof in good shape.

What Condo Fees Cover
Shared Utilities
Some condo buildings cover certain utility costs instead of monitoring individual unit use. Typically, shared utilities include water, natural gas, trash pickup, and sometimes services like phone, cable, and internet. If your condo does not come with a water bill, for example, the shared cost of building water is likely rolled into the condo fees that every owner pays.
Building Maintenance
Buying a separate house, you can expect to spend 1% of the property value per year on building maintenance. Roof repairs, siding replacement, plumbing and electrical repairs throughout the year, infrastructure upgrades, appliance and equipment replacements all come with a predictable cost, one covered in a handy, efficient way by the condo association and the shared cost is covered by owner dues.
Building Amenities
In addition to basic maintenance like roofing and upkeep, your condo fees also cover the maintenance and staffing of any on-site amenities like a fitness center, dog wash, or spa. Building concierge service, cleaning staff, and all those other little luxuries that come with condo living can be enjoyed by owners because they all share the split cost as part of the condo fees.
The Reserve Fund
Finally, a slice of every year's condo fees go into the reserve fund. This is your condo building's account for building upgrades and emergency repairs. Every condo association should have a well-maintained reserve fund in case of historic local storms, to cover big-ticket maintenance like roof replacement, or to save up for the next great building upgrade. You can find information a buildings reserve fund in their status certificate.

How to Assess a Condo Association's Dues Strategy
Most people don't know how to respond when they consider condo fees because it is an unfamiliar way to handle the costs of homeownership. Instead of looking at it like an 'additional' fee, consider the value you will enjoy from the amenities and the comparative cost (in time and money) of maintenance that you won't have to handle personally when you own a condo. No yard work, no calling the roofers when a leak springs.
To assess a specific condo, look at the health of their reserve fund and ask for a detailed look at their maintenance and improvement plans. Be aware of special assessments, outside-dues costs that homeowners agree to share for special projects, and how the council manages its affairs.
If you see a practical group of people sharing the costs of a building and planning for the future, the only remaining choice is whether you will feel rewarded living as part of the shared community.

Tips for Choosing A Real Estate Agent

Buying real estate is one of the most significant transactions you will ever make in your life, so arming yourself with the very best person to assist you is essential. It is a real estate agent's competency, motivation, skills, experience, and support personnel that makes all the difference as to whether you achieve a strong result or not. With many real estate agent professionals to choose from, finding the right one can feel overwhelming. Here are tips to help you when choosing a real estate agent.

Do Your Due Diligence

Start by examining an agent's online presence. Check the agent's website and social media accounts. Request their testimonials and see what clients say about them.
Be sure to check with RECO to find out whether the agent you're considering is licensed or has any disciplinary actions. The provincial regulators provide the ability to search for licensees and check if they have complaints lodged against them.

Look for Experience

When interviewing agents be sure to find out how long they have been in the industry and if they work in real-estate part-time or full-time. An experienced, full-time real estate professional will likely have already experienced market ups and downs and will know how to navigate current conditions. To get an idea of what type of experience someone has, you can ask to see a list of their recent transactions to see what areas and types of properties they have experience working with.

Strong Local Market Knowledge

Every market is different. When buying condos in Toronto, you'll need a real estate agent who knows local market trends and patterns like the back of their hand and who can help guide you through the nuances of your specific locality.
A good way to gauge local market knowledge is simply to ask. Inquire about the basics, like average time on the market for newly listed condos and average sale prices, but also ask about any unique trends regarding your local market. A real-estate agent with sufficient local market knowledge will make work easier for everyone.

Explain Your Communication Preferences

Make sure you're on the same page from the get-go. Discuss how the agent will keep you informed and how often you expect to hear from them. If you prefer email but the agent is most responsive to phone calls, you may not be a good fit for each other. If you know you're going to have a lot of questions and expect quick responses, but the realtor usually just sends bi-weekly updates, you may want to find someone who is a better fit.

Ask the Realtor For Services They Offer

It's very important to ask a realtor the services and resources they offer. This will help you know whether they have experience working with condos or not. If you find that your potential agent has very little experience in your area of interest, then it's advisable to look for a professional-specific area of interest.
Pick a Realtor who is Tech-Savvy
There are many ways your agent can use technology, and strong agents will take advantage of this to be more productive and get the best results for you. When choosing a real estate agent, check out your agent's current listings on MLS. Is the agent active on social media, and do they use it to market themselves and their clients' properties? This is one way of finding out their utilization of technology.

Real Estate Negotiations Skills

In the property business, there are many elements, unique to each sale, that are up for discussion. You deserve to feel well-informed and confident throughout the negotiation process. An experienced realtor should provide helpful insights and knowledgeable advice about the best condos.
They should safeguard your needs throughout the entire property journey. With the right agent, there should be zero doubt that they have your best interest at heart.

Undivided Attention

While you want a realtor with lots of experience, ask how many other clients he or she is working with currently. Generally speaking, if it's a high number of condo buyers or sellers, question whether you'll get the attention required.

Three Essential Rules for Real Estate Investing

Real estate investing can be as punitive as it is rewarding. If you don't know what to invest in, you could end up losing money. On the flip side, understanding the ins and outs of the real estate investment world will give you an upper hand. It ensures that you understand the best locations for investment, when to make a purchase, and how to keep growing your investments.
Before making an investment in Toronto condos, or any other form of real estate, you need to establish your investment goals. Are you looking for a short-term flip? Do you have an idea of your budget? How much do you understand about the market? It is easy to get carried away if you don't have an understanding of your investment goals. Here are some important real estate investment rules to follow:

Know Your Market

Knowing everything about the market you are interested in investing in is essential. There are multiple market drivers that will determine the success of your investment. A poor market could easily drag down the value of the finest properties. On the flip side, you can get some of the best deals by investing in growing markets.
You need to look for real estate market drivers like sales price history, unemployment numbers, demographics, tax rate changes, new housing permits, and population figures. You can easily find this information in local and regional publications like TRREB. Be sure to also research new initiatives or investments that could drive people to the area.
For instance, having a new major employer move into the location could result in an influx of interested tenants and buyers. Market drivers are too important to ignore as you conduct real estate investing research.

Understand Your Numbers

Real estate investment is a numbers game. If you have complete visibility of how and where to spend your money, you can make informed decisions. You need to understand your financing options as well as the costs and expenses you will incur during the acquisition.
If you are investing in a fixer-upper, you should be comfortable with the renovation costs. Most importantly, ensure that you can be in control of your property's cash flows. Even though your property is bound to increase in value, poor cash flows can force you to sell it too early. Positive cash flows ensure that you can keep maintaining and running the property as you watch it increase in value.
If your strategy is to buy and hold, understanding the rental market is essential too – it will be a huge contributor to your cash flow health. You should also understand what the resale market looks like. Knowing whether it is a buyer's market or a seller's market will determine how easy it is to get the property sold.

Play the Long-Term Game

The longer you hold a real estate property, the more it appreciates. Sure, you can always invest in a short-term flip, but you will be losing out on the property's appreciation. Holding on to a property long-term helps you study the real estate market even better. You can learn of new developments or job opportunities that will drag people to the area.
In case the market falls, you can use the property to trade up for a higher-valued property. Since there is typically less competition in falling markets, getting top-tier properties at a lower price than normal is easy. Focus on the long-term gains you can get from your property to optimize your investments.

Set and Achieve Your Goals

Always define your goals from the onset when investing in real estate. Any investment that doesn't align with your goals is not a good investment for you. Most importantly, be sure to study your target real estate market to make the right decision.

Mortgage Basics: Fixed V.s. Variable Rate

Once you have finally chosen the condo of your dreams, the decisions are not over yet. It’s financing time! When choosing a mortgage, the big question is, will you choose a fixed, or variable-rate mortgage? We wanted to provide a brief overview and comparison of Fixed VS a Variable-Rate mortgages so you have the Mortgage Basics handled!

Fixed-Rate Mortgage

A fixed-rate mortgage guarantees your interest rate for a pre-determined amount of time, typically 5 years. When the term expires, you have the option to stay with the same lender or switch to a different one. Fixed-rate mortgages often appeal to homeowners who want stability in their monthly payments or manage a tight monthly budget.
Pros: Stability, peace of mind
Cons: Higher interest rate than a variable rate mortgage

Variable-Rate Mortgage

A variable rate mortgage fluctuates with the prime rate. Corresponding adjustments are made to payments or amortization. Typically, payment adjustments are made quarterly, half-yearly, or yearly, but many variations exist. A variable-rate often allows the borrower to take advantage of lower rates. The interest rate is calculated on an ongoing basis at a lender’s prime rate minus a set percentage. For example, if the prime rate is 2.5%, the holder of a prime minus .5% mortgage would pay a 2.0% variable rate.
Pros: Generally, a significantly lower rate than a fixed-rate mortgage
Cons: Interest rates fluctuate with the market and so can your monthly payments

Choosing between a fixed or variable rate is not always an easy one. A lot depends on your current financial situation, mortgage size, and the current climate. It is always best to have a discussion with your Mortgage Broker about what works best for you.

How to Price Your Home to Sell in the 2020s Market

Your house or condo listing price is the most important decision you will make in selling a home. Where you set that number determines where negotiations start. Buyers may bid above that number in a competitive market or bargain below that number for repairs or concessions. Your listing price sets your home's place in the market and also determines the price range of people who can be your buyers. So, How do you price your home to sell?

How Does the Listing Price Relate to the Sale Price?

The longer the home is on the market, the further below the list price, and eventually market value it may sell for. A quick calculation estimates losing about 5% of the list price for every week the property is on the market. The best sale value often comes from listing slightly below market value and closing the sale within 10 days of listing. This minimises actual value lost to time on the market.

What Determines the Market Value of a Condo?

Research Historical Condo Prices in Your Neighbourhood

The average home price in your Toronto neighbourhood or condo building sets the bar for your home's listing price. Yours should neither be the highest nor lowest listed home in the neighbourhood. You can usually find this information on real estate websites that keep old sale price histories.
Identify the Average Price for Similar Floorplans and Features
Now look closer at prices for homes and condos in your neighbourhood and condo buildings with similar square footage, yard size, and bedroom/bathroom count. Use bedroom count as your primary measuring unit and compare the selling prices of homes with the same bedroom/bathroom count as your home.

Know Your Local Housing Market

The local market also has a significant influence on your home pricing decision. Take a look at national home averages and how home and condo prices are trending in your city. Being aware of these factors can help you make a smarter decision on whether to price up or down.

There may also be more current or nearby influences. Your condo might be near a major employer, in an excellent school district, or exist within the housing range of a local college. Or your style of building might be extremely popular right now.

Finding a Real Estate Agent who Knows How To Price Condos

Most real estate agents don't go through the total calculation process. You risk leaving money on the table by pricing too high and too fast. Finding the best value takes considering all the value factors your home or condo has to offer.
The right pricing is critical for attracting buyers and winning the full value of your home in the final sale. . Now, the skill you need in an agent is pricing your property at the right market value. When you see an agent's sales record, don't be impressed by a sheet of "above listing" numbers. Look for agents who have a track record of selling at a list or higher within 30 days.

How to Get Pre-Approved for a Mortgage

If you are considering buying a home or condo, one of the first steps that you should take is to get pre-approved for a mortgage. Mortgage pre-approval is the process of consulting with a lender to determine how much money you qualify for and what loan options are available to you given your financial situation. If you are pre-approved, a lender will provide you with a pre-approval letter outlining how much you are qualified to borrow as long as the home meets certain criteria, and your financial situation does not change drastically.

Seeking pre-approval for a mortgage before you start the house hunt is critical, as meeting with a lender can give you a better sense of how much you can afford to spend on your dream home. Additionally, having a pre-approval letter in hand will show buyers that you are serious, helping you to stand out in a competitive market.
Yet, if you have never bought a home or condo before, you may find yourself wondering how to go about getting pre-approved for a mortgage. To help get you started, here is an overview of the steps that you should take when seeking mortgage pre-approval.

Check Your Credit Report

The first thing that you should do before you even start looking into mortgage options is to check your credit report. Lenders will do a credit check before they decide whether or not to approve you for a loan, so it is important that you check your credit report to make sure that there are no errors that could affect your chances of being approved. Fortunately, Equifax makes it easy for you to obtain a copy of your credit report online.
During your credit check, lenders will look at not just your credit score, but also your credit utilization ratio (which is the amount of credit you're using relative to your total credit limit) and they will also look for anything negative on your credit history such as missed payments. Knowing your credit score and history can help you know where you stand before you talk to lenders, as the higher your credit score is, and the lower your credit utilization ratio is, the better the mortgage rates you qualify for will be. If your credit score is not where you'd like it to be, you may want to consider paying off some debt before you start the home-buying process, as a credit score of at least 620 is recommended when applying for mortgages.

Gather Documentation

During the pre-approval process, lenders will need access to a variety of personal and financial documentation as they assess your income, assets, debt, and creditworthiness when deciding whether you qualify for a mortgage. Being prepared in advance by having as many of these documents ready when you start meeting with lenders can help to simplify and speed up the application process. Documents you should gather before meeting with lenders include:

Research Lenders

Next, take your time when researching possible lenders in order to find a good fit. Ideally, you should sit down with multiple lenders to ask questions about rates and mortgage options, as well as to find out what loans may be available to you by getting pre-qualified. Take notes on each lender to help you narrow down your options, as a good lender will be attentive and help explain your mortgage options to you.

Apply and Compare Offers

Once you have narrowed down your options to a few lenders you would feel comfortable working with, you should submit several pre-approval applications. Comparing offers from multiple lenders can help you compare rates and fees, which could help you save a substantial about of money over a 30-year mortgage.
Getting pre-approved for a mortgage as you start the process of buying a home or condo will ensure that your financing is in order should you find a house that you want to make an offer on. Feel free to contact us to learn more about the process of applying for a home loan