By: Pino Di Mascio
Prices are up and interest rates rising. With homes scarce and buyers plentiful, Canadians looking to buy a home in Canada's major cities face numerous challenges - particularly first-time purchasers. Straight Goods takes a four-part look at the often complicated home buying process. Pino Di Mascio and his wife Kelly O'Neill are searching for a home in downtown Toronto. In this series, the author shares insights and tips from his search for an affordable urban home.
Part 1 - Getting Started: Searching for a House in a Booming Market
Anxious? Apprehensive? Frustrated? Discouraged? Chances are you are one of numerous Canadians, like me and my wife, trying to buy a home this year.
According to Statistics Canada, housing prices in the country are up over 10% from a year ago. Anyone looking for a home in Canada's major cities knows the real increases have been much higher.
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It is important for buyers to understand the dynamics of this market and adopt appropriate strategies to protect themselves |
With a shortage of homes for sale and pent-up demand, housing prices are increasing at an alarming rate. Add to this the looming fear of escalating interest rates and the usual spring surge in demand, and the result is a difficult situation for would-be home buyers.
Sellers have a definite advantage. It is important for buyers to understand the dynamics of this market and adopt appropriate strategies to protect themselves. Otherwise, one is bound to spend many frustrating months searching for a home or, worse yet, get caught up in the frenzy of a spiralling market and pay too much or buy an inappropriate house.
| Author Pino Di Mascio, his wife Kelly O'Neill and their dog Flynn, taking a break from their search for the perfect house |
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I am one of many Canadians learning just how this market works. Anyone planning to buy a home this year should keep in mind the following points:
Start with a pre-approved mortgage from your bank. Determine exactly what you can afford before you begin your search. This will save you countless hours of looking at houses you can't afford, allow you to know when to walk away from a potential bidders' war and put you in a better bargaining position when you make an offer.
Use the internet to determine the price range for the house category in your desired neighbourhood. The MLS web site (www.mls.ca) is useful in this regard - but do not use it as a search tool. Most houses on the listing have already been sold and inquiries will only elicit numerous phone calls from real estate agents.
Go to open houses. These will give you the opportunity to see what your money will actually buy and allow you to draw qualitative comparisons between homes. Visit as many as possible and track the asking and actual selling price of each home. This will develop your skill for understanding what a house is worth and at what price it is likely to sell.
Do not go it alone. The market is tight and most homes will sell before you ever learn about them. A real estate agent is highly recommended and the only way to keep informed about new listings. A good agent will ask you many questions and get to know exactly what interests you. They should also be able to show you what to look for when viewing a house.
With this in mind, you must be sure to remember the most important point - do not be in a hurry. Many people feel rushed in a booming market. They are afraid that the house they want will be sold to someone else or that it will cost more next month. Real estate agents and news reports from mainstream business papers and housing sections will fuel your fears. But entering the housing market in this frame of mind is a sure way to overpay. The best strategy is to take your time. Be sure of what you can afford and be sure of what you want to buy. Eventually you should find your house at your price.
Pino Di Mascio is an urban planner with Toronto-based international planning and design firm Urban Strategies Inc. He can be reached at pdimascio@urbanstrategies.com.
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