Are you looking to buy or sell real estate this year? Read on to find out how to buy a home and how to sell a home in 2020.
According to CREA, Canadian Real Estate Association, based on 2018 and 2019 numbers, close to 500,000 homes will be sold in 2020 in Canada. There were 197,674 homes sold in Ontario alone in the first 11 months of 2019.
By looking at these numbers it is clear that many of you may have real estate on your list of New Year’s resolutions.
Buying or selling a home is a big deal and as with any major purchase and sale there are lots of things to consider. If you have a home to sell you will want to know things like when is the best time to sell? What’s my home worth? Do I need to stage?
These are all good questions, and maximizing your sale price is so important, especially if you need to pay off a mortgage or other debt and still be left with enough money to buy another home.
If you are a buyer starting your search you may be wondering if you should buy a condo or a house? If you are buying a condo is it better to buy pre-construction or buy a resale condo? Should you buy a property as an investment? Will you rent out one unit and live in another? If this is a move up you will be looking for a beautiful home perhaps in a particularly hot neighbourhood with the promise of a great return on your investment. There are so many things to think about and to consider when buying or selling real estate.
We advise and counsel clients on this stuff every day, so it only made sense for us to put together a list of “Do’s and Don’ts, How to Buy and Sell Real Estate in 2020”. Hopefully this will help you achieve your 2020 real estate resolutions.
A solid financial foundation is the key to opening doors
Is that way too many puns for one title? It’s true though, getting your finances in order is the most important part of the process whether buying or selling, and yet the one that so many people are still uncomfortable talking about.
Whether you are selling and looking forward to a big payout, or you are a buyer trying to scrape together that down payment, knowing your numbers is the most important part of the process. Without a solid financial foundation your house will not stand. If you are a buyer, you need to know what you can afford. What are the true costs of buying real estate? Are there taxes, finance costs, insurance fees you may not be aware of? There is more to think about than simply monthly mortgage payments, taxes and maintenance or renovation fees.
If you are a seller you may be focused on the bottom line. There could be other things to consider: In reality how easily will your house be sold? Is there a mortgage discharge, porting fee or penalty? What are the realtor fees, staging costs and what investment is required prior to getting your place on the market? Are there tax implications for you?
Whether buying or selling, speak to your realtor and get a clear, realistic picture of the process and the cost. In terms of your personal finances, our best advice is to always have a face to face conversation with your financial advisor. We have a list of preferred professionals, and if you need an introduction to someone experienced, we are happy to point you in the right direction. As a buyer, a great way to alleviate the stress is to get a pre-approval and have a mortgage rate held.
Choose a real estate professional early on
This is a big decision that will take some time, not the kind of decision where you can simply swipe right or left. It would be easy to connect with the first realtor you meet and call it a day. Remember though, here is where experience counts. There are currently 54,500 real estate sales people and brokers in Toronto according to the Toronto real estate board and **the stats show that 19,381 of them did not sell even one single property. Actually, over 50% of agents in Toronto sold one or fewer homes. You can only imagine how many sold less than 5 and less than 10. Call me cautious, but I want to rely on a person with experience and a foundation of their own to handle the purchase or sale of one of my biggest assets.
Pick someone you like, a person that is a good match but who knows their stuff and is able to be honest and forthright with you. Ask them: how long have you been working in real estate and how many houses have you sold? Experience counts and so does local market knowledge. An experienced agent will be able to give you historical information about properties and neighbourhoods and will be better able to guide you through the process of buying or selling real estate.
Other good questions are do you work with buyers and sellers? What is your experience with each?
Many agents start out working with buyers and don’t find many chances to represent sellers. A listing agent has to be very knowledgeable and experienced to succeed in getting you the highest price for your home. It is important that they are not learning as they go at the expense of your sold price.
What neighbourhoods do you work in? Neighbourhood knowledge is important. Potential buyers will be asking neighbourhood specific questions and your agent needs to know the ins and outs. It is also important that your agent has cultivated good relationships with other agents in the neighbourhood.
Are you an individual working on your own or are you part of a team?
This is important. If you are working with an individual agent can they fully service your listing? How many properties do they have listed at one time? If you are working with a team, who will be your point of contact? Will you be working with one person or will you be passed around?
Buyers should start sooner rather than later
For buyers, the goal is typically to get the lowest price. Now is the time to start looking. Home buying season starts earlier and earlier every year. If this is truly going to be the year with the lack of listings to choose from get out there now and stay ahead of the competition.
Get to know the market
Take the time to follow the market and learn what houses are selling for. Learn about the offer process. How many people are looking for the same thing you are looking for? Discuss your strategy with your agent and use the information readily available at your fingertips.
Look on realtor.ca or Zillow.ca to see what the trends and stats are in any given area. Check out the schools in your area and how they are rated. In fact, it is worth taking the time now – whether you are a buyer or seller – to take a look at how home prices are increasing in your neighbourhood.
Sellers should take advantage of peak selling season
Historically, the peak selling season is Spring. However, this is dependant on several factors, including the weather And supply/demand. Speak to your realtor and find out what the best selling season is in your neighbourhood. This does vary from pocket to pocket. Many people take off for the summer, when the kids are out of school and families are travelling, so summer may not bring the biggest audience or the highest price to your home.
Make sure that you have invested in making the best impression on potential buyers. You want your home to stand out from the rest and to be the one that buyers cannot stop thinking about. Invest in staging and minor touch ups. Invest in the outdoors as well as inside and make sure that your realtor has beautiful images. Read more about staging here.
Buyers should be getting started now
The predictions for the Toronto real estate market this year are that there will be a big lack of listings and an increase in buyer activity. Knowing that, the stage is set for a competitive buyer market so you will want to hit the ground running and beat the crowds. Take your time and go on as many showings as possible so when it comes to making an offer you will know you have the right home. One thing we always tell buyers is that you should never have to talk yourself into a house.
Avoid costly mistakes
It is important to have some guidance and avoid costly mistakes during the buying or selling process. For buyers, be flexible and don’t get caught up in finding the perfect home with the huge dining room. Instead make sure that you know the market, know your budget and take some time to identify what you can be flexible with on your wish list.
For sellers, think about your motivation and be honest and open with your realtor. Remember, you have taken the time to hire a professional you can trust so confide in them, ask them for guidance and then be honest with them.
Do your homework. Go out and look at some homes that compare to yours, follow the sold price on them, get an outside opinion and be ready to launch your home to the market at the ideal time. Buying and selling a home can be both exciting and scary. The person buying and the person selling are both embarking on new chapters in their lives. Keep this in mind when you are reviewing your offers.
Take your time and think about these tips when you are looking for the key to unlock the door on your New Year’s real estate resolutions.