buyers guide. photo credit: Aaron Colwell
LEARN ABOUT TORONTO REAL ESTATE FROM A TORONTO REALTOR®
Avoid 2 of the most common BUYER MISTAKES 3 Realtor ® Myths DISPELLED PLUS: 3 Toronto Hoods that YOU WILL LOVE! Not intended to solicit anyone under agency agreement
BUYING? 3 THINGS TO CONSIDER FIRST BANK or BROKER? To use your long-time banker, or a Mortgage Broker, that is the question. The answer is: It Depends! If you believe that your relationship with the bank since grade 9 means as much to the bank as it does to you, you may be mistaken. After-all, banks are BIG, and most of us are small (just keeping it real). Many of my clients have enjoyed better success using Mortgage Brokers. There is no cost for their service, and they fight for you. Think of them as your big friend in school who protected you from the bullies.
HOW MUCH DOWNPAYMENT? Wait until you have 20% downpayment, or buy when you can? Our parents would say wait until you have 20%. The challenge for most of us is that in the time it takes most buyers to save 20% (when the average home in Toronto is more than 600,000.00) the market will have incresed so much that you've lost years of price appreciation in the meantime. So there's what parents like - and then there is what gets you into themarket.
BUDGET Your bank may approve you for MORE than you expect. Then you have a very important decision to make.. My two cents are as follows: If you crunch your monthly budget, including the mortgage payment, property taxes, condo fees, utilities, etc...and to make the mortgage work you are rationalizing that you will never take another vacation or go out for dinner unless it's McDonald's, then you are on the path to property rich, penny poor. And that's not a fun situation to be in. So don't assume that because the bank says you can afford it, you should exercise your full credit availability. LIve below your means, if possible.
# 1 BIGGEST TORONTO BUYER MISTAKE: LISTENING TO TOO MANY OPINIONS By Jim Emilson
OK - so you're asking, what is Jim getting at here? So since you asked, I am going to answer you. Short-Term thinking in real estate is what I think of as a chicken crossing the street scenario. Why does a chicken cross the street? It's obvious, to get to the other side. But for many first-time buyers, they become 'chickens' in the sense that they are afraid to cross the street. They may be getting advice from all different angles (mom and dad, grampa and gramma, friends, old school-mates...the list goes on). Everybody has a different opinion on whether they should buy now or wait. Some are adamant they should buy now. Others are adamant they should wait 'until the market cools down'. But nobody knows when that will be. Still others say buy as soon as you have 20% saved up. But if that's going to take 5 years, the home you buy then may costs 10's (or 100's) of thousands of dollars more than it does today buying with what you currently may have, ie: 5%, 10%, or 15% down. So at the end of the day, buying real-estate in Toronto (or anywhere for that matter) should be considered a long-term investment, that in the meantime, puts a roof over your head and keeps the snow away. If you expect to live in the home you purchase for 5-10 years, then in all likelihood, no time is a bad time to purchase real estate. Bumps and valleys will smooth out over time, and in the meantime, you are paying down principal on your mortgage. These are my opinions only, you need to make a decision that fits your financial situation and risk tolerances. Whatever your decision is, make sure you can live with it. because at the end of the day, your opinion and experience is the only one that counts!
3 INCREDIBLE NEIGHBOURHOODS TO LIVE IN CABBAGETOWN
NUMBER 2 BIGGEST BUYER MISTAKE: NOT UNDERSTANDING THE FINANCE CONDITION THE BEACH .
Tom and Sally's agent has explained that, because they will be competing for the home with other equally eager and enthusiastic prospective buyers, they are unlikely to succeed if they include a condition on financing. What will Tom and Sally do? At this point, Tom and Sally have been good little buyers and visited their bank, and then a mortgage broker, as part of due diligence. They are pre-approved for a mortgage amount up go $800k. The home is listed for sale at $699k, so Tom and Sally feel comfortable offering up to $800k. Are they safe doing this, or not? NOT NECESSARILY.
RIVERSIDE
Tom and Sally don't understand that a bank pre-approval is simply that, "pre-approval". The bank is going to look a that specific home, send out their own bank-hired third party appraisal company, and then determine if they are willing to lend Tom and Sally the necessary funds. What happens if the bank says the house is worth only $750k? The consequences for Tom and Sally could be devastating. If they have an additional $50k in the bank, then they can make up the difference. IF they do NOT have these funds, and if their mortgage broker cannot find alternate funds, then they will not be able to close the purchase transaction. The buyer would may the right to sue Tom and Sally for damages. The moral of the story is: make sure you really understand the ramifications before entering into an agreement of purchase and sale. An experienced Realtor will help you to assess these situations. I am not an expert on mortgage finance: For the best advice, make sure you have an experienced mortgage broker or banker.
CHOOSING THE RIGHT
NEIGHBOURHOOD By Jim Emilson Photography by Aaron Colwell SO, you have put firstthingsfirst, which by now you know means getting your financial house in order. A logical next steps is to narrow down the list of neighbourhood that match your lifestyle. Now you may say to me "Oh, I know exactly where I want to live." And if that's the case, good for you! Maybe it's the neighbourhood you grew up in, possibly it's the neighbourhood you are renting in right now. But here is what sometimes happens. Your preferred neighbourhood real estate happens to be on fire right now! Every house seems to be listed within your budget, so you assumed you were ok. But once you begin to work with a Realtor, you learn these houses are actually selling for 100k or 200k above list price. What do you do? Here is a recommendation that has helped many of my clients.
Just like most things in life, you can't always get what you want (someone should make a song with that as a chorus). But you can often come pretty close to getting what you want. Rather than limit yourself to just one neighbourhood, put together a list of 3 neighbourhoods and list them in priority sequence. So your favourite neighbourhood is 1, second favourite 2, third favourite 3. Then, get out every Saturday and Sunday afternoon for a few weekends and hit open houses in the target neighbourhoods. Check out the parks. Check out the schools. Check out the neighbourhood cafe's. Drive around the neighbourhood at different times of day, including evenings. AND before you know if you may find that several neighbourhoods appeal to you even more than you expected they would.
Go To www.jimemilson.com to learn more about Toronto Neighbourhoods.
# MYTHS ABOUT REALTORS DISPELLED "BUYERS SHOULD WORK WITH LISTING AGENT" Some buyers mistakenly believe that working with the Listing Agent gives them the best opportunity to get a "deal." The reality is that the Listing Realtor® has a duty to obtain the highest possible price and best terms for the SELLER. On the other hand, when your Realtor® represents YOU ALONE and not the SELLER, he/she is 100% your advocate. In our adversarial system, you need every possible edge. That includes having your own Realtor®
"AS A BUYER THE REALTOR IS FREE SO IT DOESN'T MATTER WHO I USE" Ugh. Worst Realtor myth ever! Do you realize how much time you will spend with this person? In our hot Toronto market, by the time you buy, you will have spent a LOT of time with this person. Like any relationship, if your Realtor's® values and principles don't match your own, it may be a bumpy and uncomfortable relationship.
"REALTORS ARE ALL PRETTY MUCH THE SAME" Ouch - that one hurts. Did you realize that the average Realtor in Toronto participates in facilitating only around 2 deals in an avg year? In stark contrast are professional Realtors who work the business full-time and have the experience to truly provide outstanding client service. The top 1% of Realtors in Toronto do more business in a 2 week period than average Realtors in an entire year. When you have this kind of experience on your side, you will be helped to negotiate the best terms, and will be protected from the perils of inexperience.
WORKING WITH A REALTOR By Jim Emilson
Do you really need a Realtor®? Yes, and here's the reason why. Realtors are licensed professionals, who have the education, legal knowledge, and (hopefully) years of experience to walk you through the process. A well-chosen Realtor® will have expertise in the type of home and neighbourhood you are interested in, the current price trends, a general understanding of mortgage finance, and a keen eye for danger signs. Because a professional Realtor® is required to take ongoing professional development courses, he/she will have a well rounded understanding of potential pitfalls that buyers should watch out for. He will understand how a Home Inspection is carried out, what it can identify, and what it can NOT identify. And it goes without saying that experienced agents tend to have a large and reliable network of trades people that you may need after move-in. More than that, using an experienced Realtor with high-level experience negotiating and navigating deals may save you thousands, or even tens of thousands of dollars. Don't assume all Realtors are created equal. See 3 Realtor myths at left of page to learn more.
WHAT PAST CLIENTS SAY ABOUT JIM... "The staging done by Jim's team made our home look magnificent" MICHELLE A. "Jim has proved invaluable in helping me in my purchase of two properties. The service Jim provided was fantastic." STUART M. "What makes Jim a great realtor is the support he’s provided us in the years after the closing date. He has helped to keep us upto-date with the activity around our new home and to provide us insight into the value of our largest investment." JON AND KAREN V. "He is a caring and supportive individual who always went far beyond what I expected. If anyone doesn't trust him to provide support and find creative solutions they are making a big mistake. You cannot ask for more." ALLAN AND YULIA F. "Jim is great and I would highly recommend him to anyone looking for an agent ready to earn not only your trust but earn your confidence." ERIC P.
KNOWING TORONTO HELPS By Jim Emilson
I grew up on the prairies of Saskatchewan. The joke growing up was "we can watch our dog run away for days." That flat land was the backdrop against which I played hockey on outdoor ponds, and developed an appreciation for what hard work can accomplish. You see my grandparents were farmers going back generations. But I saw a different future, and it involved Toronto. So 22 years ago I moved to the city, and built a new life. Over that time I've lived all over this great city: including Downtown, Riverdale, The Danforth, The Beach, and currently, Mimico. And I've helped clients buy and sell in just about every key neighbourhood. My wife runs a food blog, so it's safe to say that we are Foodies (I like eating food, she likes making it). I think that KNOWING the City, inside and out, from East to West has been a huge help to my clients. And I'm happy to put that neighbourhood expertise to work for you when you decide to buy or sell.
BUYERS GUIDE
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November 2016
MEET JIM
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I think I was always intended to end up working in real estate. My grandfather built the first prototype modular home in Canada. My father flipped houses. I got a taste for the industry early in my life,but I took a rather unusual path to get there... A little background on me: I grew up in Saskatchewan, in a town of 500 called Lashburn. When I was in Grade 1, my parents moved my two siblings and me to the “big city” of Lloydminster - it had a whopping 10,000 people! Talk about culture shock! I always wanted to live in Toronto, though, and I was thrilled to finally move here in 1994. One thing my parents always stressed to us was the “pioneer work ethic.” If you wake up early, work hard, and your handshake means something, you will prosper. It’s something I still live by today. As a serial entrepreneur, my dad definitely practised what he preached. He was always starting new businesses. He almost bought a real estate franchise when I was 15 and I remember thinking “That would be so awesome!” You know, just what the typical teenaged boy would say. His entrepreneurial spirit definitely rubbed off on me. I started a small janitorial company when I was still in high school. After I graduated, I went to work for my dad and older brother, selling commercial-grade disinfectants to school districts and hospitals across the Prairie provinces. Eventually, I went on to sell self-adhesive felt pads (the ones that you put under your furniture to keep it from scratching the floors) to retailers all over Canada and the U.S. Yet, real estate never left my mind, and right before 9/11, I got my license. Of course, the tragedy changed everything. The market wasn’t really doing anything at that point and I had other business interests, so I kept working on other things and built a niche distribution channel servicing commercial real estate developers across Canada. But finally, in 2012, I was able to free myself up to begin practising real estate full time. I joined Royal LePage and the rest is history. One of the things I love most about my job is the opportunity to form personal relationships with my clients during such significant times in their lives. Seeing a young couple buy their first home is so rewarding. I also find it really satisfying to help my older clients who are downsizing. If my grandparents were still alive, I would hope someone like me would have helped them. I’ve never had to advertise myself. When you do a great job for your clients, the business follows, and it’s always been that way for me. When I’m not working, I’m spending time with my wife, Jennifer, who is a food blogger. We have two Cornish Rex cats named Phineas and Zelda who are somewhat famous on Instagram (they have more followers than I do!). I also enjoy cycling, playing squash, and checking out new local restaurants. I’d love to find out more about you and how we can work together. Contact me soon and let’s set up a time to talk. My office number is 416-690-5100, or text/call my call @416-523-3964. Until then.....keep smiling!
Not intended to solicit anyone under agency agreement.