Finding a bargain in the hot Toronto-area real estate market doesn’t have to be mission impossible. Here are eight simple ways you can get a home in the GTA for less.
1. Follow the MLS.
The web makes it a breeze to search homes, lots, rural properties and businesses for sale on the MLS®. Multiple listing services used to be only for licensed Ontario realtors. Now anyone can list their own home. You get more inventory and instant access as new properties come on the market. Go to Realtor.ca to start a search.
2. Find Listings Before Other Buyers.
Most realtors have pocket listings, homes not on the MLS. Some sellers want to protect their privacy or see if there is a market for their home before listing. Commissions can be lower, as an incentive to buy. You can also avoid irksome bidding wars by getting in on off-market gems.
3. Ask Friends and Neighbours.
Gossip gets around, so if a great deal comes up in your area, your neighbours probably know about it. If you can’t hang out at the water cooler because of COVID-19, go online to Facebook or chat rooms in your community. Ask around at the playground, Home Hardware or Second Cup next time you’re social distancing.
4. Buy From Family.
Your parents, relatives or young people making a career move may have a perfectly good home or condo to sell or share with you. You could get your own piece of the pie by buying a 50% equity position. Most elevated (two-storey) bungalows have walk-out basements you can make your own. A little bit of ingenuity goes a long ways. Maybe that attic space or coach house with back lane parking space could be yours in exchange for a joint mortgage.
5. Build a Custom Home.
Building’s not that expensive in the GTA, about $110 to $210 a square metre in 2020, according to Home Builder Canada. You’ll need from 25% to 30% for a construction completion mortgage that pays the contractor when your home is done or progress-draw mortgage that pays as you go along. You can save by:
- picking a pattern home from a residential home builder
- using modest finishes (no marble counter tops)
- going small, giving you less house to clean and lower taxes
- choosing a carport over double garage
- or buying a smaller lot.
Scaling down affects resale value, but it could be worth it to get into a home. For real savings, look in smaller towns and cities outside Toronto.
6. Get On the Good Side
Your parents may be just as happy to hand you the keys to the ‘burbs and downsize as to manage the upkeep and yard work on a big house. Creating a living trust transfers assets like a home or vacation property to heirs while the owners are alive. As long as its revocable and the monthly payments are kept up, most mortgage lenders are fine with transferring property through an inter vivos trust. If the mortgage is paid off, it’s no big deal, although there is a cost to set up the trust. No probate tax is due when your parents pass on and, unlike wills, trust assets are not made public in probate court.
7. Share the Land
Millennials are used to saving their dimes. Nearly 48% of young adults in the GTA still lived at home during the 2016 census. Home prices have nearly quadrupled in the past 20 years, from $250,000 in 2001 to $943,710 in July 2020. What better way to cut costs than to share a plot by building or buying a multi-family home? A quick, one-hour jaunt to Guelph cuts average home prices by over 25% to $692,999 for a detached property. A duplex, four-plex or laneway home makes better use per square foot of all-to-precious land in the GTA.
8. Be Your Own Realtor
Small things can make a big difference. Look for homes for sale by owner to eliminate real estate commissions or use a no commission realty service that charges a flat fee. Owners who list their own home on the MLS® may be open to accepting a reduced offer. Check how long properties have been on the market. Owners may be anxious to sell if their home has been listed for awhile. Fixer uppers may or may not be a bargain, but watch out for homes built between the 1940s and ’70s when asbestos was widely used in floor and ceiling tiles, insulation and siding. A hefty remediation bill for asbestos, outdated electrical wiring or antiquated plumbing is no saving in the long term. Happy house hunting.
Get a Legal Opinion on an Agreement of Purchase and Sale
Axess Law Ontario real estate lawyers can give you a legal opinion if you want to cancel or change an agreement of purchase and sale. Book an online video call any day of the week, day or evening, at times that suit you. We can video conference with you from anywhere in Ontario. Call toll-free to 1-877-552-9377 or 647-479-0118 in Toronto or use our online booking form. In person meetings are available at our Toronto, Scarborough, Vaughan, Etobicoke, Ottawa, Mississauga Winston Churchill or Mississauga Heartland law offices.
Click here to learn more about Axess Law’s real estate law services.
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