Well, here we are Friday the 13th and wouldn’t you know it, almost everyone is scared to do almost anything – especially buy real estate! “Prices forecasted to drop 10% this year”, yells the newspaper! It is a scary time!
Well, for our very good friends, they didn’t think too much about it. Why? Because they are buying a home that they plan to own for many years. They aren’t trying to speculate the market will go up, and they don’t plan to flip the property. They bought it because they are tired of renting, about to get married and likely wanted to stop paying their landlord’s mortgage. And I commend them for that decision!
Before I go on and on about how excited I am for them, I wanted to share a bit of info as to what they did before they bought. You see, while everyone else has stopped buying, our friends have been carefully looking for not only a house they can fall in love with, but for a good deal in the process.
After nearly a year of going to open houses, checking MLS and just generally figuring out what they could get for the money they had, they decided that they wanted to buy a new home. Ideally, they were looking for one that was not quite finished so they could add their own special touches to the place.
Last week, they found what they were looking for on the West side of Toronto. It’s a large townhouse in a new development. They learned that the builder hadn’t sold a unit since late summer of ’08 and still had nearly 25% of their units to sell.
Our friends know that the unit is priced right, the builder has a great reputation in Toronto, and the development is in a great area. The units are just not selling because everyone is SCARED to buy! But, the beauty of our friends’ situation is that they aren’t scared and they were able to get an extra special deal out of it because they were ready to buy it.
They spent a lot of time researching the builder and other new development offerings. They learned that negotiating on price was going to be tough but that they would be likely to get just about any upgrade they asked for. They still pushed the price down a bit. But, more important to them is that they got everything they wanted in this house for no extra charge including hardwood on the stairs, extended granite counter tops in the kitchen, high end hardware and faucets, $1000 more to spend on higher end washer and dryer etc. The best part is they negotiated almost $15,000 in extra upgrades along with getting the price down several thousands of dollars below asking.
They excitedly told us that they were able to put EVERYTHING into this place that they wanted. In fact, what would have been a good home is now a perfect one for them. And, they are only going to be paying 4.2% interest on a 5 year fixed term mortgage! Fear of what the market is going to do next year hasn’t even been a consideration for them.
The point of the story is that if you know what you want and are in a reasonable position to qualify and pay for a new property, there are some great deals out there right now. But even more importantly, if you are buying for the long term, as our friends are, you shouldn’t worry if now is the right “time” to buy. Their home may drop in value next year, and maybe even the year after, but eventually that property will increase again. And, in the meantime they will have spent many years enjoying life in their perfect home!
So, what are you waiting for? And what are your goals? If you are buying a property as a home or as a buy n’ hold, if it’s for the long term there is no time like the present! And, maybe, you will get a great deal in the process while everyone else is running scared like it’s Friday the 13th all year long!!