Quote:

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Originally posted by Rahat M

So we have
1) how to buy
2) where to buy

My question is when to buy?
Should we rent out for another year and wait & watch until the current speculations settle down or there is no such thing as bubble burst with the high influx in immigrants maybe real estate prices will not come down for another decade.

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First time home buyer has a lots of questions and most of the times he/she gets this information in bits and pieces and sometimes misses a crucial piece of information. Since it is a very vast subject and a lot can be said and written, I am taking the liberty of posting excerpts for the benefits of lots of desi's. I hope this detailed post would answer most of the questions a new home buyer may have and would not mind spending precious time in reading this. However, if the mods think that it is too lengthy or not appropriate, I am ready to delete the post as all this information is available at this http://pramodchopra.com/



Mortgage Insurance

'Mortgage insurance' is one of the most ambiguous and least understood terms in the industry. This is because it can take on any of the following radically different meanings in different situations:

MORTGAGE DEFAULT INSURANCE

This is a one-time insurance premium you pay when buying a home with less than 25% down payment, or in a few other situations where a lender is not willing to take all the risk of lending you money. Some examples of this might be:

a non-standard dwelling such as a mobile home on leased land.
a rural property with non-standard utilities (well and septic systems).
a multiple-unit dwelling where you may or may not be occupying one of the units.

Insurance premium is standard, and on a sliding scale according to the percentage of the property value you wish to finance with this mortgage.

MORTGAGE LIFE INSURANCE

This is simply regular life insurance which is used to ensure that, in the event of the death of either of the borrowers, the mortgage will be paid off in full from the proceeds. Since this is not mandatory, an important question to ask of any lender who offers it is 'who is the beneficiary?'. If the lender is the beneficiary, it can be used by them to retire the mortgage in full... which may not be the survivor's desired course of action, particularly if the mortgage is at a much lower rate than the survivor can earn after tax on investments.

MORTGAGE FIRE INSURANCE

All lenders, without exception, require that a fire insurance policy be in effect at the time they fund a mortgage... for the obvious reason that if an uninsured house burns down on a property they have mortgaged, the only remaining value is in the land. While this may not actually cause a loss directly, (due to the high value of many lots) the funds will be unavailable to reconstruct the building, and thus force a sale or re-mortgaging.

MORTGAGE PAYMENT PROTECTION INSURANCE

In recent years, it has become possible to buy income protection insurance specifically to ensure mortgage payments can be maintained in the event of not only disability (now a standard product), but also loss of employment.


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How a Lender Makes a Decision About You

Each lender assesses how likely you are to make your payments, and repay your mortgage in full. To make this assessment, lenders will review the following:

CREDIT HISTORY


Your record of payment on previous and current obligations. Lenders may enquire about your record at the appropriate Credit Bureau.

The only significant item that does not usually appear on the credit report is how well you've made any mortgage payments in the past. If you have recently had a mortgage, the lender will call the previous mortgagee (lender) directly to confirm your history. This is called a 'mortgage rating.'

INCOME


Lenders require that you pay out no more than 30% to 35% of your provable gross income on all shelter costs. This is known as the 'Gross Debt Service Ratio.'

You may have other debt, of course, but in combination with shelter costs, the total of all regular payments should not exceed 37% to 42% of your income. This is the 'Total Debt Service Ratio.'

DOWN PAYMENT


At least 5% of the value of the property in the case of a purchase, (with a default-insured mortgage), should come from your own savings.

JOB STABILITY

Quite a separate issue from the amount and type of income is 'how stable is the flow of income?' While exceptions are usually made, lenders generally look for several years in the same company, or progressive income increases in a succession of related jobs.


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Selecting a Home Type

Often the selection of a first home is a chance event...


friends are selling their condo and will give you a great deal if you buy from them privately.

you drop into a new home sales office and 'fall in love' with a particular model, not to mention the charming sales pitch of the well-practiced salesperson.

your realtor comes across the perfect little semi...and suggests you snap it up quickly 'before someone else does'.

The point is... there are a lot of selling forces out there... you should assert your right to evaluate the options yourself, and then make an informed choice. To assist in this evaluation process, following is a comparison of some of the Pro's and Con's of the different choices.



Condo Apartment

PRO
Lowest purchase price.
Lowest taxes.
Lowest maintenance effort - no snow shoveling or lawn mowing.
Greatest convenience for singles, and empty-nesters. (no children at home)

CON
Hardest to re-sell.
Sometimes difficult to finance with low down payment.
Maintenance fees usually increase the carrying costs substantially.
No private yard - can't barbecue, etc.
Share common walls with neighbours.


Condo/Freehold Townhouse

PRO
Lower purchase price than semi or detached.
Lower taxes.
Lower maintenance effort.
Better re-sale market than condo apartment.
Some important backyard activities possible...barbecues, sandbox, swings.

CON
Harder to re-sell.
Usually harder to re-sell than semi or detached home. (depends on market)
Usually not as much value appreciation as semi or detached.
Don't own the land. (unless freehold Townhouse)
Shared wall(s) and close to neighbours - acceptable as long as neighbours are good.


Semi-Detached

PRO
Good compromise for first time buyer...most privacy at the least cost.
You own the land - which is the appreciating asset...bricks and mortar depreciate.
Readily re-sold to other first-time buyers - therefore good value appreciation.
Easy to finance at best rates.
Many family and entertainment activities possible - yard usually bigger than a Townhouse.

CON
A common wall - acceptable if neighbours are good, but no control over changes.
A higher price per square foot of living space than a townhouse in a similar location.

Detached

PRO
You own the land - the appreciating asset. Value appreciation is usually best for detached because the greatest number of buyers 'aspire' to a detached property.
No common walls, allowing the greatest privacy.
The most prestigious - you are seen as having 'made it' by friends and family.
Lower priced detached homes tend to sell quickly because of the combination of prestige and affordability.

CON
The cost is the highest of all options - both purchase price and property taxes - for similar locations and quality.


Re-Sale Home (vs. New from Builder)

PRO
Price is lower because of some wear and tear. (which varies greatly - check closely!)
You get the benefit of upgrades (finished basement, pool etc.) at a depreciated price.
Established neighbourhood..current neighbours/ other variables are a known quantity.

CON
The home has been used by others.
There is no 'warranty' for major repairs required by law, although it can be specifically arranged.
You often inherit someone else's taste in decorating, which can be expensive and time consuming to change at retail prices.


New Home from Builder (vs. Resale)

PRO
You are the first occupants...the house is an empty canvas for you to add your touch.
Priced lower than new homes in similar recently completed subdivisions...appreciates as soon as construction is 100% complete.
You can choose colours, design features to your own taste as an inclusion in the purchase price, with upgrades negotiable.
There is usually excellent protection from defects in construction required by Provincial Law.

CON
There is often an extended period of time without lawns or paved driveways, and with dust from unsodded areas and construction traffic.
There can be problems with permits or trade strikes that prevent timely completion and occupancy.
Some closing costs apply to new homes that do not exist with resales.


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The Role of the Major Players in Your Purchase

REALTOR

Keeps track of the latest properties offered on the Real Estate market - through the Multiple Listing Service (MLS) and others - which meet your requirements.
Investigates properties which appear to meet your requirements and arranges to view them with you.
Acts as agent for the seller if it is an MLS listed property - unless you agree to have them act as your agent. This is known as Buyer's Agency and means the Realtor is acting specifically and contractually in your best interest - even though the commission is usually still paid by the seller out of the proceeds of the sale.
Negotiates terms and conditions of your purchase with the agent for the seller (if not themselves) or with the seller directly. (if a private seller or their own listing)
Arranges to get information for you, or for certain conditions to be fulfilled, as agreed with you, such as; survey, appraisal (for mortgage purposes), and a home inspection report.
Coordinates closing with the Lawyer, Appraiser, Inspector, and Municipality, as needed.

LAWYER


Ensures arrangements are in place for funds to be available for closing.
Ensures all legal requirements of the transaction are fulfilled - Compliance Letter that no outstanding liens or work orders are in effect; Tax Department's release that property taxes are up to date, determines that the current or proposed occupancy usage conforms to local by-laws, etc.
Coordinates with lenders the setup of legal documents for any mortgage security.
Ensures that all mortgage terms and conditions are met, and that title is clear in order to make undertakings to lender(s). May obtain title insurance on the buyer's behalf if there is any issue surrounding title that may cause a claim or work order of some kind in the future.
Arranges with you the signing of legal documents and submission of remaining funds not provided by the Mortgage Lender(s).
Coordinates closing of the purchase transaction with the lawyer(s) for the seller of the property and the lawyer(s) for the lender(s). Your lawyer is in most cases appointed to act on the lender's behalf.

MORTGAGE LENDER


Arranges for the funding of a real estate purchase which conforms to their lending criteria. These have been set in conformance with their legally regulated role.
Arranges for an Appraiser to inspect and evaluate your property.
Communicates with you and your lawyer to ensure that the value and all their lending criteria and specific conditions for the loan have met to an acceptable degree before providing funds.

APPRAISER


A legally accredited valuator who inspects, and issues a report to the party who engages them which, with certain conditions:
certifies for legal purposes that the price paid by a purchaser reflects the true market value of the property.
ascertains on behalf of the lender that the property value supports the mortgage amount requested.
provides a purchaser a second opinion relative to their Realtor's assertion as to the value of the market property (to be) purchased.

HOME INSPECTOR


An individual, not requiring Provincial licensing in most cases, who inspects a property on behalf of a purchaser (usually as a condition of a purchase agreement), to
identify the soundness of the structure and any improvements.
note any specific deficiencies and their impact on the value of the property.
indicate the approximate cost to correct any identified deficiencies.
Their final product is referred to as a Home Inspection Report

BUILDER'S REPRESENTATIVE


A sales representative employed by a Builder to arrange the sale of new homes to the buying public. Although they are governed by regular consumer law, their duty is to the builder... they are in fact the Seller's Agent.
Provides information to buyers on house models, lots, costs of purchasing, municipal procedures and requirements, New Home Warranty programs, and all other related features of the property.

MORTGAGE BROKER


A Mortgage Broker works for you, the client, whereas Bank Specialists are employed by the financial institution.

The benefit of using a Mortgage Broker is the fact that they have the ability to offer you mortgage products from a number of financial institutions. Because a Bank Specialists works for the bank, that means that they can usually only offer you their institution’s products.

Brokers are typically paid the same amount no matter what rate is offered to the client. Bank specialists’ rate of pay is generally reduced in direct relation to the amount they discount your rate from the bank’s posted rate.

Depending on your Province, Mortgage Brokers must be licensed and are subject to a strict set of requirements. Accredited Mortgage Professionals (AMP) must take continuing education courses in order to maintain their accreditation. Bank specialists are not licensed and require no formal training.

Because Mortgage Brokers don't work for a specific lender, your assured that you will be given impartial advice. A bank specialist has a limited number of their own institutions products and while it may not be the best mortgage product out there, they will do their best to sell you their institutions mortgage product cause if they don't your going somewhere else.

Mortgage brokers use their knowledge and experience to negotiate the best possible rate and product for you from a number of lenders. When you see a bank specialist, that mortgage negotiating is typically left up to you.

For conventional financing, the services of a mortgager broker are generally provide at no cost to you. If there is a cost, you will be advised of those costs up front.

So in conclusion, if you have the ability to use the services of a professional Mortgage Broker and have that Mortgage Broker do all your mortgage leg work at no cost, why would you not take advantage of the offer?

FYI, Today, 75% of people in the United States use mortgage brokers. Because the Mortgage Brokerage Industry is relatively new in Canada, the numbers are lower, however, those numbers are increasing every year.



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The Costs of Purchasing
(A number of these costs vary by Province, and many change frequently)


1. PURCHASE PRICE
The starting point in your calculation... if you're like the average first-time homebuyer you'll need a mortgage for the majority of this!

2. LAWYER'S FEES
Depends entirely upon the deal between you and your lawyer. Be sure to ascertain exactly what this will amount to in a worst-case situation. Usually ranges from $350 to $2,500 depending upon whether one or more mortgages are to be drafted and registered.

3. LAND TRANSFER TAX
A tax payable to the Provincial Government by the purchaser upon the transfer of title from a seller. In Ontario a simple formula applies*:


First $55,000; One half percent. (0.5%)
$55-250,000; One percent.
Over $250,000; One and a half percent.
Example: Price = $370,000: LTT = ($55,000 * 0.5%) + ($195,000 * 1%) + ($120,000 * 1.5%)
= $275 + $1,950 + $1,800 = $4,025.

*Please check with your Realtor as to the rates applicable in your location. SUBJECT TO CHANGE

4. REGISTRATION FEES
Fees paid to the provincial government for recording a title transfer, mortgage registration or other instrument such as an Assignment or Lien with the local authorities.

5. DEFAULT INSURANCE
This is a Federal requirement for lending institutions which helps many people in Canada purchase their first home, or re-purchase after they have lost equity. If you are buying a home for less than 25% down payment, or in other cases where the lender requires insurance against your possible default, a sliding scale of fees applies, depending on the percentage of the purchase price required in a first mortgage (some minor exceptions). For example, as of May 1997 Canada Mortgage and Housing Corporation (CMHC) and its competitor MICC (operated by GE Capital) charge a 2.5% one-time fee - which can be added to the mortgage - for any mortgage over 85% of the purchase price. See also Mortgage Insurance for a definition.

6. COMPLIANCE LETTER
Required in many municipalities throughout Canada before a property transfer can take place. This is an acknowledgement from the building department that the property either has, or is clear of outstanding work-orders. Work-orders are specific clean-up or fix-up requirements that the owner must complete, particularly before a transfer of ownership.

7. TAX CERTIFICATE
At the time of a sale, the lawyer for the buyer must confirm that local taxes have been paid up to date. If they are, a Tax Certificate is issued, from which any adjustments can be made - usually requiring the buyer to compensate the seller for any prepaid taxes. If they are not up to date, the municipality requires that the seller pay them off from the proceeds of the sale. If there are insufficient proceeds, then it may fall upon the buyer to pay them.

8. PROVINCIAL 'NEW HOME WARRANTY PROGRAM' PREMIUMS - NEW HOMES ONLY!
A third party (provincial) warranty program between a builder and a buyer. With the exception of Ontario and Quebec, membership in such a program is voluntary for the builder. Through these programs, your home is guaranteed against defects for at least one year. All homes with a high-ratio insured mortgage (greater than 75% loan to value) must be enrolled in such a program.

9. MISCELLANEOUS MUNICIPAL LEVIES
Special levies can be charged by municipalities to recover the cost of special services, if these services cannot, for some reason, be funded out of general revenues, or apply primarily to homebuyers. Examples: Water meter installation; road improvements, sewer improvements.

10. MORTGAGE APPRAISAL AND APPLICATION FEES
Although often paid by the Lending Institution, these fees (a few hundred dollars each at most, unless the property is exceptional) will usually have to be covered at the time of application for a mortgage.

11. HOME INSPECTION
A report commissioned by a property owner or purchaser, usually to verify the condition of a property prior to the 'firming up' of a Real Estate transaction. The scope and detail may vary, but most reports indicate the specific problem and the cost to repair. Unfortunately, no licensing is required, and this service is not specifically regulated other than by general consumer protection legislation. The best safeguard against inadequate work is to ask for the resume of the Inspector, and if possible check references from previous customers.

12. LAND SURVEY
The legal written and/ or mapped description of the location and dimensions of your land. The survey should also show the dimensions and placement on the lot of any structure, including additions such as pools, sheds and fences. An up-to-date survey is often required by a lender as part of the mortgage transaction.

13. CONNECTION CHARGES
Some local utility companies (hydro, gas, oil) charge a fee on closing to connect new buyers up to their service. More normal, however, is an extra charge on the first billing.

14. PROPERTY TAX AND PREPAID UTILITIES ADJUSTMENTS
If the previous owner prepaid property taxes or other utilities, they will be credited the prepaid portion on closing. If they paid all their taxes by April, expect a large adjustment cost on closing!

15. INTEREST ADJUSTMENT (IA)
If you arrange to make your mortgage payments monthly on the first day of the month, and your transaction closes after the first day of the month, your lender may charge you interest on closing up to the first theoretical payment date, called the Interest Adjustment Date (IAD). This can be a sizeable amount, and can often be negotiated down (or away).

16. GST
On new homes only. Fortunately the 6% is almost without exception paid by the builder. Not a bad idea to raise the subject, though. Don't include in your calculation.


EXAMPLE 'CLOSING COSTS'


Lawyer's Fees (Local) $1,000
Land Transfer Tax (Provincial) $2,000
Registration Fees (Provincial) $200
Default Insurance (Federal) $3,000*
Compliance Letter (Local) $100
Tax Certificate (Local) $25
New Home Warranty Program premiums (Provincial) $1,000
Miscellaneous Municipal Levies (Local) $250
Mortgage Appraisal and Application Fees (Local) $200
Home Inspection (Local) $300
Land Survey (Local) $750
Connection Charges (Local) $200
Property Tax/ Prepaid Utilities Adjustments (Local) $1,500
Interest Adjustment (Local) $1,000**
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TOTAL POSSIBLE COSTS $11,700
ADJUSTED FOR * ITEMS $7,700

*May be financed.
**May be offset by Lender.

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Using an RRSP to buy home as first time home buyer

In February of 1992, the Canadian Federal Government introduced the 'Home Buyers' Plan' (HBP), which allows RRSP planholders who are also first time home buyers to use up to $20,000 of their RRSP to apply to the purchase of their home. The plan, extended twice, is in effect as of July 1997 until further notice.

Up to two partners in the home can combine their RRSP's for a total maximum of $40,000. The only subsequent requirement is that they pay the withdrawals back into their plans (without further deductions) over a maximum of 15 years. Failure to do so will result in 1/15th of the RRSP initially withdrawn having to be added back to taxable income in any year the minimum re-deposit is not made.

One very good feature of the HBP, exploited by several of the major financial institutions (usually in cooperation with major Real Estate chains), is the ability to borrow money to top up your RRSP plan using accumulated RRSP eligibility limits. If your tax assessment notice indicates you are eligible for, say, $18,000 in contributions in the current year, and you already have $4,000 in a self-directed plan, these institutions will lend you - subject to a credit check - the $16,000 to buy the RRSP required to bring you up to the $20,000 HBP limit. You may wish to borrow the whole $20,000 to obtain the maximum tax deduction.

A loan for the RRSP to be used as your down payment allows you, in effect, to borrow your down payment over the next 15 years.

The idea is then to claim the eligible deduction against your current year's income in order to get a large tax rebate. This rebate can then be used either to pay down the loan, or applied to the cost of buying the home. Here, of course, the amount of tax you're paying each year is an important factor. If the $16,000 deduction in this example results in, say, a $5,000 tax rebate, then that's all the 'free cash' you actually net from the process.

If, on the other hand two partners each earning $80,000 per year take their maximum RRSP of $20,000 each in the current year, they could net $15,000 or more 'free cash' in total.

You are then allowed to withdraw up to the $20,000 maximum from the RRSP 90 days after topping up or creating the plan, subject to the re-deposit requirements described above.

Here's the catch for those thinking of borrowing the money for the maximum RRSP: Unless you're planning to repay the RRSP loan quickly, or are able to extend the terms significantly this has the effect of greatly increasing the monthly payment, thus decreasing the chances of qualifying for a mortgage because of much higher 'total debt servicing ratio'. This is the proportion of your gross income required to service both the home related costs and other monthly obligations - usually a maximum of 42%. Another $600 per month could well make the difference in whether or not you'll qualify for a mortgage.



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Getting a Mortgage Pre-Approved Before You Buy

Regardless of how certain you are that you will qualify for a mortgage, it is always an excellent idea to formalize this certainty in a prequalification certificate from the mortgage lender of your choice. This will officially address any questions about whether or not you qualify - including your eligibility for the various programs - and enable you to make a firm offer for the home of your choice. As most Realtors will tell you, a firm offer adds an awful lot of leverage to price negotiations!

You will submit a pre-qualification application directly to the lender of your choice for final checking of your personal details, and the issuing of your prequalification certificate. After a brief telephone contact from the mortgage lender discussing options, and requesting you to send proof of income and employment, you can be 'pre-qualified' with the absolute minimum of fuss - and the maximum of convenience.

After you buy your home, simply send in the property and offer details, along with any other information requested, and your actual mortgage can be approved within hours.



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What Type of Mortgage You Should Get
If you are buying a home with less than 25% down payment your choices of mortgage products and terms are somewhat limited... 3 year fixed rate or longer under the regular CMHC Program and 5 years fixed rate or longer under the 5% down program.

However, if you are not constrained by the insurance requirements of a high-ratio mortgage there are many options available... they are summarized below. (Note: Not all lenders offer all types of mortgages.)



CATEGORIES
Fixed-rate 6 month, 1, 2 & 3 year (open, closed and closed-convertible)
4, 5, 7 & 10 year closed.
Variable-rate 3, 4 and 5 year (open, closed, closed-convertible and capped)
Split-term Combination of all possible terms (6 month through 10 years)
Number of portions depends upon lender...3 is most common;
5 is maximum currently available with some financial institutions.
Self-directed RRSP A specialty mortgage - term optional - rate within CMHC guidelines.
Invest your own RRSP funds into all or part of your home mortgage.



DESCRIPTION OF TYPES AND HOW THEY APPLY TO YOU


Long-term

Annual prepayments... traditionally, 10% to 20% of the original principal balance have been allowed as a lump sum prepayment once a year, often on the 'anniversary date'. Recently, options of up to 20% of the original balance payable on any payment date have been added to this feature. Finally, the 'double-up and skip-a-payment' feature has been included in many offerings. This allows a borrower to 'bank' extra mortgage payments for a rainy day, at which time they can just 'skip', with the added benefit that, if it never 'rains', principal is permanently reduced, along with the interest cost.

Short-term risk and variable
If rates are low and stable, and/ or you have decided to take the 'staying short' strategy regardless... you can generally pay a significantly lower rate (by up to 2%). This is achieved by simply rolling over your term every 6 months, or having your rate float against prime - with the option of locking in to a longer term at a later date. This is not for everyone, however, as sudden upward rate movements - not unknown in Canada - can cause severe stress.

Any term 3 years or longer is considered 'long term' in today's economy. Because long-term rates are usually higher than short-term rates, many Canadians who have a choice do not select this option. There are many, however, that consider a long term mortgage necessary due to their exposure to rate increases relative to their inability to manage a significantly higher payment.

Split Term
A mortgage which allows you to minimize - or hedge - your interest rate risk by splitting your mortgage into 3 to 5 parts.
For example: A $150,000 mortgage could be split into five $30,000 segments with terms of 6 months, 1, 2, 3, and 5 year terms negotiated at today's best rates.
The average rate (say, 6.25%) would rise or fall much more slowly than changes in the market, however, as only the shorter terms are affected by even the most volatile rate movements over the first few years.

Protected Variable
In 1993 several Canadian Banks introduced the protected variable rate mortgage, which floats at about prime plus 1%, and is capped at (i.e. will never exceed) about 1/2% above the posted 5 year rate. It does offer a way to reduce the risk of floating, while preserving an acceptable long-term rate. (This type is also known as the 'capped' variable rate mortgage).



Prepayment Options

Payment changes
Most mortgages now allow the amortization to be adjusted by increasing the payment on closed terms by 10% - 20% per year, once annually.

Payment Frequency
Most mortgages now come with the option to pay your mortgage at a frequency that matches your cash flow - weekly, bi-weekly or semi-monthly. The added benefit of the 'accelerated' weekly and bi-weekly, payments is that by dividing a regular monthly payment into two or four respectively, and deducting it at the new interval, an extra payment a year is made directly against principal. The surprising effect of this one extra payment a year is to reduce the amortization of the average mortgage by up to 6 years, with enormous savings of cash at the end of the mortgage term.


SUMMARY

If you are risk-avoider... go for a fixed rate long-term mortgage, or hedge your bets with a protected Variable Rate Mortgage. If you're a risk-taker, simply stay with a short-term mortgage and watch closely for the signal to lock in a longer term deal. Wherever you can stand the additional cash flow requirement, increase your payment frequency and amount, and prepay principal wherever possible.
Remember... because mortgage interest is not tax-deductible, every dollar you pay off your mortgage gives you an AFTER TAX RETURN of whatever your rate is, because you're saving interest you'd otherwise have to pay with after-tax dollars

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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

Whoa! Tons of info. there, thanks Pramod!

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Are you there?

Thanks Pramod,

This was real good information.

Thanks parmod

you gave us all a very detailed basic info for a first time home buyer.

Now, i know how i will spend my long weekend

Thanks once again for the 'birds view'

seenappa

Kudos Seenappa for this wonderful thread.

Eventhough I'm not in the same boat as all of you, I'm doing my own research on this topic just for learning this whole business.

My 2 naya paisas on this issue:

1.In 2003 when I landed in Canada and was near Square One, I used to find many empty locations. Look at them now in September 2006, they have all been filled with fancy Condos.The most wanted piece of real estate is the Wallys restaurant right near the Central parkway /HWY 10 intersection and he is sitting out to make a Lotto 69 when he sells his place off !.

2.I've met several veterans, who have repeatedly told me that Toronto ended at Dundas street 25 years ago and beyond it was all Jungle. Look at where Square One is today.

3.I learnt one of the Solarium-Apartments near Square One is up for sale, but no takers at that price as there atleast 500 Apartments waiting to be off loaded into the market in the next 6 months.

4.I Know atleast 3 condos available on the block near Etobicoke which are available atleast $30K below the price the owners bought it 2 years ago.


The reason why I've mentioned these points is that what is an opportunity also becomes a risk when the tables turn. It was worth investing in mississauga when nobody was there, but now there are plenty of them doing the same.

My thought on this is to look at places slightly beyond the perimeter, where you could get a bigger place like a semi-detached/detached at the same price of a townhouse/semi-detached now and where the property tax/maintenance are low and wait it to appreciate. I gather the two things that need to happen for your property to appreciate 25% is for a shopping mall and a hospital to come near your location. Unlike India, the schools are the same and the shopping places are the same. You do not get something special by staying in a Desi community other than gossip.

How about Oakville, Milton, Cambridge, Orangeville, Georgetown and some places enroute to US of A for starters ?.

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Speech by Thomas Friedman of The New York Times....

"When we were young kids growing up in America, we were told to eat our
vegetables at dinner and not leave them. Mothers said, 'think of the
starving children in India and finish the dinner.' And now I tell my
children: 'Finish your maths homework. Think of the children in India
who would make you starve, if you don't.'"

Yesterday I met a guy who had listed his semi in Mississauga (prime location: Eglinton and Mavis) for 315k but managed to sell his house at 290k....Thats about 8% off the listing price.


Another guy whom I met during a lunch break was complaining that he couldnt sell his condo at 20% less (than his buying price; near sq. one) since some time.

Whats going on? I am one of the home hunters too, so jumped into this thread.

Nothing against any realtor, just trying to get into the market at the right time.... Help please!!

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No trees were killed by this post, but a large number of electrons were terribly inconvenienced.
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George Malley: Hey, would you, uh, love me the rest of my life?
Lace Pennamin: No. I'm gonna love you for the rest of mine.
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None of us knows God until someone introduces us - Life of Pi