Getting Started: Your Guide to Buying a Condo in Toronto

This guide will help you in your quest to purchase a condo in Toronto. Whether this is your first condo or your tenth, you should still get plenty of information from this guide.

I've included everything from steps to prepare for ownership to powerful buying strategies including a property wish list that will help you select the right condo for you and your family.

Let's begin by discussing the necessary steps to prepare you for condo ownership.

1. Decide how much condo you can afford. Typically, the price of your condo should equal no more than three times your gross income.
   
   
2. Prepare a wish list of the needs and wants in your new condo. Prioritize the list and decide which are necessities and which are features you'd like but can live without.
   
   
3. Select three or four Toronto area neighbourhoods. Consider their school districts, proximity to work, its recreational activities, safety and expansion plans.
   
   
4. Do you have enough money for a down payment? How about closing costs and other fees inherent in the condo buying process? On average, expect these costs to be between 2%-7% of the sale price.
   
   
5. Get your credit in order. Obtain a copy of your credit report.
   
   
6. Don't make any major purchases in the few months before buying a condo since this may affect your debt-to-income ratio.
   
   
7. Explore the difference mortgage options and determine which is right for you. Get pre-approved by a lender to help you determine how much condo you can afford. This will also speed up the closing process.
   
   
8. Organize all the documentation a lender will need to pre-approve you for a loan.
   
   
9. Find an experienced Toronto real estate professional to help you search for a condo and assist you in the buying process.

If you're a first-time buyer you may need a little more information prior to purchasing your new condo. I've prepared tips all first-time buyers should know.

• Be selective but realistic

There is no perfect condo so decide what you must have, what you'd like to have and what you can live without. Prioritize the list to help you find the right condo for you.

• Don't ask too many people for their opinions

It will just drive you crazy. Select one or two people you trust -- and who has similar tastes -- to help you look or to turn to if you need a second opinion.

• Decide when you can move

When does your lease expire? Can you sublet?

• Decide if you want a starter condo

Do you want to move up after a few years or do you want to stay in the condo longer and build equity?

• Don't max yourself out by buying the biggest condo you can

Perhaps you'd like to decorate or you need money for maintenance. If you're "house poor" you won't be able to afford these things.

• Make sure you ask your lender enough questions to ensure the best deal

Again, your real estate agent can help you ask all the right questions and get the answers.

• Think resale before you buy

Since the average first-time buyer only stays in the condo for four years, they should be thinking of how it will resell.

Five powerful buying strategies

There are five powerful strategies to consider when buying a condo. Be sure you follow this advice to get the best deal on your new condo.

1. Get pre-approved not pre-qualified. As stated before, pre-approval provides you with leverage when you look for a condo. Pre-qualification, on the other hand, isn't worth much more than the certificate it's written on because nothing has been verified. The lender has just asked questions and, based on your answers, has come up with a determination of how much you might qualify for. A pre-approval is a much more powerful document because you have actually started the loan process and the lender has verified your income, credit, debts, etc.
   
   
2. Sell your current condo first, and then look for another condo. Sales contingent upon the sale of your condo rarely work. Buyers don't usually want to sell their condo to someone who has to wait until theirs sell first.
   
   
3. As stated before, make a list of what you really need in a condo such as the number of bedrooms and bathrooms and the square footage then add the features you'd like to have such as an exercise room or a pool then prioritize the list.
   
   
4. Get a complete list of all available condos that meet your requirements. Look at the condos that best fit your criteria. Don't be pushed into a condo you don't really like.
   
   
5. Read between the lines. When looking at ads by sellers, what's not mentioned is sometimes more important than what is. Remember, they're trying to sell their condo so they want to make it seem as good as possible. Have your agent help you decide if this is the right condo for you. Then visit the condo to see it for yourself.

By following the tips provided in this condo buyer's guide, you will be armed with all the information you need to make a wise decision when purchasing your next condo. Always remember to buy the condo that's right for you and your family regardless of anyone else's opinion.