Should I plunk down $400,000 on a CONDO that have not be built but ??
WOW, the CONDO market contained by Toronto Canada is HOT, HOT, HOT !!I've seen over 200 general public waiting in strip for the lucky opportunity to be one of the few people to put down $400,000 or more on a Condo purchase, verbs unseen, on a building that hasn't even begun even so. The earth hasn't even be turned on the building site. Talk about pre-selling or what!
Anyways, I've be told that this is the steal of the century and that I had better hurry up and put my 30% down explanation the units be selling fast and I didn't want to risk losing such a great opportunity.
But I want to ask, with the housing slowdown contained by the USA happening, how long beside the Canadian market preserve skyrocketing ??
Answers: The developer relies on getting presells to make the project work, but there's incontestably risk there. If you are not planning for this to be your primary residence, afterwards it is a speculative move. Do not assume that there will be a marketplace for the condo, at a higher price, when construction is complete. Many condo buyers contained by Florida are walking away from their 20 to 30 percent down payments because the value of the condos enjoy gone down by more than that amount during construction. If Toronto condos have be appreciating rapidly, they will plausible experience a similar correction at some point. Good luck to you.
Look into this guy's record. Is he shady? Is this a first time out? If something seem too good to be true, it usually is.
Seems insanely illustrious to me, but then, I live contained by So. Calif.
Pre-sales are often a hype. They try to acquire more then the open market price, but tell you it is below open market. Your best bet, especially at this time, is to wait till they are adjectives sold and then see what the flea market price is.
I am not familiar near the real estate situation within Canada, but like surrounded by the US a few years ago, you may be in a existing estate bubble now. Be particular!
A Tale of Condos in Two Cities [with apologies to Charles Dickens]
Down surrounded by San Diego, CA [USA] two of our closest friends jumped onto the condo pre-built bandwagon and bought a part in a glorious rise being built downtown. It have views of San Diego harbor and the together nine yards.
Off to the East, a guy I know and his wife also jump onto the condo pre-built bankwagon in Miami, Florida. It too is a high-rise and have views of the fjord and harbor.
One couple is very joyful with their purchase. The other is suing the developer, who is suing them because they've refuse to complete the purchase.
What makes the difference?
The couple contained by San Diego bought into the first such project that came along after several years of no downtown construction. Their project is complete, full of cheerful owners and tenants, and the helpfulness of their property is up over 35% from their purchase price.
The couple in Florida bought into the 8th or so such project proposed within their city after several years of no downtown construction. Despite the entire project having sold out within the pre-built sales phase, at hand has be trouble since week seven of the 5 year project to build it.
By the time construction actually begin in Florida, in attendance was a construction boom [no such contained by SD when that tower's construction began]. A construction boom means that in that is a shortage of workers and wage rates have begin to go up. A construction boom also way that the cost of concrete and steel have gone up and will verbs to go up.
Ah -- developer pre-sold at fixed prices but when construction go to start, costs were over 20% above his plan. So he made a few change to cut costs on the project. The changes be not well received by the buyers, who claim [and at tiniest partly rightly] that the change alter the character of the project and fall the size of a significant proportion of the units. Those buyers and so claim in their lawsuits that developer isn't/didn't build what they be promised and therefore they can't be held to the contract, or are due significant price reduction, or both.
Of course, developer has built the building in a minute and spent the pre-construction deposits. [Florida law does not require them to be escrowed next closing the sales.] So he doesn't enjoy the money to refund deposits.
Worse, so heaps condo units come onto the market, and are still individual built [it takes two to three years minimum to build these towers] that prices contained by the market hold collapsed.
when prices collapsed, many of the investment buyers realize that if they could only grasp their money back from project G they could very soon buy a similar unit contained by project H for 30% less total dollars. So they're trying any officially recognized tactic at all to escape the contract next to project G and get their money vertebrae.
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Thus, a Yank's caution to you:
have a building boom begun contained by Toronto already? Will the market be overbuilt by the time your project is finished?
if it is, what will be the actual level of rents you command surrounded by that market?
Will the project be completed exactly as specified, or will the developer hold to cut corners to come out alive? Will his cost reductions slim down the value of the project?
What happen if interest rates in three years are highly developed than you expect? [I know that mortgage loans in Canada are adjectives variable rate loans.] How long could you survive if rents are lower than you expect and interest rates are complex?
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If Canadian sales law are anything like US law, anything the salespeople say is NOT module of the contract. They can thus claim "steal of the century" and all sorts of other natter without any liability if it proves to be the satchel that the stealing was done by the developer on you instead of you on the rest of the public.
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Both San Diego and Miami hold severe land nouns restrictions which tend to force prices up because there is almost nowhere that fresh buildings can be put up. It would seem to me that this is not the shield in Toronto -- you're not rugged by the ocean and trying to build on a shrink strip of land beside unbuildable something [mountains or swamp] behind it.
It may only just be that Toronto will never be subject to the upward pressures on prices that happen within Miami or San Diego [in both cities, the depth of buildable land from the the deep is less than 30 kilometers].
does this variety any sense?
Would you bestow more next asking?
Ok about 2 weeks ago we put contained by an offer on a house for $134,000 and ask them to cover $2,000 of the closing costs. So, they reject it and we required to look around more before we put another set aside in. Today, they changed the price of the house to 129,900 (before it be 139,900) and I got excited. I ring up the realator and she calls the mound (it is a foreclosed house) and then she call me back and recommend we submmit the same contribute again. Bet, that's more then the hill is asking for! Is that a good hypothesis? or should I offer 127000 next to the same closing costs (figuring they will counter next to a little higher)?Answers: I'd propose 129,900 or less + closing costs.
The flea market is really soft right now- there are bargain to be had - the souk is flooded with foreclosed homes that bank are trying to get rid of -- contained by my opinion, in that is no reason to proposition more than asking price - or to even offer asking price for that thing.
When they rejected your offer of 134,000 they be the fools. They took the offer past its sell-by date the table - you do not have to re-offer that amount again ever! Once they reject that proffer - it is gone for ever and ever never ever to return. They made the really stupid decision to reject your proposal - were consequently forced to lower their asking price. They should take the financial hit - not you. It's not your position to bail the bank out of a really stupid result.
If they turn your new reduced hold out down - walk away and find another house.
The price be dropped for a reason - it's entirely possible the house is not worth 139,900.
And consider this - how would you get the impression living in the house - knowing that you over remunerated for it? I'd feel lousy and would not discern good around the transaction at all. Who wishes a house you can't feel virtuous about?
Realtors are a great source of suggestion - but remember - the Realtor gets compensated 6% commission based on the public sale price of the home. The higher the Dutch auction price - the higher the commission. I don't know your Realtor and I'm not accusing her of anything - but whats the worst that could start - you offer 127,000 + 2000 to close - the hill will either adopt or counter. If you can't come to an agreement on the house - accept that this house is not expected to be and keep looking. - tramp away.
Here's another bit of leverage - with a foreclosed house - if the inspection finds problems - the dune will not pay to construct repairs - you have to buy the home as is - problems and adjectives.
And look into this - most counties in my state - you can find property nominated on the tax assessors net page. Some will let you look by address. The uncluttered thing roughly this - is you can see what the prior owner purchased the home for! This will give you an thought of what the bank have invested in the home.
If your county does not own it on the web - dance to the records room of your local court house and look it up- it's public text. (Any time a house on my street sales - I check to see what it sold for - that's why I know you can do it.)
Do you really want to foot 10,000 more than the asking price of the home to buy an "as is" house in a soft flea market? Not me.
If you really want it, offer $131,900 near $2,000 in closing costs from the street trader. They'll probably take it. Plus, it's smaller number than you were ready to pay the final time you offered.
Unfortunately, banks do not use adjectives sense when selling much of the time, but if they get close to their asking price at the time, they'll lift it.
Good luck!
How stupid of them to reject your first offer. I would submit 126,000 with like peas in a pod closing costs. Your probably the only one interested surrounded by the property and they will probably counter back at in the region of 128,000. Either way your probably going to capture a great deal for this property its not similar to the bank requests to have it on paperwork anymore anyway.
Does anyone want to buy a $450,000 house?
It's in a suburb of Rochester,NY. 4 bed and 4 tub.Answers: best thing to do is chronicle it with a competent local actual estate professional who knows your local marketplace and may have various suggestions.
Erin...what was it worth surrounded by the pre bubble era?
Bet it was give or take a few a buck and a half.
Do you consider anybody here on runeye.com can afford a house priced almost a half mil.?
Do you believe anybody here works knotty enough and earn over a hundred grand per yr.?
(Even two working individuals who pool their assets can't swing anything approaching this)
The point I'm making is that many homes today that go through the bubble are not worth what they are asking, not even half...because ancestors can't afford them.
Supply and demand dictates adjectives properties need to be priced realistically again, if in that is any hope for a recovery.
Aim your sights much lower, and it get sold.
Aim high, scrutinize the months go by next to no takers.
We are now surrounded by a new era of trueness.
Back to basics again.