Insider Secrets: Buying in Toronto’s Fall 2024 Market

As a long-time real estate agent, I’ve watched our market weather countless storms. Today, I’m pulling back the curtain to share some lesser-known strategies for navigating Toronto’s real estate landscape this fall. 

Smart Money Moves: Beyond the Basics

Let’s start with the fundamentals – but with a twist. Here’s what you need to know:

• You’ll need to be pre-qualified AND approved for a mortgage. While online ‘how much can you afford’ calculators are helpful, you need to get pre-qualified by a lender, who will look at your credit, income and downpayment to determine how much you can afford. When you find the property you want to buy, you’ll need to get the lender’s full mortgage approval based on the actual property you want to buy.
• The mortgage pre-approval amount isn’t your budget ceiling – it’s your absolute maximum. In today’s market, staying 10-15% below your pre-approval gives you crucial negotiating flexibility and a buffer against future rate increases.
• Consider the “RSP First-Time Home Buyers’ Plan” hack: First-time buyers can withdraw up to $60,000 tax-free from their RSP ($120,000 for couples) for their down payment. After a two-year grace period, you’ll have to pay it back into your RSP over 15 years to avoid future taxation. The secret? If you haven’t been saving your downpayment in an RSP, you can still contribute it now and reap the tax savings – you just need to make sure it’s in your RSP for at least 90 days before withdrawing it when you close. If you’re in a 40% tax bracket, that will give you an extra $24,000 when you file your 2024 taxes – money you can put towards furnishings or renovations if you buy before tax season or extra downpayment funds if you close after you get your refund. You can read more about How to Use Your RSP to Buy Your First Home here. 

The “Days on Market” Strategy

The days on market (DOM) statistic provides important intel if you’re looking for a deal. Properties listed for longer-than-average are prime buying opportunities if you’re ready to negotiate. 

• While the data varies by neighbourhood and type of property, it took, on average, 43 days for a property to sell in September 2024. Properties that have been listed for longer often come with motivated sellers who are anxious to sell. 
• Insider tip: Don’t just look at the current listing’s DOM. Many sellers “refresh” listings to reset the DOM counter. Your REALTOR can access the total number of days a property has been listed. 

You can read more about How long it Takes a Property to Sell in Toronto here.

Sell Before You Buy: The 2024 Power Move

In today’s (unpredictable) market, selling before buying is often the smartest strategy. Here’s why:

• You’ll know exactly how much your buying budget will be and will protect yourself from any $ shortfall if your sale doesn’t yield the price you expect. 
• You’ll be in a better position to negotiate the price of your current home if you aren’t panicking about your upcoming closing date.  
• Insider tip: Talk to your lender about bridge financing, which you’ll need if the closing dates of the sale of your current home and the purchase of your new home don’t line up. It’s not as expensive as you might think – but it’s only available if you have an unconditional agreement to sell your current home. You can find out more about bridge financing here.

Hidden Opportunities in Toronto’s Condo Market

You’ve probably heard: the condo market is currently experiencing an inventory surge. That’s an opportunity that savvy buyers can leverage. 

• Buildings completed in the last few years are particularly ripe for deals. Many investors who bought pre-construction are looking to exit, creating opportunities for end-users to negotiate. Look for properties that advertise they’ve never been lived in.
• If you’re looking for a deal, focus on buildings with lots of units for sale. This oversupply often leads to motivated sellers and better terms.
• Tenanted units listed for sale are often a sign of a motivated investor who wants to cash in their equity. Just make sure your agent protects you from any trailing tenant issues (Related: Buying a Tenanted Property)
• Insider tip: Look for units that have been listed multiple times with different agents – these sellers are typically more flexible on price and conditions.

The Assignment Strategy

There are great discounts available if you choose to enter into an assignment for a pre-construction condo or house rather than buying from a builder directly. In an assignment, you’re essentially purchasing a contract that somebody else entered into and taking over their responsibilities. Many 2021 pre-con buyers didn’t budget for today’s higher interest rates and are facing closing challenges. 

• Look for assignments in buildings nearing completion to minimize risk. While you won’t have the opportunity to customize finishes, you could save tens of thousands of dollars. 
• You need to have a healthy downpayment, as you have to reimburse the original purchaser for the payments they made to the builder, usually 15-20% of the price of the property. 
• Insider tip: Assignments can be tricky, so make sure you’re working with a REALTOR who understands the intricacies of assignments. (Related: All About Assignments) 

Timing Your Purchase

The fall real estate market in Toronto has distinct advantages:

• September and October typically see an increase in inventory of properties for sale. Right now, Toronto buyers don’t have to make as many compromises as usual – there’s so much to choose from! This might be a chance to get a house with a finished basement or parking that you might not be able to afford when inventory levels drop and bidding wars make their inevitable return.
• Sellers who list in the fall are often more motivated to close before year-end.
• Insider tip: Look for properties that have been listed since summer – these sellers are typically more negotiable as the seasons change. Look for listings with summer photos!

The last months of Toronto’s 2024 real estate market offer unique opportunities for prepared buyers. Make sure to hire an experienced REALTOR to help you navigate the market with confidence and find the right property at the right price.