If you read the newspaper headlines and follow real estate news on your feed, you may have the impression that now is a terrible time to own a condo.  That perception is driven by the fact that many investors as well as would-be investors have decided to realize their profits (or cut their losses) and put their condo up for sale.

It’s hard to argue against the idea that is a bad time to sell a condo, as over supply – particularly of the one bedroom or studio apartment type – has put downward pressure on condo prices for most of the last couple of years.

While we’d agree it is a challenging time to sell condo apartments, that doesn’t necessarily mean that it is a bad time to own a condo unit.  Condo apartments make up 65% of the housing stock in Toronto, and given Toronto has a population of around 3.2 million people, there over two million people who own condos in the city.  With our population density and price of real estate, condo units have been (and remain) the lowest priced way to get onto the property ladder in Toronto.  Yes, condo prices have dropped in the past couple of years, but that is also true for the market as a whole.

In May, 2024, we saw the average price for a condo unit in Toronto hit its two year high, coming in at about $776,000.  Over the course of a bit more than a year, we saw it drop down to a two year low of $673,000.  As of the start of December 2025, our average price for a condo is now $698,000.  As of right now, we’re up $25,000 from our two year low, and down $77,000 from our two year high.

For the market as a whole, the highest average sale price in the past two years in Toronto was also in May 2024, when we hit an average sale price of approximately $1,199,000.  Compare that against January 2024, where Toronto saw our lowest average sale price of about $952,000.  That means that in the past couple of years we’ve seen prices for the market as a whole fluctuate by about $247,000.

Our current average price of $1,060,000 means that we’re up $108,000 from our two year low, and down $139,000 from our two year high.

The numbers show that owning a condo right now is better than it has been in the worst of our recent market shifts (to the tune of about $25K), so we’d say condo owners are doing OK.

If it is a bad time to sell a condo, an OK time to own a condo, what sort of timing is it for buying one?  With a couple of caveats, we think right now (December 2025) is a great time to buy a condo.  Here’s our reasoning.

Desperate times call for…taking what you can get.

While seasonal cycles may be less reliable in our real estate market in the past number of years, we still encounter a winter slow down every year.  In 2023, 2024 and 2025, October was the last hurrah in terms of number of sales for the remainder of the year.  We always see fewer sales, lower prices and less new listings as we head towards the end of the year.

Sellers who have been trying to get rid of a condo unit for weeks or months view the upcoming winter months with dread.  They know that showings will slow to a trickle and carrying costs will continue to mount.  If it is an investment property that has been vacant for more than six months this year, then they are also likely facing a 3% vacancy tax from the City of Toronto.

Put bluntly, the end of the year (and the first month of a new year) are excellent opportunities for buyers.  If you can close quickly, your agent can put lots of pressure on a seller to have them accept a much lower offer than they would have even considered a few months ago.

Renting isn’t looking so hot right now.

When getting a good sale price is hard to do, condo owners who aren’t in need of the capital in the property can choose to rent it out.  This has traditionally been the lifeline for those condo owners who aren’t able to get the price they want or need in order to move forward with a sale.

The challenge with that approach right now is two-fold.  First, winter is not just a slow time to sell properties – it is also a difficult time to rent a place.  Whether it is the holidays, the logistical challenges of physically moving in cold, snowy weather or the short days, winter is the hardest season to rent a property.

The second challenge has to do with the state of our condo rental market, which has dropped noticeably for condo landlords.  Asking rents in Toronto are down 2.9% year-over-year to an average of $2,592 and the City of Toronto’s secondary condo rents fell 3.8% year-over-year in Q3 2025 (to about $2,714 for a 675-sf unit).  As stories of the condo market troubles proliferated, a number of potential sellers of condo units decided to keep them and rent them out.  As a result, competition has intensified as supply has grown and tenants have more choice.

On the new purpose-built rental side of the equation, professional rental companies have begun offering incentives such as a free month rent or parking to attract tenants.  This has further impacted the resale rental condo market, which is typically older than the purpose-built rentals.

If we combine all of the above, it means that the rental option is not that desirable for a number of condo sellers.  This is in addition to the fact that some condo owners urgently need the capital in the property due to financial issues and cannot afford to keep the unit even if they can rent it out.

The future’s so bright, I’ve got to wear shades.

We have a bad habit in Toronto where we assume that whatever is happening to real estate will continue to happen forever.  If prices are going up, then they will always go up.  If properties aren’t appreciating, then they will be worth the same in five years as right now.  Given the price drops we’ve seen over the past couple of years, most of Toronto seems to be falling into the “whatever it’s worth now, it will be worth less later” trap.

The reality is that real estate markets fluctuate and that the trend for prices move right along with it.

Take a look at the below chart which shows the average price for a property in Toronto over the past two years.  This includes both freehold as well as condo units, but the same fluctuations occur in the condo segment.  Prices go up and down on a month to month basis and while the average always creeps higher over time, we have seen periods of two to four years of lack of growth before prices increase.

While prices may fluctuate, when the perception is that prices are going to go down, buyers hold off on making a purchase.  When that perception continues and economic issues can further uncertainty, we end up with a situation where the number of buyers is greatly exceeded by the number of sellers.  This has arguably been felt across the entire Toronto real estate market, but it has most strongly impacted the condo segment.

As a result of this perception, we started seeing a slow down in 2022 of the sales of new condo projects.  They began to decline in mid-2022 and by the following year, that slow down had worsened.   Urbanation reports that 2023 condo construction starts fell 45% in 2023 compared to 2022, and the second half of 2023 was down 72% year-over-year, meaning far fewer projects actually broke ground.  By 2024, the slowdown became severe and Urbanation reported that condo apartment construction starts dropped 50% to a 25-year low.   CMHC says 2024 condo-unit cancellations in Toronto were more than five times the number in a typical year (such as 2022) and Urbanation’s latest survey counts 32 condo projects cancelled since the start of 2024 plus 20 more that are on hold or in receivership.

Things have not improved in 2025, and the new-build condo market has posted multi-decade lows, with the lowest sales since 1995, with only 2,176 units sold year-to-date, which is a 28-year low.  Cancellations set a new record this year, with 18 projects (about 4,040 units) having been cancelled completely.

It takes three to four years for a condo project to go from ground-breaking to occupancy, which means that our 2023 slow down will result in 2026/2027 seeing very few new condo projects hitting the market.  Over the course of the next couple of years, we’re predicting that the current state of the condo market will reverse, with fewer condo units available for sale as the lack of new inventory means older resale inventory is basically the only option for condo buyers.

If we’re conservative, we would say that 2027 or 2028 is when resale condo prices will begin rising.  As buyer sentiment shifts based on the scarcity of available units, new construction projects will begin selling out again, which means by 2030 or later, new condo projects will be coming onto the market and prices will steady out.

In the very short-term (December 2025, January and February 2026), there are great opportunities to buy a resale condo from a seller who has experienced few showings and little interest.  Throughout the course of 2026, further opportunities will become available, driven by economic news and the strength (or weakness) of our economy.  In 2027, the lack of new condo projects coming on the market will start to shift buyer sentiment and bargains will disappear.

If you’re thinking about buying a condo and have a three to five year timeframe of holding it, then we’d love to help you get a great bargain – or two!  If that sounds good, please reach out to us so we can show you specific opportunities we’re seeing out there!

Today is Black Friday, and if you’re tired of looking at the sales being promoted all over social media, we thought we’d look at it from a real estate perspective.

In the past, we’ve talked about how while there may not be such a thing exactly as Black Friday for real estate, there are opportunities to buy homes at a discounted price.  We went through what to look for and gave an example of a property that was for sale that fit the description.

In another article we gave some examples of door crasher type deals that buyers managed to secure.

That was back in 2021, so we thought it was about time we take another look at the idea of Black Friday for real estate!

This time around, we looked to see if we could identify some properties currently for sale that theoretically could be advertised as Black Friday specials.  While I’m sure the listing agents and the sellers don’t think of the homes that way, if you’re offering something for sale at a considerable discount to what it used to be priced, we think it falls under the same category as a Black Friday deal.

Let’s check out the deals!

First, how we found ‘em.

We followed the same criteria we described in our article about how to find discounted homes and did a search for vacant homes with immediate possession who have changed their price since listing the home for sale.

We decided to look at detached homes in Toronto, as that is generally considered the holy grail of real estate in the city – and any bargain in that regard is worth hunting down!

As of today’s date, (November 28, 2025) that gave us 79 properties for sale.  We had to remove 23 of those properties, as the houses were actually now higher priced than originally listed, up by about 15%.  While that may sound bizarre, what it means is that these 23 houses listed at a price they considered lower than market value, held off offers for a marketing period of a week or so, and then failed to sell.  When that happened, they changed their approach and raised their price to the actual price they’d take.

When we look at the 56 homes that remain, we start to see the bargains show up!

7% off doesn’t sound like much.  How about a $142,000 discount?

The average price drop for these 56 homes is 7.2% and the new discounted prices range from just 1.7% below their former price to 17.4% off!  In real dollar terms, sellers have slashed between $19,000 to $701,000 off their original list price, with an average discount of $142K.

Let’s look at the bottom of the barrel as well as the top of the list to see what’s happening in the extremes.

Worst of the Bargains

The worst of these Black Friday type bargains is a detached bungalow located in the Woburn area of east Toronto.  Originally priced at $948,888, the price was dropped down to $929,888 on November 11^th, after 31 days on the market.  It’s been another 17 days since then and the home remains available.

With a listed possession date of October 31^st and currently vacant, it seems likely that the modest price 2% discount off of the original price isn’t the end of the line for this property.  We say “original price” but that’s just for the latest listing.  The history for it shows no less than six previous unsuccessful attempts to sell it, going back to September 2023, so it is pretty clear the owner thinks it is worth more than the market.

Click on the photo to see the listing.

Heck of a Deal!

The most appealing Black Friday bargain for a detached home isn’t really for a detached home, despite how it being listed as one.  It is effectively vacant land, with just a foundation and building permits in place on a large lot in the St. Andrews – Windfields neighbourhood of Toronto.  That’s a very desirable and affluent neighbourhood in North York and the property has a fascinating and somewhat tragic history.

The original home on the lot was torn down and back in October 2023, a French chateaux style home was built on the lot, with six bedrooms, ten washrooms and a six car garage.  Listed for $13.8M in October 2023, it was the start of a new period in the life of the property, or at least it was supposed to be.  On Thursday, December 14^th, the home burned down in what was determined to be arson.  Here’s the Global News story on it.

Almost exactly a year after the newly built was put on the market for $13.8M, the property was relisted at $5.188M.  With the building razed down to the above grade level, with just the foundation (including the six car built-in garage) remaining, it was marketed as a “Builder’s Dream in York Mills” with a building permit and foundation already in place.

After two months on the market, the listing was terminated and the owner, now a numbered company, held the property for close to a year.  In September 2025 it was relisted at $4.7M, and two years after the built mansion was listed for $13.8M, the price for the remaining “as is” property was dropped down to $4M.  The listing is now being shown as power of sale on behalf of the numbered company that owns it, so clearly there is trouble behind the scenes.  As of today, it’s been on the market for 74 days with no takers, despite the drop of over $700K in asking price.

Click on the photo to see the listing.

And the best actual bargain goes to…

In terms of an actual detached house that has dropped the most from their original list price, that dubious honour belongs to a detached two storey home with 5 bedrooms and 4 washrooms, located in the Agincourt neighbourhood of north east Toronto.

Originally listed at $1.68M, it has dropped in price to $1.388M, a whopping 17.4% decrease.  That’s down $292,000 and given it is vacant, with an asking possession date of September 19, 2025, the current price is likely more than what it will actually receive.

Click on the photo to see the listing.

The history for this home is one of those cautionary tales that the media loves to focus on, as the current owners paid $1.55M for it when they bought back in September, 2023.  A bit over two years later, they’re now willing to sell for $162,000 less than they paid – and that’s before the double land transfer tax they paid when they bought and realtor commissions to sell.

Apparently it’s a good time to buy a custom home.

A number of the top bargains – either on a percentage discount off their list price or in actual dollars dropped – are new custom homes.

We’ve seen this in our work with buyer clients in the new custom home space, where builders who bought a few years ago at the height of the market now struggling to sell the completed home at a price that allows them to make a profit.  The five highest priced months in Toronto for detached homes was the first five months of 2022, from January to May.  If a builder bought a tear down home in February 2022, they would have bought at the highest average price for detached homes in the last 15 years.  The average price for a detached home in Toronto is down almost half a million since February 2022, which means that for many builders, the market drop has erased their hoped for profit.

Above are links to five examples of new (or newish) builds currently for sale that are hundreds of thousands of dollars less now than originally listed.  They range from $1.75M up to $6.7M, so while they aren’t cheap, they are certainly cheaper!

If you’ve enjoyed this look at some bargain properties out there and you love the idea of having us look for ones that fit your specific requirements, it’s what we do.  Get in touch with us to chat about what you’re looking for and we’ll do the rest!

There is lots of talk about the lack of affordable housing in Toronto and other cities in the GTA and we decided to do a dive into what constitutes “affordable” and whether such homes exist these days.  The somewhat surprising answer is that yes, there are some homes in Toronto that are affordable.  Well, there are about 2,000 condo apartments that fit the bill, and, let’s see, two houses that qualify.

Let’s examine what constitutes “affordable” and then look at what options exist in the city.

Some Quick Math

If we look at the average income in the city of Toronto (about $132,000) and we take the recommended maximum people should spend on housing (32% of gross income), we’re left with about $3,530 to spend on a monthly basis on your mortgage and property taxes.  If that doesn’t sound like it would give you much of a budget, you’re absolutely right.

At current rates, you could get a $500,000 mortgage for about $3,080 a month in principal and interest payments.  That’s based on a five year fixed rate of 5.6%, amortized over 25 years.  Add in property taxes of about $5,000 per year and you’re looking at monthly housing costs of about $3,500.  If we say you’ve got the 20% downpayment of $100K, that gives you a budget of $600,000.

While that’s not the highest budget, it does give you some options for homes that qualify as affordable using the above rationale.  Let’s review.

Affordable condos for everyone!

As of June 14, 2024, there are over 2,600 available condo units for sale in Toronto that are listed at below $600,000.  The median price is about $548,000 so there is definitely a huge amount of affordable housing options on the condo side of the equation.

With prices starting as low as $275,000, our condo market is truly the saving grace in the city for people who want to own real estate but have limited budgets.  If you are interested in a condo, you’ve got a huge amount of options across the city.  What about if you’re dreaming of a freehold home in Toronto?

Eight options isn’t bad, right?  Wait, are they options?

When we search for freehold houses for sale in Toronto as of June 14, 2024, we have 3,160 properties on the market.  The median price for those homes is about $1.649M, which puts them about one million dollars more than what we’re saying is “affordable” for the average Torontonian.

If we set a maximum price of $650,000, that number drops from over 3,000 options to just eight properties.  Four of them are properties listed at $1, which is a marketing tactic designed to draw attention to the listing.  None of the four properties are actually available for purchase for anywhere near $600K, so we’ll remove them from the equation.

One of the four remaining properties is a property that was previously listed for $898,000 and is now listed at $599K with an offer date.  If they wanted almost $900K before, they likely wouldn’t take anything even close to their current list price, so we’re going to remove it as well.

That leaves us with three properties.  Well, actually, two properties and one houseboat.  Yes, that’s right, one of the three affordable freehold homes in Toronto is in fact a boat.  For just $649,000 you can own a one bedroom, one washroom houseboat in the Scarborough Bluffs.

Let’s look at the two options for affordable freehold homes you could purchase in Toronto as of today.

Dundas & Annette Semi-Detached for $600,000

The most affordable listing for a freehold home in Toronto, this semi-detached house sits on a reasonable 19 ft wide by 88 ft deep lot in the Junction neighbourhood.  It’s got three bedrooms, plus one in the basement, and a full bathroom on the 2^nd floor and a powder room on the main floor.  There’s no parking but it’s located on a small side street off of Dundas, so street parking is an option.

If you’re wondering why it’s so cheap, it does come with a few caveats.  There’s no AC in the home, nor is there central heating, as the heating is provided by baseboard and electric heaters.

In addition, it is tenanted and there are no pictures of the interior, so it seems likely that the home isn’t in great shape.  That is reinforced by the fact that in the listing it says “The seller provides no warranties regarding the structure, electrical, plumbing, foundation, roof, furnace, condition, sizes, air quality, or AC/heating units.”

In short, it’s an affordable home, but it is likely in need of some significant renovation.  Installing AC and central heating will cost a fair bit and if there are structural issues, problems with the roof or the windows, then costs will rise quickly.

It’s been on the market for 23 days as of today, so there might also be a bit of flexibility on that list price.

Davenport & Caledonia Townhouse for $635,900

Our second affordable option for a freehold home is located just a few blocks north east of our first home, up in the Pelham Park neighbourhood.  It’s a townhouse that sits on a 15 ft wide by 120 ft deep lot and while there is no parking, the deep lot could allow for a garage or even laneway house off the public laneway behind the property.

It is listed as having three bedrooms, plus two more in the basement, with just one full washroom on the 2^nd floor.  It has an unfinished basement and the heat is provided by forced air but with an oil tank, and there’s no air conditioning.  Originally listed at $729,000, it’s been on the market for 35 days as of today and is now listed at $635,900.

This is an estate sale and once again the home is being sold in “as is, where is” which means buyer beware.  The home is brick, which is a good sign, but the photos definitely show some signs that the house has settled significantly in its 100 plus years of existence.

Both the front porch and the rear porch look pretty worn and the interior is very dated and basic.  There is evidence of knob and tube wiring in one of the photos and it seems likely the walls are all lathe and plaster.

In short, it would require a to the studs renovation, with all new electrical and plumbing as well as AC and heating.

Add in drywall throughout, windows and flooring and even before you get to putting in fixtures you’re looking at significant costs.

If you’re looking for affordable housing in Toronto, it seems like condos are the only option as of mid-June, 2024.  While there are technically two freehold homes that qualify as affordable, both require significant renovation that would likely push the cost up by at least $100,000.

If you like the idea of finding a home that needs significant work and making it your own, we’d love to help you find the best option.  Get in touch with us to start the ball rolling!

In the past, we’ve talked about how while there may not be such a thing exactly as Black Friday for real estate, there are opportunities to buy homes at a discounted price.

When we wrote that article back in November 2020, one opportunity we identified was when a home is sold conditional and then that deal falls through.  Such situations often result in sellers being motivated to find a new buyer and finally be done with the deal.

In that article, we talked about a specific home that was for sale and we thought we’d update you on what happened!  Here’s what we said back then:

As of right now, there is one property that fits these criteria.  It is vacant, want to close immediately and their previous conditional sale fell through.

 It’s a detached two-storey home in east Toronto, near Kingston Road and Meadowvale Road.  4 bedrooms upstairs, a den in the basement, two and a half washrooms and is less than five years old.

 It was listed September 29, 2020 for $849,900, holding back offers in the hopes of receiving multiple offers.  That didn’t happen and on October 28, 2020 they upped the price to $949,900, accepting offers anytime.  On November 16, 2020 it was sold conditional.  Two days ago it came back on the market at $949,900.

 Something went wrong with one (or more) of the conditions and as of today, it’s for sale again and has now been on the market for just under two months – 59 days.

 Do you think an offer well below the current $949K would be considered on Tuesday, December 1st as the seller looks to another month on the market starting, with the holidays only weeks away?  We would almost certainly classify the seller as motivated and willing to give on the sale price if they can get a firm deal done that closes soon.

We went back to check and see if we were right and whether there was in fact an opportunity for a buyer to scoop up the home at a discount.  The answer is yes – we were right, and someone did seize the opportunity.

The home sold a week after their return to the market at $949,000 to a lucky buyer for $925,000.  After 64 days on the market, multiple price changes and a failed conditional sale, the seller settled for 97% of their asking price.

That’s a good deal, but arguably not a great deal.  In Black Friday terms, it’s a deal, but not a Door Crasher.

If we take the idea of a Door Crasher and apply it to real estate, it would mean a property that sells for a significant discount below the list price.  In order to make sure it’s actually a great deal, it would also have to be a property where the sale price is considerably lower than what people typically pay for a similar home.

We’ve searched the GTA for the best deals that buyers have managed to obtain and here they are, your Black Friday Real Estate Door Crashers!

Door Crasher # 1 – Richmond Hill Townhouse

On November 18, 2021 our first Door Crasher sold in the Langstaff area of Richmond Hill.

Listed at $1,088,000, it sold for $880,000 after six days on the market.  That’s only 81% of list price!

It’s a freehold townhouse with three bedrooms and two and half washrooms and a built-in garage.

A very similar home just a few doors down sold almost two years ago (December 2019) for $907,500.  The average price for a townhouse has gone up 42% in Richmond Hill since then, so the fact that our Door Crasher townhouse sold for less than a comparable from back then makes this an absolute steal.

We can’t know the specifics around why the seller chose to accept such a low price, but it is clear from reviewing the sale and comparables that this home sold for a considerable discount.  With a sale price of almost 20% below their list price and likely a similar actual discount versus the average on the street, this was absolutely a Door Crasher for a lucky buyer!

Door Crasher #2 – Toronto Semi-Detached

On November 13, 2021, our second Door Crasher sold in the Trinity-Bellwoods area of Toronto.

Listed at $1,600,000, it sold for $1,300,000 after 30 days on the market.  Again, that’s just 81% of list price!

It’s a freehold semi-detached that is actually zoned as a legal duplex.  It has 5 bedrooms, two full washrooms and two half washrooms and two kitchens.  There is a detached two car garage that qualifies for conversion to laneway housing.

A very similar home a few doors down sold in April, 2021 for $1,650,000. It was also a semi-detached on a very similar lot but was not zoned as duplex.  It appears to be a similar size but has fewer bedrooms and washrooms.  It again has a detached garage that qualifies for laneway housing.

From an income perspective, the duplex would actually be worth more than a single-family home, but it clearly didn’t achieve that as it sold for $350,000 less than a nearby neighbour.

Again, it is impossible for us to know all the specifics around why the seller chose to accept such a discount on their list price.  It was an estate sale so that may have impacted their willingness to do helpful work on the home or wait for a better offer.  Given the sale price of $300K below their list price, which was already lower than a comparable sale price from earlier in the year, this was definitely a Door Crasher sale for the purchaser.

Door Crasher # 3 – Toronto Detached

On November 14, 2021, our third Door Crasher sold in the Lawrence Park North area of Toronto.

Listed at $1,499,000, it sold for $1,200,000 after 47 days on the market.  That’s 80% of the list price!

It’s a freehold detached home with three bedrooms, one and half washrooms, a private driveway with three parking spaces and a finished basement with a separate entrance.

A semi-detached home across the street with a narrower and shallower lot sold for $1,620,000 in March, 2021.  It has the same number of bedrooms and washrooms but only had one car parking.

We don’t know the reasoning behind why the seller of the detached sold for $420,000 less than the seller of a semi-detached across the street earlier in the year.  We do know that the seller of this Door Crasher originally wanted $1.799M, which means their eventual $1.2M sale price is almost $600K less than what they hoped for initially.  That definitely qualifies as a Door Crasher for the buyer of this home!

It can feel like there are no bargains to be had in the GTA given how frenzied most real estate markets are right now.  The above three examples show that not only do bargains exist, there are even Door Crashers available!  If you’re looking to buy a property and want to make sure you get the best deal, get in touch.  We’d love to see if we can’t locate a Door Crasher for you!

If there is anything that 2020 has been good for (and there has to be something, right?), it’s how it forced us to stop our daily routines. We have heard from many people that the changes from this year made them re-evaluate how they were spending their time, how they work and even how they live their lives.

We often get so focused on our specific circumstances and the nitty-gritty details of our lives that we don’t look at things from a bigger picture.  It took a global pandemic for us to take a step back from the tree to see the forest, but it happened.

As a result, many homeowners (or prospective homeowners) have reconsidered whether real estate in urban centres are worth the huge price premium over more rural properties.

We wrote about where the bargains are if you want to move out of the city in this article back in October so we won’t revisit it just yet.

Instead, let’s take a look at how the rise of unbelievably cheap money – in the form of historically low mortgage rates – has impacted affordability, repayment and in turn, real estate prices.

Mortgage rates haven’t always been this low and many of us can remember a time when mortgage rates were double, triple, even quadruple the rates they are right now.  We all know that higher rates impacts how much we can afford and how much of our monthly payment goes to building equity in the home, but we think you’ll be stunned at the differences.

Let’s take a quick look at historic rates over the past 50 years and then we’ll do some simple math on how ever percent increase in rates affects the principal you’re able to pay down and how it lowers your qualifying budget.

Here’s Your History Lesson

When we look at historic mortgage rates, we’re handicapped by the fact that posted rates are not the actual, discounted rates that lenders actually charge borrowers.   The Canadian Association of Accredited Mortgage Professionals estimates that the average discount applied to a 5 year mortgage rate was 1.42%.  While that estimate won’t be accurate for all of the past fifty years, it at least gives us the ability to look at what actual, discounted rates would have been at our key dates.

Here’s what the posted rate looked like at 10-year milestones in the past 50 years.

From the low rates of the start of the 70s to the peak of our interest rates in the 80s, mortgage rates have fluctuated widely in the past fifty years.

As the Globe and Mail reports:

Five-year fixed-rate mortgages were more than 15 per cent for about two years, from the fall of 1980 to the fall of 1982, peaking at just over 21 per cent in the second half of 1981. The Bank of Canada was cranking up its rates at the time, to try to stem the runaway inflation that was playing havoc with the Canadian economy.  Home buyers had to endure relatively high rates for much longer than just that stretch. Five-year fixed mortgage rates never fell below ten per cent for a full 18 years – from 1973 to 1991.

Let’s look at how these mortgage rates impacted payments.

2020 Mortgage Rate of 5.19%

• $592 monthly for every $100,000
• 25 years amortization period, paid monthly
• Total payments over term of $35,548
• Interest paid of $24,312
• Principal paid of $11,325
• Balance at end of term of $88,764

2010 Mortgage Rate of 5.49%

• $609 monthly for every $100,000
• 25 years amortization period, paid monthly
• Total payments over term of $36,588
• Interest paid of $25,756
• Principal paid of $10,831
• Balance at end of term of $89,168

2000 Mortgage Rate of 8.25%

• $779 monthly for every $100,000
• 25 years amortization period, paid monthly
• Total payments over term of $46,753
• Interest paid of $39,132
• Principal paid of $7,621
• Balance at end of term of $92,378

1990 Mortgage Rate of 12.00%

• $1,032 monthly for every $100,000
• 25 years amortization period, paid monthly
• Total payments over term of $61,914
• Interest paid of $57,374
• Principal paid of $4,540
• Balance at end of term of $95,460

1980 Mortgage Rate of 13.25%

• $1,120 monthly for every $100,000
• 25 years amortization period, paid monthly
• Total payments over term of $67,211
• Interest paid of $63,388
• Principal paid of $3,823
• Balance at end of term of $96,176

1970 Mortgage Rate of 4.79%

• $569 monthly for every $100,000
• 25 years amortization period, paid monthly
• Total payments over term of $34,182
• Interest paid of $22,390
• Principal paid of $11,792
• Balance at end of term of $88,207

From a low of $569 per month (for $100K mortgage) to a high of $1,120, we see the cost almost doubling, while principal repayment goes from a high of almost 1/3 of the payments made to less than 5%.  Make no mistake, even small changes in mortgage rates have a big impact on the cost and principal repayment amount.

Impact of Change

The below chart shows the dramatic impact a one percent increase has on your mortgage.  As above, the numbers below are per each $100,000 mortgage, at a five-year fixed rate with a 25-year amortization period.

The above chart shows the dramatic impact that the interest rate has on how much you pay – and how much of that payment goes towards principal.

At a widely available (as of December 11, 2020) mortgage rate of 1.74%, you pay only $411.00 per $100K of mortgage and 68% of your monthly payment is in fact principal repayment.

While each percent increase in rate pushes your monthly payment up, it is what it does to your principal repayment that most people don’t understand.  By the time the mortgage rate is up 2%, the monthly cost for the $100K mortgage is only up about $100.00 dollars, but your principal repayment has dropped from 68% of your monthly payment to 43%.

When we look at the history of mortgage rates in Canada and the impact that rate changes have on the cost and repayment of the mortgage amount, it’s clear that the current unbelievably low interest rates has impacted buyer thinking.  When it costs so little to borrow money, the opportunity cost of not being in the real estate market is huge – and that pushes more people into the market, which pushes prices up.

If you want to discuss how to get into the market or move up the market, don’t hesitate to get in touch.

Much like in any industry, there are people in the real estate industry who choose to compete for clients based on price.

Whether it is a car, a pizza, landscaping, house painting or any multitude of products or services, when the provider chooses to compete on price it means they believe that all of the offerings are fundamentally the same.

If you’ve ever had a bad pizza or seen a poor painting job at a house, you know that the quality of a product or service can vary tremendously.

Within real estate, lower price options are based on the idea that real estate commissions are an expense, not an investment.  It makes tremendous sense to keep your expenses as low as possible, and it makes equal sense to invest your money wisely.

If you believe, as we do, that the commissions earned by your real estate agent are an investment in getting you the best possible result, then you’ll find this article very interesting.  Without further introduction, here are the three big ways your real estate agent makes you money.

Being Honest With You

Honesty is really the best policy when it comes to the relationship with your agent.

While we might all prefer visitors to our home to be polite and positive, your agent needs to be able to view your home through the lens of a potential buyer and identify issues.  By doing so, your agent can save you tons of money by avoiding these mistakes:

• Over-pricing the home based on wishful thinking rather than market data and comparable properties. Homes that are priced too high sit on the market for too long, require multiple price drops and eventually sell for lower than they could have sold for if priced properly from the start.
• Under-estimating the impact of any issues on the appeal and saleability of the home. Our clients often do pre-list home inspections to reveal any issues with the home so that we can choose how to present these issues to prevent them being used as a negotiating lever or causing a deal to fall apart.
• Leaving fixable issues to create a poor impression on buyers. While not all issues with a home can or should be remedied, there are often smaller issues that an honest agent can help you address.  The cost of such work is often a fraction of the benefit.

No home is perfect but your real estate agent needs to be on your side with how to best present the home, at the highest reasonable list price.  When you see properties that don’t sell because they show poorly and at too high a price, you can be sure that the listing agent wasn’t being honest with his clients.

Applying Pressure To The Other Side

The next way in which your agent makes you money is by applying reasonable pressure to the other side.  Whether you are buying or selling, there is someone on the other side, often represented by another real estate agent, and your agent must know when and how to apply pressure to make you money.

On the buy side, this means understanding that being professional and friendly is not the same as being accommodating and a pushover.  Your purchasing agent should take every opportunity to probe for ways in which they can save you money.  Here are a few examples:

• The listing agent wants a 24-hour irrevocable period to contact all agents who showed the property and drum up competing offers. Your agent can push for a much shorter window of time when the seller and the agent can review an offer and not allow them to put you into competition and pay more for the home.
• The seller wants a different closing date than originally described and there are likely financial reasons for that change. Your agent can push for a price adjustment based on financial benefit to the seller or financial cost to you as the buyer.
• The seller wants you to remove a home inspection condition as they are nervous about the uncertainty of a conditional sale. If your main concern was the condition of the roof and we can agree to remove the inspection condition in exchange for a $10K rebate on closing, you have funds set aside for a possible (but not necessarily necessary) roof repair.

On the sell side, your agent must know how to market and negotiate the home to get the best result from a pool of buyers.  Here are a few examples:

• When a home is fresh on the market and a buyer is interested, your agent must be prepared to push back against eager buyers and their agents, to say that if they want the seller to forego a marketing period and exposure to more buyers, they need to come to the table with a great offer.
• When the home has received multiple offers, your agent must know how to put pressure on the purchasing agents to increase the appeal of the offers on the table. This often means strategic choices about which offers to reject and which offers to encourage, when to sign back and when to hold off on a deal.

All real estate transactions require willing parties on both sides and aggressive, confrontational negotiations are often not successful.  Despite this, it is a negotiation and your agent has the chance to make or lose you tens of thousands of dollars by how they interact with the other side.  Make sure you chose an agent who has the experience and wisdom on how to be professional but not a pushover.

Being Sceptical

The final way in which your agent can make you money is by maintaining a healthy level of scepticism.

This is often earned by a real estate agent over the course of helping hundreds of clients buy and sell real estate.  Over time, you encounter more and more situations where unexpected things cost your client money.  With experience, or by adopting a certain amount of scepticism, your agent can save you money.  Here’s a few examples:

• The listing agent tells you that the parking pad in the front pad is legal. Trust that is true, but also verify it with the city.  Paying a higher price for a home with parking only to discover it is in fact not a legal parking spot means when you sell, you’ve lost a key selling attribute.  Discovering this before purchase or closing allows your agent to negotiate a change to the sale price.
• The brand-new dishwasher in the house with the blue tape and manual still inside doesn’t need to be run during the home inspection as it is brand new, right? Unless, of course, it hasn’t had the plumbing or electrical connections installed and is simply a dishwasher pushed into a gap in the cabinets.  Discovering this prior to signing off on the home inspection condition allows your agent to negotiate an abatement to cover having the necessary installation done.
• The buyer for your home is only able to pull together a small deposit despite the hefty purchase price they are willing to pay. Their agent assures you they are pre-approved and financing won’t be an issue but when your agent asks for the pre-approval prove, it turns out that they aren’t quite pre-approved and in fact can’t close on the deal.

Whether it is recognizing an existing problem or preventing something from becoming an issue, your agent can make you lots of money by not taking everything that is presented at face value.  A big part of the value of your agent is the experience they have with real estate transactions and knowing how to identify red flags.

When you hire a Realtor to be your agent on the purchase or sale of real estate, look for one that will be honest with you, who knows how to apply pressure to the other side and who doesn’t assume everyone is being 100% honest with how they present situations.

If you’d like to work with an agent who knows how to make (and save) you lots of money with your deal, don’t hesitate to get in touch.

The hallmark of Black Friday is a huge advertising blitz to increase the number of sales of discounted (well, in theory they’re discounted) products.  In real estate, there is no direct equivalent.   If, however, you’re looking for opportunities to buy at a discounted price, then there are ways to identify sellers who might be willing to give you a bargain.

Here are three factors that should greatly impact a seller’s motivation – and allow you to get a bargain as a result.

Days on Market

The length of time a house has been on the market is one of the biggest factors in how flexible a seller will be with the price.  If a house just came on the market and you want to buy it, be prepared to pay quite close to the asking price.

An offer shortly after a property is listed gives the seller the impression this is going to be a hot property.  Time and again, I’ve seen sellers react to an early offer by saying something like this.  “If someone wants it after a day or two, I bet we will see dozens of offers and sell for loads of money.  Let’s wait and see who else wants to buy it.”

Any offer that comes in early must be reasonably close to the asking price, but not too close to it.  Yes, you heard that right.  In my experience, buyers have a better chance of successfully purchasing a property that was just listed if they still negotiate a bit.  After all, how do you feel when you ask for a certain price for something you’re selling and they say “Sure.”?  In all likelihood, you immediately suspect you should have been asking for more.

For properties that are sitting on the market, certain dates are milestones that will likely impact their willingness to accept a lower price.  Look for properties that have crossed over into an additional month on the market, or even properties that came on early in the month and haven’t sold as we move to a new calendar month.  For a seller who listed in early November, and expected to sell in November, seeing that calendar flip to December can be a great motivator to accept a lower price.

Note that within the Toronto Real Estate Board, we can terminate a listing and immediately relist it with a new MLS number, resetting the days on market to zero.  Agents can see it was previously listed and add that length of listing onto the current listing days on market, but it is not immediately visible when reviewing listings.  As such, we always need to dig deeper to see if the days on market is accurate.

Price Change

Nothing more clearly shows a seller’s willingness to accept a lower price than asking for a lower price.

There are 1,994 freehold properties (so, not condos) for sale in Toronto today.  340 of them have changed their price from the original list price.

From a psychological standpoint, sellers who have done a price drop are already accustomed to knowing they won’t get what they had hoped they would for the property.  Their confidence in their agent and the value of their home has likely lowered as well.  Someone who says “We were wrong about how much we thought it was worth.” is more likely to say it again than someone who is stubbornly insisting on maintaining their list price.

Our favourite time to submit an offer on a property with a price change is about a week after the price change.  When the price is lowered, the seller and their agent are hopeful this will make the difference.  Suddenly, more showings will be booked, agents will be calling and offers will be submitted.  If a week passes and the house still isn’t sold, we know that the seller is shaking their head and starting to see that this new lowered price might still not be enough.

By timing an offer properly, you can find a seller with the motivation to accept a lower price.  The risk with this approach is that someone else will come in before you and buy the property at close to the lower price.  For buyers who are still wanting a greater discount than the price drop that just took place, it’s a risk that they have to take.

Failed Sale

The final factor that absolutely impacts a seller’s motivation is when they had a sale fall through.  When you go through the emotional roller coaster of selling your property, the idea of having to start all over again is very unappealing.

Within the Refined team, we always advise our listing clients to be cautiously optimistic when a property is sold conditional and to even hold back a little bit on their happy dance when it is sold firm.  Until they have the money for the sale in their bank account, deals can fall through.  The legal obligation to close does not mean all deals close.  Buyers lose jobs, they get divorces, sometimes they even die.

A good listing agent works hard to make sure that the buyers are solid and dependable so their client doesn’t have any surprises on closing day.

On the buying side, most agents don’t realize that we can search the MLS for deals that have fallen through.  It’s a special field that doesn’t show up on the listings we see, but we can modify our search to see deals that have fallen through.

Let that sink in for a moment.  We can see properties that were sold, where the sellers thought they were done.  They may have bought another property now that their home was sold.  They may have decided on their family vacation when it closed and they had the money.  They were done.

As of today, there are 31 freehold properties for sale in Toronto that were sold in November, and have fallen through.  There are three townhouses, 4 semi-detached houses and 20 detached homes for sale right now, where it was sold and then it fell through.

We can even refine the search further and look for properties that are vacant and are asking for immediate possession.  This means that the owners have moved out, possibly into their next home.  Rather than having a sold property, they have two properties, with two sets of utility bills, two premiums for insurance and two mortgages.  If you ask us, those people are pretty motivated to sell and would be willing to look at almost any offer as long as it closed quickly.

As of right now, there is one property that fits these criteria.  It is vacant, want to close immediately and their previous conditional sale fell through.

It’s a detached two-storey home in east Toronto, near Kingston Road and Meadowvale Road.  4 bedrooms upstairs, a den in the basement, two and a half washrooms and is less than five years old.

It was listed September 29, 2020 for $849,900, holding back offers in the hopes of receiving multiple offers.  That didn’t happen and on October 28, 2020 they upped the price to $949,900, accepting offers anytime.  On November 16, 2020 it was sold conditional.  Two days ago it came back on the market at $949,900.

Something went wrong with one (or more) of the conditions and as of today, it’s for sale again and has now been on the market for just under two months – 59 days.

Do you think an offer well below the current $949K would be considered on Tuesday, December 1st as the seller looks to another month on the market starting, with the holidays only weeks away?  We would almost certainly classify the seller as motivated and willing to give on the sale price if they can get a firm deal done that closes soon.

If you love the idea of getting a bargain, then let’s talk.  It may not be Black Friday for real estate, but we know how to get you a deal on a property.