Credit plays a crucial role in real estate investment, greatly influencing the borrowing options that investors have at their disposal.
The acme of real estate activity is spring, but getting in early could tender gems for investors.
“There’s far less competition from other buyers at this time of year with the financial hangover from the holiday season,” said Vicki Schmidt, broker of record and co-founder of JUSTO, a Toronto-based realty brokerage. “Buyers are typically strapped for cash and they can’t make big purchases, so buyers who are prepared financially have an opportunity to get a good price.”
It’s also an opportune time for investors to find bargains, especially on fixer-uppers. Any seasoned real estate agent will advise their client to list during spring, but sellers who put their properties on the market during the frigid winter months are doing so out of necessity.
“When we talk about the idea of people needing to sell, it’s for a reason,” said Schmidt. “It could be an Estate sale or a property for which timing isn’t so important. That property could need fixing up, and this time of year is usually when properties that need more work find their way onto the markets, so investors looking to get in early and close at a good price, but do renovations and update the property through the spring and summer months.”
December was one of the slowest months in recent memory in the Greater Toronto Area, and the aftershocks are certainly being felt this month.
“Last year’s mortgage rules and rising interest rates caused a pause in the market and caused sales to drop,” said Schmidt. “The number of listings dropped substantially throughout the GTA and properties coming on the market in January are doing so out of a sense of urgency. That gives buyers more leverage to get a better deal.”
Mortgage brokers can also attest to the relative ease with which buyers can find homes during January. Daniel Johanis, a mortgage broker with Rock Capital Investments, says that a buyer with orderly finances should have a much easier time during frigid winter months than they will once the snow melts.
“There’s something to be said about people moving in minus-30 weather,” he said. “If you have your finances in order, it’s a good time, especially historically, because there’ less demand.”
Shawn Stillman, Mortgage Outlet’s principal broker, confirms that some people are so desperate to sell that they will for the right offer, even if it’s below what they were initially seeking
“I have clients who have stuff on the market and if they get a decent offer they’ll sell because they don’t have a choice,” he said. “The downturn in the housing market opened a lot of doors to people.”
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