Tips on buying a house II

1) Waive as many conditions as possible

This is not good advice for people who want some sort of escape clause—especially considering the size of the purchase. But all the real estate agents are recommending it. even my own brother-in-law is pushing us in this direction. He says it's the only way to guarantee our offer will be considered when entering bidding war.

But we want to be sure the house is sound before putting in a bid. Or at least, an inspection detailing the cost of needed upgrades will help inform us on a price we're willing to pay. (The last thing we want to is to buy a house at our maximum and then need to pour another $30,000 into it. We'd be house poor.) The dilemma is as follows: does one shell out $400 for an inspection every time we put a bid on a house when, depending on the circumstance, there's a good possibility we won't get it? Five bids $2,000. Doesn't sound like much when you're buying a house for $350,000. But closing a house means all sorts of costs to pay: lawyer fees, municipal fees, etc. That $2,000 suddenly comes in very handy.

One solution: for $150 or so, we get an inspector to do a walkthrough. He gives us the 411 on the highlights—electrical, plumbing, foundation, furnace, hot water tank, A/C unit, maybe roof, etc. Those are the main costs you'll be facing when buying a home. Still, it hurts to part with the cash when we don't end up buying the house.

Too many people, though, buy on blind faith. They hear an inspection has been done—without knowing the results—and then put in a bid hoping the house in good shape. We've always based our bids on the cost of repairs/upgrades to the house. But people lose their heads in this market. We saw a house on Hunter St. (off Jones Ave.), which is a short street east of Riverdale with mixed income families that's gentrifying slowly. Okay property listing at $279,000. We figured it would need approximately $30,000 in upgrades. A fine house if you can get it for $299,000 and put in the renovations. Market value: $330,000 or so. The house sold for $330,000. That's crazy. If you put a house for sale today on that street for $360,000 it wouldn't sell. No way.


2) Stick to your price

Agents are a home buyer's worst enemy. And I'm talking about the ones working for you. They earnw strictly on commission and want to close as many deals as possible, even if it means pushing you above your comfort zone.

One evening while I was visiting my brother-in-law's office, a colleague of his was telling us how one of her clients had put in offers on 10 different houses since last fall and lost them all to other buyers. Her client was interested in a house that was taking offers that night. The asking price was within the woman's price range, but the agent was pushing her to bid higher telling her that she was never going to get the house. That's how people start sinking in debt.

As much as your agent is working for you, he or she doesn't necessarily have your best interests at heart. Which sucks when you consider that you are trusting this person to help you find a house that you'll be living in, quite possibly for the rest of your life.

And eveyone wonders why prices in this city have skyrocketed.

How to buy a house in Toronto: first toss all expectations out the window

Here are a few tips to consider when buying a house in Toronto

1) Unlike most other markets in the country, the asking price is typically the starting point. For the majority of properties—and I'm talking about houses mainly—prospective buyers should expect to bid up from there.

2) Don't get too picky. Decide what you need: parking or yard? Location or a big house? Unless you're ready to put out big bucks—if you have them. Be prepared to compromise.

3) There are no deals to be had. Don't let anybody fool you. There are no junk houses that you can buy for a steal and renovate. There's one house being advertised "as is" in the lovely neighbourhood known as The Pocket, which is listing at around $250K. That's really just the value for the land. The house is falling apart. (A note in the listing warns not to walk onto the porch/deck off the kitchen in the back because, basically, you'll fall through the floor.) That's a tear down and rebuild project. Not a do-it-yourself situation.

4) Be prepared for the long slog. It's a battlefield out there. You will see lots you like and bid on many. The scars you earn are medals of honour.

5) Keep a cool head. You will invariably get into a bidding war, but decide on your maximum and stand firm. If the house you love is selling for more, be patient another will come along.

That said, you will spend more on the purchase price than you were initially thinking you would. (Few decently built houses in Toronto in safe neighbourhoods on a subway or streetcar line below St. Clair will sell for under $300K.) And the house you inevitably get will be the one you bid highest on off all previous attempts. It's just a fact.

6) The house makes the person, not the other way around. It took a while for me to warm to the idea of neighbourhoods I originally thought were too far from the downtown core where I like living. But there are some fantastic neighbourhoods all over the city, of which I am extremely familiar with now. If anything, this whole process has offered me an opportunity to learn more about Toronto than I knew previously.

7) Finally, I've learned that the east end is not nearly "out there" as far as I thought it was. My wife's father is moving out of his house next fall, and there was a point where I thought "If we don't find a house by the time he sells his, we're buying it." It's a nice house. The problem: it's far from downtown. We're talking a 60-90 minute commute by transit, and I'm not prepared to spend the money and time commuting by car every day. (Well, not yet anyway. Maybe if we get really desperate