Trying to buy a property in Ontario can feel intimidating, especially when all the real estate news seems to talk about how high prices are getting. Although prices can be high for many properties in many areas, there are still discount properties in Ontario if you know where to look for them. When you know how to look for discounts on your next property, you can find some hidden gems that cover everything you’re looking for without breaking the bank.
Importance of Strategy in Property Hunting
When you really want a new property, it can be tempting to jump on new listings because they seem exciting. It can be easy to get pulled into a bidding war and end up paying more than you meant to. You should go into the homebuying process with a good idea of what you can afford and do your best to not let your excitement over a new home lead you to overpaying, and even paying more than the property is worth.
You shouldn’t let fear of missing out guide your search for a property. Overpaying for a property can limit your future profits and even lose you money on your investment. By thinking outside the box and looking at different options, you can find a lot of options for discounted properties. You’ll end up with a great property in Ontario that you can afford.
Consider Older MLS Listings
When people are looking at MLS listings and see that a property has been on the market a long time, they assume that something must be wrong. They think others must have looked at the property and seen some significant flaw they’re missing, so they overlook it.
Just because the listings have been the MLS for a while, doesn’t mean there’s anything wrong with the property. If you make an offer, you might end up with a great property at a discounted price because the owners are tired of holding on to that property. They were probally making mortgage payments longer than they expected, so they’ll be more willing to consider any offer to get the property off their hands.
There are several reasons a property will be listed on the MLS for a long time. It may be that the price is too high, but this may encourage sellers to accept a lower offer, even if they were initially stubborn. It could also be that the seller has a hard time showing the property, or the property needs some work. This can lead sellers to be more willing to accept a lower offer. None of these factors mean this is a bad property to purchase, and in fact it may be a great way to get you the right property at the right price.
Benefits of Off-Market Listings
An off-market listing is when a property is for sale but not listed on the MLS and these types of listings are also a great opportunity for discounts. Sellers choose to list their homes off market for a variety of reasons from testing the waters, to a more private sale, to saving a bit on commission since there’s either one, or no agent involved. By considering off-market listings, you’ll be seeing properties that not everyone is seeing. Since less people are seeing the properties, there’s less competition and you’re less likely to find yourself drawn into a bidding war.
Often, with off-market homes, sellers may be in less of a rush to negotiate and close the deal, which means sellers will be more relaxed and willing to consider lower prices. In addition to potentially finding a property at a discounted price, you are seeing more properties than you would otherwise see, increasing the chance that you’ll find the right property for you.
Consider Buying Properties with Issues
Some people may avoid properties with serious physical problems or problem tenants, but these types of properties are often an opportunity for big discounts. The purchase price is often listed at well below market value because of the repairs needed. These properties are sometimes sold “as is”, meaning the buyer will be responsible for all costs to repair them after closing. In these situations, sellers are usually more willing to accept lower offers, so they don’t have to deal with the hassle of making repairs on their own.
When properties have physical issues, there will also be less competition from other buyers, so you’re unlikely to be drawn into a bidding war. The process can also move much more quickly since the seller doesn’t need to take the time to make repairs before the sale. Physical problems you might encounter include outdated or inefficient heating and cooling systems, leaky windows, insufficient insultation, or even foundation problems. Some of these problems can be more serious and more expensive to fix than others, but a home inspection and a good contractor can give you a good understanding of what you’re getting into and what repairs might be needed.
Although you’ll spend some money on repairs, often the deal you’ll get on the property will save you even more than you’ll have to put into renovations. If you’re planning on renting out the property, your renovations can increase the value of the property and it can also become a source of income after the upfront costs.
Financial Opportunities in Power of Sale or Foreclosure
You may find additional opportunities for discounts in properties undergoing power of sale or foreclosure. Power of sale, which is more common in Ontario, is when a homeowner defaults on their mortgage, the homeowner retains ownership of the home, but the lender the power to take possession of the property and sell it. It’s a relatively quick process since it can begin without going through the court system, and this quick process can be beneficial to potential buyers. In these processes, the lender will be focused on recovering their funds as quickly as possible, so they’re more likely to take the first offer they get so they can get the property off their hands.
The seller also likely won’t want to put the property on the market over market value, because that would delay the process even more. When buying a property undergoing power of sale or foreclosure, you’ll want a good lawyer to help with the transaction. Sometimes, a lender can deny the sale if the purchase price is not enough to pay off all debts. Other times, the debt holders can accept a loss in order to sell the property. You’ll need to discuss these possibilities with your lawyer.
When purchasing power of sale or foreclosure properties, it’s recommended that you get a home inspection, so you’re not surprised with any potential issues. Although there can be risks, the potential benefits and discounts that can be found, often from the quicker process, can be even greater.
The Power of Quick Transactions
In a lot of the potential for discounts described above, the discount comes from the fact that it can be a quicker transaction. A cash sale is one example of a scenario where the transaction can close quickly. A cash sale can usually significantly speed up the closing process, and it might only take a week or two. With a cash sale you’re able to purchase the property without a mortgage. You get to skip the mortgage process and appraisal which are often the lengthier parts. Often purchasing a property in cash is a good choice if your goal is to rent or resell the property for a profit. With cash purchases you’re often taking the home “as is”, and you will be responsible for any necessary repairs.
Usually, sellers most interested in cash sales are also hoping to sell quickly, meaning they won’t want to entertain a bidding war. Sellers are also more likely to accept a cash offer because they don’t have to worry about the buyer backing out if financing is denied. Paying cash also eliminates any closing costs and eliminates the cost of any interest on the loan. In all scenarios where the transaction is quicker, the seller is more likely to accept their first offer and you’re unlikely to be drawn into a bidding war. In addition to saving you time, quick transaction scenarios can be a great way to find yourself a discount on a property.
Leveraging Realtor Connections
When looking for discount properties in Ontario, you should work with a real estate agent who has experience with power of sale transactions. They can provide you strategic guidance and answer any questions you may have. With the advice of an experienced realtor, you can help make the experience buying a power of sale or foreclosure property, or any other discounted property, a positive one.
Jonathan Alphonso, who is an experienced mortgage agent, has in-depth knowledge of the intricacies of arranging mortgages under difficult circumstances. He can provide detailed advice regarding power of sale and foreclosure circumstances, as well as many other scenarios described in this article. Jonathan can be contacted directly at 647-710-1351 or by email at jonathan@mortgagebrokerstore.com. With his advice, you’ll be able to find great discounts on property in Ontario.
Conclusion
In the process of purchasing property in Ontario, it can be easy to get caught up in the excitement of a bidding war and end up paying way more than you intended for your property. However, there are deals on properties if you know how to look for them. You just need to come into property hunting with a good plan. By looking at properties that others might have overlooked, like older MLS listings, properties with issues, or properties undergoing power of sale or foreclosure processes, you can save money on your property purchase. If you try some of the strategies above in your next search for a property in Ontario, you’ll find the right property for you at a discounted price.
