Buying a condo in Toronto? The following guidelines may prove useful not only for making a successful offer but also setting yourself up for a successful closing.

Thalia Kiriopoulos is a real estate broker who owns and operates Your Home Girl through Keller Williams Preferred Urban Realty. She has over a decade of experience and specializes in the sale of residential homes and condominiums in Ontario. 

Richard Frankel has been helping people buy and sell properties in Scarborough, downtown Toronto and Durham region since 2014. He currently runs his business through On The Block Realty. 

Here's what they had to say about whether it's a good or bad time to buy a condo in Toronto right now.

Are we in a buyer's market?

Frankel says that at the end of the day, it doesn't matter what kind of market we're in. Buyers need to be aware of their financial situation to determine whether it makes sense to purchase a property. 

After sitting down with a mortgage broker to figure out your monthly mortgage payments, you must assess whether you can carry that along with property taxes and maintenance fees. 

Frankel says that in the current buyer's market, more condos are up for sale than being sold. This means that they are sitting on the market for longer periods which leaves room for purchasers to negotiate. 

"Surprisingly, most units are selling for below the asking price," says Frankel.

According to GTA statistics for November 2023, there were a total of 4,236 sales last month. Condos represented 1,212 of these sales. 

Additionally, the number of new listings increased by 16.5 per cent. 

Will the bank give you a mortgage?

If you're not already pre-approved for your mortgage or require more funds and can't get them after making an offer, Kiriopoulos says you may get into some troubled waters.

Alternatively, with finances sorted ahead of making an offer, buyers are in a position to waive the "conditional upon financing" portion of the agreement and save time. 

Will you have a lot of competition?

If your budget is between $400,000 and $600,000, Kiriopoulos says you and the vast majority of potential buyers will be looking at the same properties. You probably won't be able to eliminate competition entirely, but you can employ some strategies to minimize it.

One way to steer clear of a bidding war is to make your offer during peak holiday seasons like winter and summer when many other potential buyers are out of town.

With this in mind, her next piece of advice is to make an offer as soon as the property hits the market. To do this, she says it's important for buyers to hire agents who will dedicate themselves to a consistent lookout for the kind of property they want.

Beware the Status Certificate

A significant part of securing financing for the purchase of a condo is the status certificate. Kiriopoulos advises all prospective buyers preparing to put down an offer to order and review this document beforehand.

A status certificate for condominiums tells the buyer the financial status of the unit they are looking to purchase as well as the financial status of the condominium corporation. 

In other words, it will indicate whether the condominium corporation holds enough resources in its reserve to address any maintenance issues that may arise.

"You want to be in a building that's operating well, right?"

A-lenders like the Royal Bank of Canada, Scotiabank, TD Canada Trust don't want to lend on properties that are in poor condition or operate using materials known to cause maintenance problems. 

For example, Kiriopoulos says A-lenders won't lend on a property that uses Kitec plumbing.

In this type of scenario, a buyer who has already made an offer runs the risk of losing out on a mortgage and their deposit towards the purchase.

"You really have to do your due diligence when you're buying something," she says. 

What to know about rates and property prices

Basic economics says that when prices go up, interest rates go down, and when prices go down, interest rates go up.

"We're in a weird time with the rates being so high," says Kiriopoulos.

She emphasized that these are unprecedented interest rates and that sellers take a risk if they choose to wait for multiple offers to come in before making their decision. Her overall sense is that most sellers will take whatever offer seems decent or good.

Frankel notes that as recent as December 6, the Bank of Canada announced a decision to hold the overnight lending rate at 5 per cent. This is the third month the BoC has held this rate steadily following September and October.

Frankel says this sets up the current market so that buyer's have more purchasing power and flexibility of property choice. 

"Condos, generally in the GTA have always been a great entry level property type for first time buyers," says Frankel. "It's the least expensive, and you can start building equity from there."