« Toronto Real Estate Board reports: | Main | Real Estate 'correction in full swing' »
Selling in the current Toronto market
Step One: Face Reality
You unlucky soul. You bought in the red-hot Toronto real estate market but now you need to sell your home and the market is ... well, let's just say sad for sellers. So, what are your options?
The first thing is to take a bit of solace. You are not the only one in this situation. While the real estate may go through periods of hot and cold markets, it never comes to a complete stop. Homes were sold yesterday. Homes were sold today. And homes will sell tomorrow.
The question for you is how to participate in this limited market. Well, why don’t we take a worse case scenario. Let’s assume you purchased a home last year. You financed it with almost nothing down and went with a long term mortgage. The loan payments are high and you are going to have problems making them and you have almost no equity in the property.
The first option is often found to be an ironic one by most stressed homeowners. Instead of avoiding your lender like the plague, you should contact them. Lenders are fully aware of the problems homeowners are facing. The lender does not want defaulted loans on its books, so it will work with you. This often comes in the form of arrangements that will give you time and room to figure out what to do.
Now you must look objectively at your situation. Assume you purchased the home for $450,000 in late 2007 with a $420,000 mortgage. Prices, of course, have gone down in Toronto since last year. Much to your grief, you learn your home is now worth $420,000. If you can’t handle the mortgage payments, it is time to sell now. You will lose money yes, but you will be mitigating your loss as it will only grow as the current trends continue.
But if you can handle your payments indefinitely, so much the better.
Explore all of your personal options thoroughly and possibly get some financial and/or legal advice before you jump to any action.
To be continued ...
February 7, 2009 in Selling Toronto Real Estate | Permalink
TrackBack
TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c51e453ef01053716747b970b
Listed below are links to weblogs that reference Selling in the current Toronto market:
Comments
Much better editorial than the one last week that was subsquently curiously removed. DavidM and I were having a nice dicussion...
Still...even if people can afford to make payments indefinitely, it may be better to sell anyway...at least if you are looking at it from a strictly financial perspective. I am willing to conced that for some, "owning" a home (ok, owning a mortgage is a better term) is more than just financial.
Posted by: Toronto Bear | Feb 8, 2009 12:46:52 AM
