Ontario Real Estate Association says home ownership can still be a reality
TORONTO, November 10, 2011 — With the average price of Ontario homes on the rise to almost $360,000, and higher in some cities, the Ontario Real Estate Association (OREA) recommends potential homebuyers look beyond “turn-key” properties that are move in ready and consider homes that are in need of renovation.
“Everyone wants a house or condo that will be perfect the minute they move in so they only have to do the minimum amount of work to it,” says Barbara Sukkau, president of OREA. “But with the price of houses continuing to rise, and some buyers desperately looking for a family home in a seller’s market, it may not be an option for all buyers. Buying a property that needs work can be a way to save on the overall cost even when you factor in the cost of an extensive renovation,” says Sukkau.
OREA recommends potential homebuyers work with their Realtor to identify properties that will build equity after improvements are made but still remain in budget. Together with their Realtor, homebuyers should research what the top homes in the neighbourhood sell for before buying a fixer-upper.
“It doesn’t make sense to invest $100,000 worth of renovations in a property if the other homes only sell for fifty thousand more than what you bought the house for,” says Sukkau. “Buying a house that needs renovation should grow equity — not become a property that’s too expensive for the neighbourhood when you want to sell.”
Sukkau says there are other benefits to buying a property that needs renovation, such as the fact that HST does not apply to the price of a resale home, unlike newly built homes, which can save a homebuyer thousands of dollars. Also, the federal government currently offers grants up to $5,000 to owners who want to make their home more energy efficient. If an older home needs new windows or a new furnace, then homeowners can apply for the grant for this cost. And finally, renovating a home lets the homebuyer add their own personality to the space and determine what’s most important to them. Newly built homes, while beautiful, can have a cookie-cutter feel and look very similar to the other homes in the neighbourhood.
No matter if a homebuyer decides on a fixer-upper or a property that needs no improvements, according to Sukkau the most important thing is for potential homebuyers to know their budget and stick to it. “Before looking at any home, discuss with your Realtor what your budget is for both the property and any possible renovation. Even though it is difficult, remain emotionally detached when looking at homes, and if a property is beyond your means, then move on to the next one,” says Sukkau.
A video about how to calculate home affordability is available at http://bit.ly/OREAaffordability. More information on buying a property can also be found at howrealtorshelp.ca.
About the Ontario Real Estate Association
The Ontario Real Estate Association represents 50,000 brokers and salespeople who are members of the 42 real estate boards throughout the province. OREA serves its REALTOR® members through a wide variety of professional publications, educational programs, advocacy, and other services. OREA.com