On April 30th, CTPA hosted its Real Estate 101 workshop at the Scarborough Civic Centre, targeting first-time home buyers. The event featured a panel of speakers, including Real Estate Agent/Investor Parth Sutharharan, award-winning Agent Anuja Kumarasamy, and Founder of iConnect Mortgages, Varan Karunanatham. The conversation was moderated by Real Estate Lawyer/Agent John Aruldason. The speakers provided great insights and tips about the real estate market. A special thank you to iConnect Mortgages for sponsoring the event, allowing attendees to learn about the first-time home purchase process, investment properties, and the importance of choosing the right real estate agent. Here is a quick recap of the event for those who could not make it.
Varan Karunanantham spoke about the importance of good credit for mortgage approvals. One of the critical underlying credit factors is how much debt you carry. He advised that young people who may have loans (i.e. OSAP, car loans, credit card loans, line of credit) should first focus on paying off these debts to build credit. Given the current mortgage process, it is becoming increasingly difficult for first-time home buyers to secure a favourable mortgage rate. Don’t be afraid to ask your parents for help with this! Varan suggests asking them for support with the down payment or seeing if they’d be willing to cosign the property with you. Finally, don’t be afraid to explore mortgage rates with B lenders, as they often have fewer penalties for breaking a mortgage before the end of the term.
They’ve identified the 5 C’s of Credit: Capacity, Capital, Collateral, Credit, and Character. Capacity refers to your ability to repay loans. Lenders will check your capacity by evaluating how much debt is owed compared to how much income one makes. Capital includes one’s savings, investments, and assets that they’re willing to put towards a loan. Collateral involves something one can provide as security in exchange for a loan. Credit evaluates other information that will help determine if one qualifies for the loan and the terms of how they’ll receive it. Finally, Character refers to one’s credit history and how they’ve managed debt in the past. Mortgage lenders refer to these 5 C’s to determine the size and terms of a loan when inquired by a prospective home buyer.
Anuja outlined the importance of choosing the right real estate agent. Ensure you find someone who suits your communication style to understand your wants and needs. She suggests reading reviews on Google and rating on myagent.com, or even consulting your friends and family for their recommendations based on experience. Also, dealing directly with the seller’s agent can often be unfavourable as they may withhold certain adverse factors about the property. Take the time to read through the buyer rep agreement and pay attention to set timelines and commission rates, especially if you are working with multiple agents.
Parth focused on the process of purchasing pre-construction condominiums. Did you know that when buying a pre-construction condo, you have a “10-day cooling period” to review contracts with lawyers, prepare post-dated cheques, and provide mortgage pre-approval. So don’t feel rushed to check everything at once and use this time to go through all the paperwork and keep track of all the relevant timelines and deposit due dates. Parth’s biggest tip was “time in the market (is greater than) timing the market,” where it is valuable to enter the real estate market as soon as possible rather than evaluating the highs and lows of the market to determine the best time to enter.
If the pre-construction process is not for you, you can always consider the resale market. Anuja’s tip for purchasing a resale home successfully: don’t be too picky! Keep in mind that you can constantly renovate the house in the future to fit your taste when it comes to the little things such as cabinets, flooring, etc. Do a thorough walkthrough and inspect the property as things like roof integrity and leaks can be major red flags and quite expensive to renovate. If you love the home, consider writing a personalized letter to the seller to increase your chances of getting the house in today’s competitive market.
Overall, the Real Estate 101 workshop hosted by CTPA and sponsored by iConnect Mortgages was a success! Our presenters did a great job providing informative context about the mortgage approval process, purchasing a pre-construction condominium, and identifying the right real estate agent that aligns with the home buyer. Special thanks to John Aruldasan, Parth Suthaharan, and Anuja Kumarasamy for moderating our workshop! Keep your eyes on our social media pages for a chance to build on this knowledge in Real Estate 102 in 2023!