Why is My Pre-Con Condo Worth Less Than What I Paid?
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- Опубликовано: 2 май 2024
- Consumer question #1 from the new session of our popular consumer Q/A segment, ‘The Situation’ for May!
Urmi once again asks John to respond to the detailed questions you send in about the real estate decisions you are making as you navigate through the Toronto area housing market.
- Watch Question #2: Is My Investment Condo Tax Free if My Son Lives in It?
- Watch Question #3: Should I Sell My Investment Condo Before the Capital Gains Tax Increases?
If you would like to send in your questions to be featured on a future episode, please email askjohn@movesmartly.com
If you have a more specific or particular real estate situation to discuss with John and his team at Realosophy Realty, connect with John at movesmartly.com/meetjohn
Connect with Us
John Pasalis, President and Broker, Realosophy Realty, Toronto | Email: askjohn@movesmartly.com | Twitter: @JohnPasalis
Urmi Desai, Editor, Move Smartly | Email: editor@movesmartly.com | X-Twitter: @MoveSmartly
About This Show
The Move Smartly show is co-hosted by Urmi Desai, Editor of Move Smartly, and John Pasalis, President and Broker of Realosophy Realty. MoveSmartly.com and its media channels on RUclips and various podcast platforms are powered by Realosophy Realty in Toronto, Canada.
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Presale buyers are not investing. They are gambling
It was a one way sure bet tho
Great show guys!! Loved the topic! And to your point John, pre construction for flipping is pure speculation and in my opinion, assignment sales shouldn’t be permitted for profit. This would protect prices from inflating or deflating.
Thanks for the support as always Marco! ~ Urmi
Appraiser here - depending on where you're located, assignment sales are being advertised on the local MLS and we do use them as comps. In most cases, the sale amount of the assignment sales are in line with other resales of 1 or 2 year old units with minimal depreciation to finishes, so that becomes a clear indicator of value for your unit. Another indicator is rental rates. If the finished units in your new building arent attracting higher rents then units in 1 or 2 year old neighbouring buildings, then what exactly is the extra appeal that your building possesses that the others do not? Most likely none.
In terms of pulling the correct comps, thats vital. But ive reviewed tons of other appraisers reports and their comps and nothing comes close to the level of stupidity i see coming from realtors who helped their buyer buy a lemon and now have to justify where they got the number from that they advised their client to pay. Its an absolute shit show.
Is the appraiser accountable to the borrower? Their role is to protect the lender. In this case it seems like they are doing a good job of protecting the lender. It is not uncommon for pre-construction buyers to be coming in underwater right now. It's a hard pill to swallow, but it is what it is.
Always great content, thanks Urmi and John!
Prices are less because Canadians real estate is in a MASSIVE speculative bubble 🫧. And now that bubble is popping...
Thanks.
I don't understand the $50k analogy. Why does the buyer of the precon have to pay $50k if the value of the house goes down by $50k at closing? If anything his initial down payment should result in a lower mortgage interest due to the now lower house value?
Because the bank will only provide a mortgage for the 50k less appraised value, not the contract value. So he has to come up with 50k more to pay the builder the part the mortgage won’t cover.
@@Wildbore48ahh okay, thanks.
In capitalism, there has to be winners and losers. For the longest time, people were making lots from real estate. Now, it is pay back time for the speculators. Let capitalism do its work.
Great discussion!!
Time and price is super important for buying pre- construction condos. If it was bought at a good price, then it is a bad idea to sell.
Just saying, we would all be millionaires if we could time the market.
Urmi, love your chair! ❤😀😀😀
@Peter-sz1sn - Haha thanks! Currently WFH while helping a family member who purchased this beautiful dining room set decades ago from the Kitchener-Waterloo Mennonite community. Thank you for watching! ~ Urmi
Loved this, but add bookmarks to the video please
Noted! Thank you for watching and feedback - Urmi
Why because builders sold pre con at higher price. They already added 4 years profit when they sold precon condo. But how they sold it to expensive. Because of demand. Why so much demand . Because of unregulated buying preconstructin homes /condos process. Unregulated means anyone with borrowed funds from line of credit can buy a pre con. Fake pre approval letters are given to the builders when speculators are buying the pre con making real estate expensive in Canada. Realtors/ Mortgage brokers/MOBILE MORTGAGE REPS AT BANKS charge 500 dollars and can give fake pre approval to anyone. This increases the demand and everyone rushes to buy. There are Profesional people in the industry who do not do fake stuff but there are many unprofessional who are making it hard for canadians.
3 yrs ago price should be lower than now
Pre con has not been profitable for years. Why bother?
It's not a crazy situation at all ? it's called "mark to market" under any financing appraisal.
What's crazy is the degree's of what is basically Financial illiteracy that have 'jumped in' doing so-called "investment" in the Casino GTA Real Estate market ?
Assets go "up"... and Assets can go DOWN in value as well.
"Options" for those assets purchase can go DOWN reflective therein as well.... and will indeed under financing appraisal be reflected by the lower valuation of the base 'asset' the option is based upon.....
or
any other option 'sales' occurring that are indicative of an accurate 'MARK TO MARKET' valuation in time for margin/financing appraisal purposes ?????????????????????????????????
more talk talk talk
You need to answer more questions. One long winded response...get on with it!
Wrong. I find value in the long answers
Rude
I'm sure you're investments are rushed decisions and likely suffering bud. Listen to these knowledgeable professionals.. it'll do you some good
Plz keep Aferica out of the discussion
It's low class and not elegant
It hurts your brand
I mean it's a commonly known online scam, the Nigerian Prince...
@@CalCalCal6996 yes I was alluding to this as a well known scam but perhaps chose a stereotypical example - will def be more considered in future in this regard! ~ Urmi