24 November 2010 ~ 0 Comments

Let the Buyer Beware! Yikes!


You know that often used Latin term muttered when things go wrong as you hear of someone who is stuck with some bad real estate…caveat emptor (let the buyer beware). Well today I had to shake my head as I was out looking at potential properties for a client.

These pictures are of a trendy, downtown Toronto loft that originally sold with much fanfare. You know the story…people lining up or camping out for hours in the rain, agents lining up on behalf of clients who can boastfully be overheard talking on their cell phones about how they better “get at least five” units for their savy investors, etc. Well I bet these photos won’t be making into the builders portfolio anytime soon.

Now for consumers who wander in to a sales centre blindly and without their own representation I do feel a tad sorry for any that get stuck with a unit like this one. After all builders sales people are there to represent the builders interests and not those of the consumer and they are very good at doing so.

Sure I know of a few (and I do mean few) sales site reps who will actually tell you which units are the crappy ones (and yes EVERY single building out there has them) and what are more desirable but don’t count on it. After all you are there to buy some property and they are there to sell some property.

There is a provincially mandated 10 day cooling off period when anyone purchases a newly constructed condominium or loft in Ontario and this is your backup to make sure those that are not properly represented have time to think over the purchase they just committed to and potentially change their minds if need be.

Funny thing in this case is that the buyer had used an agent who proudly disclosed to me that he had “put seven clients” into units in this building before construction began. All were flips (bought to be re-sold upon completion) and the agent involved lined up early to get the deals.

Okay look closely at these pictures. Am I missing something? Where is the deal in looking directly into a very large brick wall that takes up the entire living room area! Better yet from the balcony you could sneeze and hit the wall!  This is not a new building nor a building that is planning on being removed anytime soon. At least the balcony is nice and big!

Now you’re probably wondering what the price of this little piece of paradise costs? What would you say if I told you slightly over $250,000! To be fair, the price for the building taking into consideration factors such as location, finishes and overall appeal is not completely out of line. Except for the wonderful brick wall and alley view.

This is what would be considered a crappy unit. Not all units that builders sell are good investments. What do builders and their sales reps do to combat this? They market heavily to current buyers who have either bought in the project and offer both you and your referral friend an financial incentive to bribe you. Or they do the exact same thing within the real estate community. Chances are some agent who either doesn’t know any better or hasn’t thought it through fully will find a buyer for the unit.

With the market volume levelling off to what are considered more balanced and normal market conditions you need to be even more diligent in who you choose to represent you, and in what you buy. Market conditions will not always be positive to bail you out!

Otherwise next time you hear the term Caveat Emptor it may be directed towards you!

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