Siouxie

I understand that your wife will be working in Toronto - was there a reason for selecting Oakville? What do you like about it and where are you looking at there?

Unfortunately prices have gone through the roof even in my city - which is around an hour from Toronto.. mostly due to others being priced out of the market in Toronto, Oakville, Mississauga etc., and moving further around the golden horseshoe.

From my post on another thread..
Burlington would be my choice if you need to commute - it has direct transit to Toronto; a beach, there are some reasonable Brit pubs, restaurants, parks - rib fests and other festivals, amongst other things - and it's still cheaper than Oakville.. with a town feel rather than a city feel. (or Hamilton, but it's not much cheaper now!). You could also consider Georgetown or one of the other smaller towns a little inland or go to the other side of Toronto - how will your wife commute? Transit or own vehicle?

HGerchikov

Some brokerages (more now since Covid) will allow a wire transfer of your deposit. I have done it once with a rental client from the US who wire transferred the deposit. Your Realtor should be able to help you with that and they need to put a clause in the offer describing how the deposit will be paid and how long it would take to arrive as the default is by cheque and within 24 hours of acceptance. You would also need to check limits on transfers with your bank ahead of time so you are ready to go when needed. Time is of the essence in real estate transactions, so if that deposit doesn't arrive on time you are in breach of contract and, in the worst case scenario, the Seller can sell to someone else and sue you for the deposit (you would be unlucky for that to happen but legally it can). Your biggest issue would be that in a bidding war, Sellers expect to see proof of the bank draft, before Covid they would want the actual draft to be delivered with the offer, now they ask for a photograph of the draft. We are seeing more and more people starting to put in several offers at the same time and then simply not delivering the deposit on the properties they don't want if they win the bids on more than one. They, mistakenly, believe that if they don't deliver the deposit then the deal is off, they are actually opening themselves up to be sued for the deposit amount, and potentially any losses the seller experiences in reselling the property.

The listing prices, at the moment mean absolutely nothing so please don't calculate affordability for you based on those. If a sellers agent thinks his house is worth $1.25mi for example it would be listed at anywhere between 999k and 1.199k, it will likely sell in the $1.3mi range. Houses in that price range (which in Oakville is your basic 3-4bedroom, single car garage detached family home) have gone up over 300k in the past 9 months. The first hour of my day is now full of 'you have got to be kidding me' when I see the sale prices from the day before. It is mind blowing.

As you have probably gathered, I sell real estate in Oakville, I have been doing so for the past 11 years and I lived there for 14 years. I have been in an example of practically every house style in Oakville, I have driven down most if not every street and I still don't trust photos and virtual tours. They are great for getting an idea of the ones you want to actually visit but to make a decision to spend over a million dollars, I personally would not. Google street view etc. help, but houses have a feel, some feel really great and others just don't feel like home. The number of times I have taken a client into a house that they have been so excited about after seeing the virtual tour, only for them to decide they hate it the second they walk in the door.

I shall be watching in a month or so, when the houses that have sold for particularly ridiculous prices are due to close to see how many of them don't either due to buyer's remorse or them not being able to get financing because the house doesn't appraise out to what they paid for it. We had a similar situation in 2017 when the market went crazy and then adjusted, a lot of people didn't close, those cases are going through the courts now - it is an interesting read.

Further note: this is intentioned as general information only, it is in no way meant to interfere with the arrangement you have with your realtor in Oakville.

dogstar

Thank you for the response Siouxie and I am grateful for all the replies thus far. We decided on Oakville because overall we like what it has to offer our young family and in particular the schools within the area. As we are from London we are used to the City life and would like to be close enough to the hustle whilst not so far as to leave us feeling more remote. We looked at various other locations including Burlington and on balance we think Oakville is the most suitable although the house prices right now don't lend themselves to endorsing that view. My wife will be working in close to University Avenue (Toronto) and will be making use of the GO Trains driving is not ideal due to parking etc but would be preferable in an ideal world. I personally like the fact Oakville is close to the lake and whilst not an essential definitely nice to have.

dbd33

I worked at University and College. I would have found the commute from Oakville agonizing. First the drive, then the GO train, then the zoo like change at Union, awful. I did commute there from southern Mississauga for a while, I drove rather than endure that (though I did have a parking spot as a perk),. Mainly though, when working in Toronto, I lived in Toronto, first downtown, then in Leslieville, then in the Beach. That was easier and allowed the children a degree of independence that they couldn't have in the suburbs.

dogstar

Thank you HGerchikov for your reply and I am grateful for the insight you have shared and fortunate that you live in Oakville also. I found out about deposit cheque screenshots the other day and am aware of what sellers expect to see ("show me the money"). I'm coming round to the view of being there in person to check things out as I do believe that is the best way and as you state it's potentially a shed load of money at stake. The points you make definitely resonate with me and I shall share them with my wife and we shall consider the implications as best we can. Can you elaborate on the point you make about financing and lower appraisal value? I thought that once the deposit is paid then the working assumption is that a mortgage will be in place?

Many Thanks

dogstar

University Avenue is where she'll be located, I was of the understanding that Union Station is the last stop?

dbd33

University runs north/south and has a subway line under it. If she's going to work at the south end, or is fit, should could walk from Union. It depends how far up she has to go and how much tolerance for beggars she has.

HGerchikov

Ideally before you go shopping for a home you should have a pre approval in place for a mortgage, that is basically where a mortgage professional has looked at your income and outgoings and tells you that they would be prepared to lend you x amount at an interest rate of y. Many people think that provided they buy a house within that budgeted amount then all will be well. There is a second part though and that is how much is the lender prepared to give for a particular property. They aren't going to lend you 800k (even if you qualify for 950k) on a house that is only worth 750k. If you default on your payments they are going to lose money when they foreclose and sell. That is what the financing condition is for, it gives your lender 5 business days to look at the property and say yes we are good to lend you what you need to buy this particular property. The problem is that, to get a place, people have not been including the finance condition and, in some cases the lenders are valuing at much less than the buyer paid and the buyer has to find the difference - if they don't have it then its a huge problem.

I, personally, think that financing conditions (unless buyer can prove he does not require financing) and inspection conditions should be mandatory in all offers, unfortunately they are not. However it is great for lawyers.

dogstar

Roger that!

dbd33

One reason I wouldn't get into a deal like this from far away is that the banks will willingly give you debts no honest man can pay. I think it would be very difficult to judge living costs remotely to the accuracy required to say "I could live with a repayment of $3500/month", or whatever amount, without knowing how much the car insurance costs, do I need a subway pass, all of that. The bank cares about the loan to value ratio but not so much if the customer goes bust; you don't want to end up on the Coast City bus.

HGerchikov

The guy that used to stand outside of 500 University was more likely to notice, and comment, if I had a new outfit than my husband was.

dbd33

Now that's professionalism.

dogstar

Thanks for clarifying that for me and that makes sense. Wondering how rigorous the appraisals are currently under covid and I have been led to believe some are just done externally to give the lender assurance. We have been able to obtain an "agreement in principle" so do know how much the lender is prepared to lend and have been also considering the running costs on top of any repayment. Fortunately we have family in Ontario and elsewhere in CA who have been able help us understand along with the fact my Mrs is Canadian.

dogstar

HGerchikov

I think the rigor of the appraisal is dependent on the lender and the status of the buyer. If they are comfortable that they will easily recover their outlay should the property need to be sold, and you are not close to the loan to value ratio that would trigger a CMHC insurance requirement (ie less than 20% down) then they may be happy to do a desk study to determine value. Appraisers are still going out to properties though.