Real estate has changed drastically thanks to a growing number of online companies. These startups impact investment actions like how you get a loan, how you manage your tenants and especially how you find a property. With sites like Realtor.ca you can browse listings in your area and find prices, see pictures and contact agents in the comfort of your pajamas!
As a Canadian real estate investor, you’ll soon have even more opportunities to find new properties online. Recently, American real estate database giants Zillow and Redfin have announced they’re arriving in Canada. Zillow announced in June 2018 it would now feature Canadian homes on its site through Century 21 Canada. In January, 2019 Redfin announced it will be launching nationally and establish brokerage service in Toronto and Vancouver.
No online listing can take the place of a thorough walk-through of a prospective property. Before you start saving your online favorites and contacting agents, keep the following factors in mind.
Listings are marketing tools
The goal of multiple listing sites is ultimately to sell a house. The realtor or homeowner is not incentivized to be honest about any negative features the home has. They can include however many pictures they want, and can take pictures at angles that hide any flaws.
Sites like Zillow earn money from realtors posting their listings; the site’s goal is to get you to contact a realtor for lead generation. The listing just needs to look nice enough that you’ll contact someone!
Realtors are often listing properties on multiple sites and may not be updating each listing as soon as the status changes. A property you love may already be off the market. When you try to contact the agent asking about the specific property not only is it already sold, but also that realtor (and many others – see below) will try to sell you other properties you don’t want.
If you find a prospective home online, research whether it is still for sale before contacting anyone.
Your information is given to other agents
Sites like Zillow are essentially paid lead generators for real estate agents, who work on commission. Once you submit your interest in a property, you may hear from several realtors who have been given your information as a possible lead in their area. This may connect you with a fabulous agent who finds your next property—but be aware that your information is being shared with more than just the person you think you’re contacting.
Because online listings are marketing tools that aren’t always accurate, the prices can vary by thousands of dollars. Even if you’re just browsing to get a sense of local prices, know that the site may be wrong. Don’t use commercial sites to gauge the value of your property. Instead, research with local government to learn more accurate home prices, and work with a professional appraiser.
Poor sense of space
Photography is not great at conveying how big (or small) a room really is, or how the kitchen flows to the dining room. A floor plan might be helpful if included, but nothing can replace moving through the property yourself to determine if the layout makes sense. Always visit a listing you’re interested in, before you even think about moving forward with an investment.
Unable to determine quality of materials
Are those real wood floors, or vinyl? It’s hard to tell in a poorly lit picture, and the listing makes no mention. A physical inspection gives you a sense of the quality of the materials used in the home. It also helps you get a better sense of the condition of the appliances and can help you determine whether any critical repairs may be needed in the future.
Hard to gauge neighborhood personality
The listing mentions a nearby school, and when you look on Google Maps you confirm one is close. But how close? Visiting the home can tell you that the playground is closest, recess is loud and parents use your street for pick-up. Maybe the pictures of the listing are lovely, but nearby homes are unkempt. A visit to the neighborhood highlights nearby amenities (and drawbacks), and gives you a sense of the area’s personality.
When you’re ready to search for a prospective real estate investment property, stick to tried and true methods. Visit the area, hit the pavement and look for properties for sale. If you are looking out of the area, partner with a trusted real estate agent familiar with your needs who can do the legwork for you. Before you invest in any property, always make sure to visit it first—multiple times!