Buy a House

We have been thinking outside rental, yes. We tried to jump on the wagon when this place suddenly went on the market (we could have stayed downstairs and rented the upstairs for a very decent amount), we just didn’t have enough time/money. Our attempt DID get us in touch with a mortgage broker and a lovely pair of real estate agents that we really like, so that’s a big step forward on what is still a very long road.

I need to look into capital gains ramifications (this is where my folks got screwed as Americans living in Canada when they sold their place after 30 years) for both myself and them too, if they agreed to co-sign on a mortgage loan, which seems our only option as we don’t live on credit and currently have one income coming in.

Where we live, prices have gone down, but they’re still pretty insane. I see entries here about buying houses or property for what a downpayment would be in this area and sigh deeply. However, interest rates are at an all time low right now, and that’s a very big plus. We’d also be willing to move out of Vancouver, look at something in the lower mainland.

IF we could find a place that had a mortgage helper, we might be able to swing something. We have the ability to really polish a fixer-upper as long as it has decent bones, and it makes more sense to put money into our own home rather than continuing to pay other people’s mortgages. Adding up that amount over the years is painful, and facing a huge rent increase magnifies this fact.

We’ve been watching for a very long time, just keeping an eye on places and prices, seeing what we like, what might be doable. We have a large pile of paperwork we’ve collected from the places we’ve seen or driven past, and lots of photos. Lots of pipe dream chats.

One interesting property we found recently even had two little houses on it, and they’re miniature, but it’s a decent corner lot where a larger rebuild would be possible down the line – just brainstorming, but we liked the concept of having the mortgage helper in a whole other house rather than downstairs.

Back in June, when this place sold, we found a gorgeous, gorgeous little bank owned house (here, sigh) that we completely fell in love with. I couldn’t understand why it was so much less than we’d guessed (for the area and what it is, it’s far below market value). We wrote our agents and they checked it out saying yes, it was a crazy price for what/where it was.

It turned out to be a court appointed sale, and we were thinking a foreclosure, but it turned out that the owner had poured hundreds of thousands into elaborate renovations and restorations and even added a lovely loft and porch area, etc. which would have been fine except that they didn’t check zoning regulations that don’t allow the extra floor and it’s a heritage house, so they were told they had to restore it to what it had been. Unfortunately they’d run out of money so I gather the bank yanked it. It LOOKS like a deal, but would cost twice the price to revert it to half the size. Very sad indeed.

And it’s not like we have 25% to put down on anything, which it sounds like saves a lot of money (for mortgage insurance) in the long run. Taking breaks to talk about buying our own place is helping keep us sane right now, but maybe it’s still worth seriously looking into. It doesn’t have to be our dream home… it just needs to be a start.

Back to realty reality… for now, we’re just hoping to find a half decent place to rent for low enough to continue saving a few bucks towards our starter home dream. Someday.

SO frustrating. We’ve been living here (renting) for 5 years. We love the area, we like our place and could love it if we had free reign to fix it up and choose the upstairs tenants, but the landlord told us when we moved in that he’d raised his kids here, he was attached to the place and it would be staying in the family (he was reassuring us at that point that we didn’t have to worry about him selling). This is why we didn’t blink when the house appraiser came by in mid April – it was for insurance reasons.

Our big dream is still of having our own home, so as the market has gradually become less insane here (we’re in Vancouver), and interest rates have hit a 30 year low, we’ve actually been looking at places. Half dreaming still, but we’ve been going to open houses, collecting info, still saving as much as we can. Driving around looking for realtor signs in neighbourhoods we like. Peeking excitedly at real estate websites.

Imagine our shock when last week the landlord left a message on the machine that he was selling. That the realtor and other various home selling cronies were dropping by the next day. I asked what he was selling for, and if we continued to rent the upstairs, it would definitely be manageable. We could even scrape together 10% for the downpayment. And we’re already here. It’s already HOME.

I spoke with the realtor and he said if we could come up with 10% it would basically be a done deal. The landlord would have liked to see us in here too, he even offered to help finagle something, I think he just mistakenly assumed we wouldn’t be in the market and didn’t want to worry us.

We’ve had issues with the water (the bathroom upstairs needs help), but we know the house pretty well at this point, we know what needs work. We could swing it. It would be a great starter home. The only problem is… it’s SUCH a huge decision, and although he’s selling for under market value (about 60k less than we would have guessed) it’s still a very large amount. It’s not a snap decision.

Then there’s considering becoming landlords ourselves (which can be a huge can of worms, although having a mortgage helper was definitely on our list and we could even move upstairs later, fix up the lower half and rent that instead), having some of our money tied up in investments (or with my folks who offered to help, and they’re out of town until October) plus we’d need to somehow get the loan approved virtually overnight and I don’t see that happening.

We’ve been back and forth and back and forth with the pros and cons (anxiety through the roof with this one), and as much as we’d like to, I don’t think it’s possible with this little time.

The showing is TODAY. I have to spend the next few hours cleaning our home so other people will want to buy it, when what we want is to buy it ourselves. Very frustrating. I am hating the for sale sign behind the white picket fence on our front lawn.

Many things have happened to the housing market here since I first posted in 2006. For a while even the idea of affording the interest on a downpayment was ludicrous (prices rose and rose for 7 years until peaking halfway through last year at over half a million for the tiniest, crappiest home in a crummy neighbourhood). But since then, real estate sales have slid down the pole by more than 1/3 & prices along with them. Obviously these are turbulent times financially, but at least there’s a light at the end of the tunnel.

Average house prices have dropped by a couple hundred thousand, which is still beyond anything we can swing right now, but we’ve been looking into the possibility of maxing out our unused RRSP contribution room towards a first time home buyers withdrawal. They’ve just (yesterday, actually) raised the maximum amount a couple can take out towards their first house to $50,000, which would go a long way towards a downpayment. You do have to pay it back within 15 years, but it would be interest free, and we should be paying into our RRSP’s anyhow.

There’s also the possibility of getting a place with a mortgage helper we can rent out. Although that’s obviously more trouble, it would help with payments. At least we’re looking at different options. Hopefully I’ll be able to post about this goal more frequently than just an annual sigh.

It’s been fun to check places out online – especially things like the big blue house (see pic above) down the street. I’ve admired it for years and when it went on the market recently I found it online and could finally look inside. Stalk. Drool. Fantasize. I’ve found it a great thing to do together, it makes what we want/don’t want in a place clearer, even if we’re still only dreaming.

“Oh yes, a sunshiny breakfast nook is something I’d love too…”

No, it wasn’t an entirely serious conversation, but we sure had an interesting chat after seeing this up on the park board. Hell, I’m open to looking at all potential options. Maybe a secret globular fiberglass treehouse off in the woods.

In reality land, we’re taking more steps to up our credit ratings, budget, and squirrel more away. Even little nest eggs grow if you’re kind to them – sit on them, feed them, talk to them and such. Neither of us being in debt is a bonus. Maybe I should talk to someone about the best way to polish our credit.

On the up side, my brother and his girlfriend seem to be moving along with this one…

Not us, but my parents.
The family home went on the market yesterday. It sold in 2 hours. 2 hours! The capital gains tax is going to be ferocious, since they bought it for a song in the early 70’s, but they did amazingly well, and the selling stress is over.

This may seem off topic, but it could be slightly relevant to this goal someday, both having watched the process and potential future downpayment assistance.

They managed to find a beautiful place in White Rock, about an hour away. What a strange feeling. I grew up in this house. They’ve lived there for nearly 35 years.

Sometimes I flash past this goal and misread it as “Buy a Horse”. Maybe that would be a more feasible (although perhaps less practical) goal.

I haven’t ridden in so long…
I miss it.

We live in Vancouver.
Yeah.

(Falls to the floor laughing uncontrollably. Or is it weeping? Looks like weeping.)