Buying a house in 2014. Maybe?
December 30, 2013 8:55 AM Subscribe
The only solution I can see that will allow me to live with all my pets (current and future) is to finally purchase my own home. However, I'm not entirely convinced this won't be a colossal mistake! On the other hand, if I'm not ready now I probably never will be, nor will I be able to achieve my "pet goals". Am I ready to be a homeowner? Is this really a good idea for me? Are there any other options? Obviously, there are some snowflakes.
Ok mefites, I need another point of view. I'm seriously considering buying a house for the first time in 2014. (Technically a condo or townhome, because single-family homes are just not possible for me in this insane Vancouver-area market. It's beyond nuts.) I've been mentally debating buying for at least 5 years, but I just cannot pull the trigger. I have talked to a real estate agent now though, so I'm getting closer...
I'm buying for one as a mid-30s, single female making decent but not extravagant money. No kids, but pets. I currently have 3 cats, but I also want to get a dog sooner rather than later. In fact, that's my main impetus for buying a house; I want to get into a place that allows pets. It's tough enough to buy attached housing with this many paws -- most building stratas only allow a max of 2 pets, but a few do allow more. However, renting with 3 cats is insanely tough; adding a dog while renting would most likely make me homeless or living on a farm a bazillion miles from anywhere. I also want to be able to foster again (my 3 cats are a colossal "foster failure"). And it'd be nice to actually be able to make permanent decorating choices for once, as well.
But... the idea of committing to a house, and a mortgage, turns me into an anxiety-ridden mess. What if I lose my job? What if the neighbours seriously suck? What if this insane housing market bubble finally bursts? What if I finally truly cant take this rain any more and want out of Vancouver? What if I just *want* to move? Although I've lived in the Vancouver area most of my life, I get antsy staying in the same place. At 3 years, this is longest I've lived in one apartment since I was 18 (half my life!) and I'd have probably moved by now if it wasn't for the challenges of finding pet-friendly rental housing. I realize buying a house means I should be prepared to commit for at least 5 years; this is the part I'm having the most trouble with, even though I have no real plans to be anywhere else.
Also - can I even take care of a house on my own? I'm smart, I can learn things, but the idea of dealing with my own blown hot water tank, busted appliances, exploding toilets, or any of the other random things homeowners deal with on a daily basis freaks me right out. I was way too proud of myself for simply unclogging my kitchen sink last month without calling my landlord.
As an aside, alternatives considered include just up and moving somewhere with better weather and more reasonable housing prices, or blowing my entire downpayment on an RV and just living in that with all these animals, with the freedom of driving and staying anywhere I want. Assume for simplicities sake these really aren't viable options. If there's another option I haven't thought of though to achieve my "pet goals" though, I'm listening.
I realize that there's no real answer to all these questions, but here's what I'm hoping to get some insight on: Is home ownership even right for me? (I've seen the NYTimes calculator. It makes financial sense to buy if I stay >5 years.) When is it a mistake? How do you all deal with the nagging doubts and uncertainty surrounding making a purchase and commitment that's this huge? I'm in my freakin' mid-thirties, financially stable and with goals that do not mesh with my city's rental housing market. If it's not right for me now I get the feeling it'll never be right, and I'll be stuck here forever! Thanks all!
Ok mefites, I need another point of view. I'm seriously considering buying a house for the first time in 2014. (Technically a condo or townhome, because single-family homes are just not possible for me in this insane Vancouver-area market. It's beyond nuts.) I've been mentally debating buying for at least 5 years, but I just cannot pull the trigger. I have talked to a real estate agent now though, so I'm getting closer...
I'm buying for one as a mid-30s, single female making decent but not extravagant money. No kids, but pets. I currently have 3 cats, but I also want to get a dog sooner rather than later. In fact, that's my main impetus for buying a house; I want to get into a place that allows pets. It's tough enough to buy attached housing with this many paws -- most building stratas only allow a max of 2 pets, but a few do allow more. However, renting with 3 cats is insanely tough; adding a dog while renting would most likely make me homeless or living on a farm a bazillion miles from anywhere. I also want to be able to foster again (my 3 cats are a colossal "foster failure"). And it'd be nice to actually be able to make permanent decorating choices for once, as well.
But... the idea of committing to a house, and a mortgage, turns me into an anxiety-ridden mess. What if I lose my job? What if the neighbours seriously suck? What if this insane housing market bubble finally bursts? What if I finally truly cant take this rain any more and want out of Vancouver? What if I just *want* to move? Although I've lived in the Vancouver area most of my life, I get antsy staying in the same place. At 3 years, this is longest I've lived in one apartment since I was 18 (half my life!) and I'd have probably moved by now if it wasn't for the challenges of finding pet-friendly rental housing. I realize buying a house means I should be prepared to commit for at least 5 years; this is the part I'm having the most trouble with, even though I have no real plans to be anywhere else.
Also - can I even take care of a house on my own? I'm smart, I can learn things, but the idea of dealing with my own blown hot water tank, busted appliances, exploding toilets, or any of the other random things homeowners deal with on a daily basis freaks me right out. I was way too proud of myself for simply unclogging my kitchen sink last month without calling my landlord.
As an aside, alternatives considered include just up and moving somewhere with better weather and more reasonable housing prices, or blowing my entire downpayment on an RV and just living in that with all these animals, with the freedom of driving and staying anywhere I want. Assume for simplicities sake these really aren't viable options. If there's another option I haven't thought of though to achieve my "pet goals" though, I'm listening.
I realize that there's no real answer to all these questions, but here's what I'm hoping to get some insight on: Is home ownership even right for me? (I've seen the NYTimes calculator. It makes financial sense to buy if I stay >5 years.) When is it a mistake? How do you all deal with the nagging doubts and uncertainty surrounding making a purchase and commitment that's this huge? I'm in my freakin' mid-thirties, financially stable and with goals that do not mesh with my city's rental housing market. If it's not right for me now I get the feeling it'll never be right, and I'll be stuck here forever! Thanks all!
The biggest pitfall to buying a property is that people get swept up in their emotions and lose sight of the economic and practical realities.
It may help if you consult a fee-only financial planner who has experience with some of the issues and questions a first-time buyer has (real estate agents, at least in the US, are paid on commission when you buy your home and can't really be trusted to give you the unvarnished truth). Consider all the costs that go into home ownership: the price of the home, the cost of financing, maintenance, taxes, sewer and water fees, increased cost of utilities, landscaping and snow removal, strata/condo fees, insurance, etc. I've spoken with a number of friends after they've purchased properties, and they didn't realize they had to pay for water, or that condo fees are a thing. Spend some time thinking about all the costs involved, and add them up.
How does that compare to what you're paying now, and what you will be able to afford without stress? Fix that number in your mind when you look at properties. If the townhouse with the awesome yard is above your comfort number, keep looking. Don't buy based on how much you love the property; buy based on what you can afford.
Housing is a consumable good, not an investment--and I think you've got, generally, the right approach. You're interesting in buying because you need a place to live that meets your needs. Others may buy because they want to be in a particular school district, or they need a garage to work on their car; you've got pets. That seems reasonable enough.
If you focus on the numbers and aren't swayed by your desires, you should be able to make good decisions. Your concerns about getting tied down, or losing your job are normal--and very important to come to your own decision on. Everyone who wants to buy has to come to term with those questions personally and then either buy or rent.
posted by Admiral Haddock at 9:13 AM on December 30, 2013 [1 favorite]
It may help if you consult a fee-only financial planner who has experience with some of the issues and questions a first-time buyer has (real estate agents, at least in the US, are paid on commission when you buy your home and can't really be trusted to give you the unvarnished truth). Consider all the costs that go into home ownership: the price of the home, the cost of financing, maintenance, taxes, sewer and water fees, increased cost of utilities, landscaping and snow removal, strata/condo fees, insurance, etc. I've spoken with a number of friends after they've purchased properties, and they didn't realize they had to pay for water, or that condo fees are a thing. Spend some time thinking about all the costs involved, and add them up.
How does that compare to what you're paying now, and what you will be able to afford without stress? Fix that number in your mind when you look at properties. If the townhouse with the awesome yard is above your comfort number, keep looking. Don't buy based on how much you love the property; buy based on what you can afford.
Housing is a consumable good, not an investment--and I think you've got, generally, the right approach. You're interesting in buying because you need a place to live that meets your needs. Others may buy because they want to be in a particular school district, or they need a garage to work on their car; you've got pets. That seems reasonable enough.
If you focus on the numbers and aren't swayed by your desires, you should be able to make good decisions. Your concerns about getting tied down, or losing your job are normal--and very important to come to your own decision on. Everyone who wants to buy has to come to term with those questions personally and then either buy or rent.
posted by Admiral Haddock at 9:13 AM on December 30, 2013 [1 favorite]
When you're looking at a particular place to buy, figure out how much you could charge for rent. If you need to leave before being able to sell, most places in Vancouver will, at minimum, cover your mortgage, taxes and a property manager.
posted by barnone at 9:15 AM on December 30, 2013
posted by barnone at 9:15 AM on December 30, 2013
Also - can I even take care of a house on my own? I'm smart, I can learn thingsSure you can. Lots and lots of people do. You're smart, you can learn things. And even so, you don't have to personally handle every issue that comes your way - if something happens that you don't feel comfortable handling, call a plumber/carpenter/electrician/whatever.
but the idea of dealing with my own blown hot water tank, busted appliances, exploding toilets, or any of the other random things homeowners deal with on a daily basis freaks me right out.I've lived in my own home for over a decade now. In that time, I've dealt with two things that absolutely had to get fixed ASAP, so if you're concerned about this sort of thing happening anywhere near daily, don't worry about it so much.
And dealing with those things was not anywhere near as troublesome as you might think. In both cases it essentially boiled down to (1) Take immediate simple emergency action to mitigate ongoing damage; (2) Determine whether or not I'm capable of dealing with the root of the situation situation myself; (3) Assuming "no", call somebody who is capable of dealing with the root of the situation.
The "immediate simple emergency action" that I'm referring to really is just simple stuff that anyone can do - for example, one night, my roof started leaking during a rainstorm. (1) I put buckets under the drips. (2) I (easily) determined that no, I am not a competent roofer. (3) In the morning I called a competent roofer.
posted by Flunkie at 9:19 AM on December 30, 2013 [1 favorite]
People with complete confidence in their home-owning capabilities, and complete satisfaction with the home they're buying, famously develop buyer's remorse after pulling the trigger. Ask anyone who owns a house: it always turns out to be more work and responsibility and expense than you'd imagined. For starters, there are always problems with the house which the inspector missed.
Whatever you decide, bear in mind that if you go in with anything less than complete confidence and complete satisfaction, the realization of the necessary work and expense will be that much more gut wrenching.
It's much like a small business. Everyone always underestimates the work and investment required to persevere through the startup. Even if you go into it feeling totally gung-ho, it's enough to shake your resolve. So the usual advice is to not get into it unless you're totally gung-ho.
posted by Quisp Lover at 9:27 AM on December 30, 2013
Whatever you decide, bear in mind that if you go in with anything less than complete confidence and complete satisfaction, the realization of the necessary work and expense will be that much more gut wrenching.
It's much like a small business. Everyone always underestimates the work and investment required to persevere through the startup. Even if you go into it feeling totally gung-ho, it's enough to shake your resolve. So the usual advice is to not get into it unless you're totally gung-ho.
posted by Quisp Lover at 9:27 AM on December 30, 2013
When is it a mistake?
It is a mistake when a normal expense (like a dead furnace plus a roof leak plus a frozen water line all in one month) would create a financial crisis for you. Those kinds of things happen reasonably often when you own, as do the more discretionary but important to your happiness expenses like replacing the hideous counters and pink toilet.
It's also a mistake if the numbers only work with continued appreciation of property values. Can you ride out a 10 or 20 percent slump?
But there are risks and costs associated with renting also, so don't look just at the risks of owning.
posted by Dip Flash at 9:30 AM on December 30, 2013 [2 favorites]
It is a mistake when a normal expense (like a dead furnace plus a roof leak plus a frozen water line all in one month) would create a financial crisis for you. Those kinds of things happen reasonably often when you own, as do the more discretionary but important to your happiness expenses like replacing the hideous counters and pink toilet.
It's also a mistake if the numbers only work with continued appreciation of property values. Can you ride out a 10 or 20 percent slump?
But there are risks and costs associated with renting also, so don't look just at the risks of owning.
posted by Dip Flash at 9:30 AM on December 30, 2013 [2 favorites]
I think it's well known that I'm anti-house buying and I'll explain why in a minute. I think that you're running under a fallacy about the pet situation. Townhouses and Condos can be as strict or MORE strict than apartments with regards to pets.
Apartments can charge you per head in your home (I was as agog as you are, but we pay a "cat tax" of $20 for EACH kitty!) An apartment can ask for a pet deposit for each animal to cover any possible damages. A condo can't, so they generally err on the restrictive side. . Also, people on Condo Boards are jerks and enjoy making rules. My condo wouldn't allow pets at all! I had a friend who lived in a condo and to walk her dog, she had to put him in a...STROLLER...he wasn't allowed to put his paws down in the common areas! So just because you own it, doesn't mean that you can have as many pets as you like.
Also, check your municipal rules, some places have limits on the number of pets you can have at any particular domicile. This is to keep "crazy cat ladies" from hoarding animals.
You can learn the things you need to know about maintaining a home, it's not hard, but it does consume a lot of leisure time. Living in a Townhouse or Condo can minimize these things, but you give up a lot of choice in the process. If the board decides that it's time to paint, they'll assess everyone for the cost. The residents may weigh in, but the board will make a decision. If you don't have the dough for the assessment, they can put a lien on your unit.
I gave up being a homeowner when my sewer line needed to be replaced for the second time. I knew that a new HVAC and new roof were looming on the horizon and I was sick and tired of pouring money into a house.
We have moved to an apartment now and have low stress and are quite happy.
Since in Canada, I don't believe that you can deduct your mortgage interest, there aren't a lot of monetary gains to homeownership if the market stagnates, or takes a dive.
I'm admittedly biased, but nothing in what you wrote above screams out at me that you should be a homeowner.
Find a nice house to rent, perhaps from a fellow animal rescue person, and work out a deal where you can have pets and foster animals. That will solve the one problem you have.
Everything is a crapshoot. Therefore, go with the lower risk option.
posted by Ruthless Bunny at 9:50 AM on December 30, 2013 [4 favorites]
Apartments can charge you per head in your home (I was as agog as you are, but we pay a "cat tax" of $20 for EACH kitty!) An apartment can ask for a pet deposit for each animal to cover any possible damages. A condo can't, so they generally err on the restrictive side. . Also, people on Condo Boards are jerks and enjoy making rules. My condo wouldn't allow pets at all! I had a friend who lived in a condo and to walk her dog, she had to put him in a...STROLLER...he wasn't allowed to put his paws down in the common areas! So just because you own it, doesn't mean that you can have as many pets as you like.
Also, check your municipal rules, some places have limits on the number of pets you can have at any particular domicile. This is to keep "crazy cat ladies" from hoarding animals.
You can learn the things you need to know about maintaining a home, it's not hard, but it does consume a lot of leisure time. Living in a Townhouse or Condo can minimize these things, but you give up a lot of choice in the process. If the board decides that it's time to paint, they'll assess everyone for the cost. The residents may weigh in, but the board will make a decision. If you don't have the dough for the assessment, they can put a lien on your unit.
I gave up being a homeowner when my sewer line needed to be replaced for the second time. I knew that a new HVAC and new roof were looming on the horizon and I was sick and tired of pouring money into a house.
We have moved to an apartment now and have low stress and are quite happy.
Since in Canada, I don't believe that you can deduct your mortgage interest, there aren't a lot of monetary gains to homeownership if the market stagnates, or takes a dive.
I'm admittedly biased, but nothing in what you wrote above screams out at me that you should be a homeowner.
Find a nice house to rent, perhaps from a fellow animal rescue person, and work out a deal where you can have pets and foster animals. That will solve the one problem you have.
Everything is a crapshoot. Therefore, go with the lower risk option.
posted by Ruthless Bunny at 9:50 AM on December 30, 2013 [4 favorites]
Given the options of a) hunt far and wide for a place that will accept more pets or b) buy a house and deal with all the stresses of home ownership, I honestly think a) will be the less stressful option.
It might take you a while to find what you're looking for, but I'm willing to bet it is out there. I currently own 2 cats and a dog and I have yet to find myself homeless. It just takes longer to find a place because a lot of places do restrict pet ownership.
posted by zug at 10:01 AM on December 30, 2013 [1 favorite]
It might take you a while to find what you're looking for, but I'm willing to bet it is out there. I currently own 2 cats and a dog and I have yet to find myself homeless. It just takes longer to find a place because a lot of places do restrict pet ownership.
posted by zug at 10:01 AM on December 30, 2013 [1 favorite]
blowing my entire downpayment on an RV and just living in that with all these animals, with the freedom of driving and staying anywhere I want
I'm not sure why you are ruling this out. My husband and I live in an RV with 2 cats and a dog. I don't know that I'd want to have a really excitable puppy in an RV, but our adult dog has loved this lifestyle.
posted by desjardins at 10:03 AM on December 30, 2013
I'm not sure why you are ruling this out. My husband and I live in an RV with 2 cats and a dog. I don't know that I'd want to have a really excitable puppy in an RV, but our adult dog has loved this lifestyle.
posted by desjardins at 10:03 AM on December 30, 2013
Is home ownership even right for me? (I've seen the NYTimes calculator. It makes financial sense to buy if I stay >5 years.)
I alluded to this in my previous answer, but I thought I should expand on it. NYTimes Calculator is taking into account the US Tax Exemption for Mortgage Interest. Canada doesn't have this exemption.
In an amoratized loan, the interest is front loaded. So say your mortgage payment is $1000 per month. Of your first mortgage payment, $990 will just be interest with $10 going to the principle on the loan. It shifts slightly, payment after payment over the years, but in the first year, of the $12,000 you'll make in mortgage payments, about $125 will pay down the principle loan amount.
In the US, that's no problem, because I can deduct that interest payment, of $11,875 from my taxible income, so there's a huge benefit to me. In Canada, you're just paying money to the bank for the privilage of some day, in about 10 years, starting to make significant payments of the principle.
Now, if your house appreciates in value, you'll build equity that way. If it doesn't, or if heaven forbid, it does DOWN in value, it's possible that you'll owe more on the house than it's worth.
So while the NYT calculator says 5 years, more realistically, in Canada, it would be 10 or longer! Use this calculator and see if you get a different result.
posted by Ruthless Bunny at 10:06 AM on December 30, 2013
I alluded to this in my previous answer, but I thought I should expand on it. NYTimes Calculator is taking into account the US Tax Exemption for Mortgage Interest. Canada doesn't have this exemption.
In an amoratized loan, the interest is front loaded. So say your mortgage payment is $1000 per month. Of your first mortgage payment, $990 will just be interest with $10 going to the principle on the loan. It shifts slightly, payment after payment over the years, but in the first year, of the $12,000 you'll make in mortgage payments, about $125 will pay down the principle loan amount.
In the US, that's no problem, because I can deduct that interest payment, of $11,875 from my taxible income, so there's a huge benefit to me. In Canada, you're just paying money to the bank for the privilage of some day, in about 10 years, starting to make significant payments of the principle.
Now, if your house appreciates in value, you'll build equity that way. If it doesn't, or if heaven forbid, it does DOWN in value, it's possible that you'll owe more on the house than it's worth.
So while the NYT calculator says 5 years, more realistically, in Canada, it would be 10 or longer! Use this calculator and see if you get a different result.
posted by Ruthless Bunny at 10:06 AM on December 30, 2013
Given the options of a) hunt far and wide for a place that will accept more pets or b) buy a house and deal with all the stresses of home ownership, I honestly think a) will be the less stressful option.
I have enjoyed being a homeowner, but it's not for everyone. I agree with this statement above. Don't buy a home just because you feel like it's the socially acceptable thing to do, and buying a home just to get an additional dog will not be worth it. Look for a non-standard rental situation that will suit your needs.
Look at it this way - landlords just want their properties to be in good condition when you leave. That's why they have rules about pets. Enough money and trust can solve this problem. The house I'm renting right now advertised as "no pets", but since I was clearly going to be a good renter with a reliable job and income source, a good credit history, etc., I was able to negotiate two cats. I just looked at the house first and filled out a rental application so that the landlords liked the idea of me, then said "OK, I'll take it but my two cats have to come along." I was prepared to offer extra deposit but I didn't even need to go there. If you look like a good renter and you're promising to cover the costs of any damage that occurs due to your pets, you ought to be able to find a landlord who will want you.
Regarding your anxiety about losing your job/stability etc, you need to have an emergency fund that will cover your expenses including rent or mortgage, renters/homeowners' insurance premiums, and so forth for whatever number of months you think is conservatively reasonable for finding a new job (most people do 3-6 months). That's whether you buy a house or not, but if you don't have an emergency fund you are not ready to buy a house.
posted by treehorn+bunny at 10:35 AM on December 30, 2013 [1 favorite]
I have enjoyed being a homeowner, but it's not for everyone. I agree with this statement above. Don't buy a home just because you feel like it's the socially acceptable thing to do, and buying a home just to get an additional dog will not be worth it. Look for a non-standard rental situation that will suit your needs.
Look at it this way - landlords just want their properties to be in good condition when you leave. That's why they have rules about pets. Enough money and trust can solve this problem. The house I'm renting right now advertised as "no pets", but since I was clearly going to be a good renter with a reliable job and income source, a good credit history, etc., I was able to negotiate two cats. I just looked at the house first and filled out a rental application so that the landlords liked the idea of me, then said "OK, I'll take it but my two cats have to come along." I was prepared to offer extra deposit but I didn't even need to go there. If you look like a good renter and you're promising to cover the costs of any damage that occurs due to your pets, you ought to be able to find a landlord who will want you.
Regarding your anxiety about losing your job/stability etc, you need to have an emergency fund that will cover your expenses including rent or mortgage, renters/homeowners' insurance premiums, and so forth for whatever number of months you think is conservatively reasonable for finding a new job (most people do 3-6 months). That's whether you buy a house or not, but if you don't have an emergency fund you are not ready to buy a house.
posted by treehorn+bunny at 10:35 AM on December 30, 2013 [1 favorite]
i would be leery of restricting the search to condos and townhomes due to the extra layer of government they have, the HOA, which can be an adversary unless you take it over, like i did once. this is particularly true if you're bringing animals in there.
posted by bruce at 10:36 AM on December 30, 2013 [1 favorite]
posted by bruce at 10:36 AM on December 30, 2013 [1 favorite]
I agree with bruce and Ruthless Bunny about HOAs. They are the worst. Not only can they impose many rules about things like pets, they can severely limit your home decoration options too! Be very cautious about this. My last HOA forbid any type of pet aside from fish, even a rodent in a cage, although I have no idea how they would enforce this. If there are condo fees be sure to ask if there have been any recent assessments or if any are planned, and review recent HOA budgets. The assessments are used to do renovations or improvements of common areas.
posted by treehorn+bunny at 10:40 AM on December 30, 2013
posted by treehorn+bunny at 10:40 AM on December 30, 2013
If you can't do a standalone house, you're better off renting - especially in still buoyant Vancouver real estate market. As I understand it, houses are far more fungible. And, as many have pointed out, the HOA is going to be an even bigger barrier to pets than a landlord. And your rental market is still quite a bit more favorable than buying, as I understand it.
I'd like to do the same for similar reasons in Seattle, but I don't see the case as compelling, even though a single family would be in reach, most home repair and improvement work is at least somewhat appealing to me, and renting is substantially less favorable.
posted by wotsac at 10:50 AM on December 30, 2013
I'd like to do the same for similar reasons in Seattle, but I don't see the case as compelling, even though a single family would be in reach, most home repair and improvement work is at least somewhat appealing to me, and renting is substantially less favorable.
posted by wotsac at 10:50 AM on December 30, 2013
Best answer: I swear I could have written this 3.5 years ago.
If you have enough for a decent down payment, can recover your savings (relatively) painlessly (albeit this takes time) and have enough emergency savings, and have done all the calculations and research then go for it. Assume worst-case scenario and don't forget to add in all the fees (PMI, taxes, condo fee, etc.) The only time I have ever physically SHOOK when signing something was making out my down payment check. Ha. I'm so glad I did though!
As a single Thirtysomething who now proudly owns a 3.5 year old 3 bed/1 bath condo in a major metropolitan area, it's not so bad. I'm not extraordinarily handy and have managed to survive. I even got a dog!
The number one thing I learned through this: property acqusition is to be done ruthlessly.
Here's a few other things which may or may not help:
- Check your emotions. This IS the time to get factual and nerdy. Read about the housing market in your area. Consider buying in a cheaper section of town that is close to amenities (e.g. public transport, shops/bars, highway access, etc.) and has all the things you want, versus in a more popular area that may not have everything you want at the same price point. What's cheap now could be the "hot spot" in a few years. This is what happened to me and my property value shot up. Go for the 30-year fixed rate mortgage.
- Check your emotions. Make spreadsheets! Get all up on Excel and make out a list of everything you want in a place. Everything! As you start looking at potential places, populate that sucker. Use it to weed places out. Get a buyer's agent (a real estate agent who you should not have to pay a fee for who will lobby for you). Send that person your spreadsheet and discuss "must haves" versus "nice to haves". Be brutally honest. Comb the MLS together. Keep copies of the listings that you do look at as well as any notes in Evernote.
- Check your emotions. Be patient. I looked at 13 different places, put a strong offer on one place which was accepted and then recinded when I found out that closing the 3-unit condo was at a stalemate because I had a private loan and the downstairs folks had a FHA loan (zoning mandated at the time that only one FHA loan could be present) but it needed to have greater than 50% owner occupancy rate to close and because neither of us had closed it wouldn't go through until we found a third. Bummer! Thank goodness this happened though because right around that time we got 8 inches of rain and the unit flooded through the skylight. Dodged a bullet there! But then I found my current place. On a hill. That is dry as a bone.
- Check your emotions. When looking at places, IGNORE pretty paint jobs, pretty countertops, pretty light fixtures, pretty window coverings and any other crap that the seller's agent will try to sell you on - because, you know, you're a single, young Thirtysomething woman. This is such a load of horseshit, but they really will do it. When this happened to me, I started rapid firing questions about what type of roof there was, when it was installed; same thing with the boiler and goddamn it, how much was that condo fee again!? Look in the basement at wiring and does the basement have a back-up plan should it flood? Get up on the roof if you can and take a peek. Look at the appliances in the kitchen, bathroom, washer/dryer. How old are the windows? Basically, look at everything that is expensive that could possibly break and make sure it's in good/newish/well-maintained condition. Something will break, and it will be expensive.
- Be a miser. Open a savings account and deposit a small amount each month (I think mine is $200). This will be your "Fix It Fund". When that Somethine does break, you won't have to worry about figuring out where the heck to find the cash. My Something to break was of course, my air conditioning system. My "Fix It Fund" was able to cover the $700 HVAC repair dude.
- Check your emotions. Found a place? Awesome! DON'T CHEAP OUT ON THE HOME INSPECTION. I cannot say this enough. I found the most eagle-eyed, nerdy, detail-oriented one I could find and let him have at it. A GOOD home inspection is worth it's weight in gold. Take the day off if you can and follow them around - you can seriously learn a lot about home maintenance from these folks. Have the sellers fix any major findings before you close and make sure they followed through with it during your walk-through.
- Be a miser. Know what are mandatory costs for closing and what are not mandatory and decide whether you want to spend the extra money or not. You can save a bundle of money by researching what all those fees really are. My rule of thumb is that it's always better to overestimate the amount you think you will be spending.
- Check your emotions AND be a miser. Do not be nice in negotiating a final price with the seller. Do not be nice in negotiating any additional amenities with the seller. If you want something, ask for it. I ended up having the seller throw in their wired surround sound system, two flat panel tvs, a mirror and all the window coverings (that stuff gets EXPENSIVE and they had nice taste!) and they said yes even though *I* thought I was being ridiculous!
It can seem super-daunting but it's actually a fun process if you've done your homework. Just relax and remind yourself that you're not going to be broke, you're going to be investing. Once a few months go by of mortgage payments you will feel a lot more secure about it all and the anxiety goes away, trust me.
PS. When you do adopt that dog, get a rescue dog! I got one too and smugly signed his papers knowing I was the homeowner and he just rocks.
posted by floweredfish at 11:16 AM on December 30, 2013 [14 favorites]
If you have enough for a decent down payment, can recover your savings (relatively) painlessly (albeit this takes time) and have enough emergency savings, and have done all the calculations and research then go for it. Assume worst-case scenario and don't forget to add in all the fees (PMI, taxes, condo fee, etc.) The only time I have ever physically SHOOK when signing something was making out my down payment check. Ha. I'm so glad I did though!
As a single Thirtysomething who now proudly owns a 3.5 year old 3 bed/1 bath condo in a major metropolitan area, it's not so bad. I'm not extraordinarily handy and have managed to survive. I even got a dog!
The number one thing I learned through this: property acqusition is to be done ruthlessly.
Here's a few other things which may or may not help:
- Check your emotions. This IS the time to get factual and nerdy. Read about the housing market in your area. Consider buying in a cheaper section of town that is close to amenities (e.g. public transport, shops/bars, highway access, etc.) and has all the things you want, versus in a more popular area that may not have everything you want at the same price point. What's cheap now could be the "hot spot" in a few years. This is what happened to me and my property value shot up. Go for the 30-year fixed rate mortgage.
- Check your emotions. Make spreadsheets! Get all up on Excel and make out a list of everything you want in a place. Everything! As you start looking at potential places, populate that sucker. Use it to weed places out. Get a buyer's agent (a real estate agent who you should not have to pay a fee for who will lobby for you). Send that person your spreadsheet and discuss "must haves" versus "nice to haves". Be brutally honest. Comb the MLS together. Keep copies of the listings that you do look at as well as any notes in Evernote.
- Check your emotions. Be patient. I looked at 13 different places, put a strong offer on one place which was accepted and then recinded when I found out that closing the 3-unit condo was at a stalemate because I had a private loan and the downstairs folks had a FHA loan (zoning mandated at the time that only one FHA loan could be present) but it needed to have greater than 50% owner occupancy rate to close and because neither of us had closed it wouldn't go through until we found a third. Bummer! Thank goodness this happened though because right around that time we got 8 inches of rain and the unit flooded through the skylight. Dodged a bullet there! But then I found my current place. On a hill. That is dry as a bone.
- Check your emotions. When looking at places, IGNORE pretty paint jobs, pretty countertops, pretty light fixtures, pretty window coverings and any other crap that the seller's agent will try to sell you on - because, you know, you're a single, young Thirtysomething woman. This is such a load of horseshit, but they really will do it. When this happened to me, I started rapid firing questions about what type of roof there was, when it was installed; same thing with the boiler and goddamn it, how much was that condo fee again!? Look in the basement at wiring and does the basement have a back-up plan should it flood? Get up on the roof if you can and take a peek. Look at the appliances in the kitchen, bathroom, washer/dryer. How old are the windows? Basically, look at everything that is expensive that could possibly break and make sure it's in good/newish/well-maintained condition. Something will break, and it will be expensive.
- Be a miser. Open a savings account and deposit a small amount each month (I think mine is $200). This will be your "Fix It Fund". When that Somethine does break, you won't have to worry about figuring out where the heck to find the cash. My Something to break was of course, my air conditioning system. My "Fix It Fund" was able to cover the $700 HVAC repair dude.
- Check your emotions. Found a place? Awesome! DON'T CHEAP OUT ON THE HOME INSPECTION. I cannot say this enough. I found the most eagle-eyed, nerdy, detail-oriented one I could find and let him have at it. A GOOD home inspection is worth it's weight in gold. Take the day off if you can and follow them around - you can seriously learn a lot about home maintenance from these folks. Have the sellers fix any major findings before you close and make sure they followed through with it during your walk-through.
- Be a miser. Know what are mandatory costs for closing and what are not mandatory and decide whether you want to spend the extra money or not. You can save a bundle of money by researching what all those fees really are. My rule of thumb is that it's always better to overestimate the amount you think you will be spending.
- Check your emotions AND be a miser. Do not be nice in negotiating a final price with the seller. Do not be nice in negotiating any additional amenities with the seller. If you want something, ask for it. I ended up having the seller throw in their wired surround sound system, two flat panel tvs, a mirror and all the window coverings (that stuff gets EXPENSIVE and they had nice taste!) and they said yes even though *I* thought I was being ridiculous!
It can seem super-daunting but it's actually a fun process if you've done your homework. Just relax and remind yourself that you're not going to be broke, you're going to be investing. Once a few months go by of mortgage payments you will feel a lot more secure about it all and the anxiety goes away, trust me.
PS. When you do adopt that dog, get a rescue dog! I got one too and smugly signed his papers knowing I was the homeowner and he just rocks.
posted by floweredfish at 11:16 AM on December 30, 2013 [14 favorites]
One thing to consider if you're planning on getting a dog - having a yard or some small outdoor space that the dog can do it's business in is sooooooo helpful, especially if you don't have someone to share the dog-walking with. Even though my fiance and I split the dog duties, I still loathe having to always leash them up and talk them for a walk. I miss having a back yard where I could let them out, especially for that last night-time walk! I am not sure what your options are for condos and such, but I would personally not *buy* a place without a yard.
posted by radioamy at 11:44 AM on December 30, 2013
posted by radioamy at 11:44 AM on December 30, 2013
You can rent in Vancouver with a dog, it just takes some creativity.
The place I am renting now I found in the classified ads in the Vancouver Province (I know!). My neighbour found a place that accepted her dog by walking around her desired neighbourhood and inquiring at places displaying "for rent" signs. The common factor is that we have old fashioned landlords that are happy renting to good people with stable family lives and jobs, regardless of the pet situation. More modern landlords advertising on Craigslist or managing large properties are less forgiving.
Vancouver housing prices are insane. To get a house you also need to consider the costs of your vehicle, gasoline, and a commute. I will assume you are not a millionaire so you would be buying in the sticks. You may have a dog but if you have to commute two hours a day you might not have time to tend it properly.
I suggest you get more creative in finding rentals and you might be able to achieve your pet owning goals. Owning in Vancouver is just ridiculous and I can't recommend it to anybody right now.
posted by crazycanuck at 11:49 AM on December 30, 2013
The place I am renting now I found in the classified ads in the Vancouver Province (I know!). My neighbour found a place that accepted her dog by walking around her desired neighbourhood and inquiring at places displaying "for rent" signs. The common factor is that we have old fashioned landlords that are happy renting to good people with stable family lives and jobs, regardless of the pet situation. More modern landlords advertising on Craigslist or managing large properties are less forgiving.
Vancouver housing prices are insane. To get a house you also need to consider the costs of your vehicle, gasoline, and a commute. I will assume you are not a millionaire so you would be buying in the sticks. You may have a dog but if you have to commute two hours a day you might not have time to tend it properly.
I suggest you get more creative in finding rentals and you might be able to achieve your pet owning goals. Owning in Vancouver is just ridiculous and I can't recommend it to anybody right now.
posted by crazycanuck at 11:49 AM on December 30, 2013
This is a bit tangential to the OP's question, but Ruthless Bunny's comments about how amortization works are exaggerated. How quickly you start to pay off principal depends strongly on your interest rate. If you have a 30-year loan at 4.5%, over a quarter of the first payment goes to principal. (That fraction then increases with each successive payment, as RB said.)
You can figure this stuff out with an amortization calculator.
posted by aws17576 at 12:02 PM on December 30, 2013
You can figure this stuff out with an amortization calculator.
posted by aws17576 at 12:02 PM on December 30, 2013
I'm a single woman in my late 30s and bought a 100+ year-old house two years ago. The process was--no joke--probably one of the most horrible and corrupt things I've ever been though in my life (like, I was blown away by how terrible it was), and yet I am so much better off owning than I was renting (emotionally, mentally, financially). I bought pretty much for emotional reasons: I just woke up one day and COULD. NOT. DEAL. with landlords anymore. It was like, how dare anyone tell me how many cats I can have, or that they need to be able to access my living space. The tipping point was my last landlord wanting to sell the building I was living in and needing to show my apartment. This was totally reasonable of them, I just didn't want to do it anymore. As crazy as this sounds, I really felt like I couldn't even cope with it: I would come home to notices that they needed to get in and I would panic and cry.
Some things to think about, though:
--I bought at (probably) the bottom of the market, in a transitional neighborhood in a fairly affordable US city. My mortgage payment, including taxes and insurance, is $350 LESS than what I was paying for a 1-bedroom apartment.
--I actually didn't deduct my mortgage interest last year because itemizing still would have been less than the standard deduction.
--I never would have bought a condo or townhouse, or even a detached house that has an HOA. I told my realtor not to show me anything that had an HOA. Too much like an apartment.
--What if you lose your job? Well, if I'd lost my job before, I would have still had to pay rent, which was more.
--I actually enjoy (for the most part) yardwork and home maintenance. It's one of the few ways I take care of myself. I also don't mind living in the house while it still needs work. Many people would have been scared off by my kitchen, for example, and I've had to paint every single interior room and still have one room to go, even having been here two years.
--I think the above posts telling you not to be emotional about it are unrealistic. There's a huge emotional component to buying a house for most people.
posted by Violet Hour at 1:14 PM on December 30, 2013 [4 favorites]
Some things to think about, though:
--I bought at (probably) the bottom of the market, in a transitional neighborhood in a fairly affordable US city. My mortgage payment, including taxes and insurance, is $350 LESS than what I was paying for a 1-bedroom apartment.
--I actually didn't deduct my mortgage interest last year because itemizing still would have been less than the standard deduction.
--I never would have bought a condo or townhouse, or even a detached house that has an HOA. I told my realtor not to show me anything that had an HOA. Too much like an apartment.
--What if you lose your job? Well, if I'd lost my job before, I would have still had to pay rent, which was more.
--I actually enjoy (for the most part) yardwork and home maintenance. It's one of the few ways I take care of myself. I also don't mind living in the house while it still needs work. Many people would have been scared off by my kitchen, for example, and I've had to paint every single interior room and still have one room to go, even having been here two years.
--I think the above posts telling you not to be emotional about it are unrealistic. There's a huge emotional component to buying a house for most people.
posted by Violet Hour at 1:14 PM on December 30, 2013 [4 favorites]
Here's what I'd say, even independent of the financial stuff: How much do you think you'd enjoy being a homeowner? Because it's a lifestyle change as much as it is a financial change. So all those things you'd call maintenance or the landlord for are now on you. Small stuff, like the doorknob fell off or the dishwasher is making a weird noise it wasn't making before. Big stuff, like the hot water heater just exploded. Think of all the stuff that could go wrong or that has gone wrong in your apartments or rental properties.
I'll just use my place as an example: The roof developed some rot and started leaking water, which we found out when the ceiling on our porch collapsed in a pile of insulation and drywall. All WE had to do was call the office and let them deal with the two week process of finding both a roof guy and a drywall guy, letting them both come out and inspect the damage, then letting them come out and do the work. I mean, I opened the door for the drywall guy's crew one day but that's pretty much all I had to do.
So, could you do that? Sure. Honestly, it's like most things, if you google the right thing, you'll find out how to do it or you can throw money around until someone comes out and fixes it. My mom's in her 60s and she manages to keep her house up fine, it's not difficult, it's just a hassle. Is that something you'd be comfortable dealing with? Assume for most everything you can either do it yourself with a few trips to Home Depot and/or Google or you can hire someone to do it for you and pay a lot but it'll get done. Do you want to manage that kind of process or get into like home repair and yard work?
Because part of the reason I haven't bought a house is the idea of spending my weekends at Home Depot dealing with that crap is the worst thing I can think of. But I know a lot of people who really enjoy it. One of my friends just bought a house and is already plotting like a wholesale renovation of literally everything inside it and having a blast doing so.
So yeah, make sure the numbers work, but make sure you WANT to be a homeowner.
posted by Ghostride The Whip at 1:29 PM on December 30, 2013
I'll just use my place as an example: The roof developed some rot and started leaking water, which we found out when the ceiling on our porch collapsed in a pile of insulation and drywall. All WE had to do was call the office and let them deal with the two week process of finding both a roof guy and a drywall guy, letting them both come out and inspect the damage, then letting them come out and do the work. I mean, I opened the door for the drywall guy's crew one day but that's pretty much all I had to do.
So, could you do that? Sure. Honestly, it's like most things, if you google the right thing, you'll find out how to do it or you can throw money around until someone comes out and fixes it. My mom's in her 60s and she manages to keep her house up fine, it's not difficult, it's just a hassle. Is that something you'd be comfortable dealing with? Assume for most everything you can either do it yourself with a few trips to Home Depot and/or Google or you can hire someone to do it for you and pay a lot but it'll get done. Do you want to manage that kind of process or get into like home repair and yard work?
Because part of the reason I haven't bought a house is the idea of spending my weekends at Home Depot dealing with that crap is the worst thing I can think of. But I know a lot of people who really enjoy it. One of my friends just bought a house and is already plotting like a wholesale renovation of literally everything inside it and having a blast doing so.
So yeah, make sure the numbers work, but make sure you WANT to be a homeowner.
posted by Ghostride The Whip at 1:29 PM on December 30, 2013
Small point, but also check your city's pet limits. Mine limits each homeowner to 3 cats and/or dogs.
posted by cecic at 1:55 PM on December 30, 2013
posted by cecic at 1:55 PM on December 30, 2013
Response by poster: Thanks all -- you've given me a lot to think about in terms of other ideas (renting a real house -- that hadn't even occurred to me!), keeping emotions in check, and some more food for thought in terms of whether i should be doing this at all. It would be so much easier if this market weren't so insane!
posted by cgg at 5:41 PM on December 30, 2013
posted by cgg at 5:41 PM on December 30, 2013
I bought a house specifically so I could have pets. I'm in Australia, but our pet rules in apartments and townhouses are pretty much what you describe, and even if you rent a whole house, the default leases always specify no pets, and it's hard to get landlords to agree to change it.
The issue with renting (here at least) is that no one expects you to rent long term. When we were renting, we had to move on average every two years, because the landlord would sell the place, or would decide to move family into it, or because it would get to a point of unliveability with a landlord refusing to make necessary repairs (hello collapsing bedroom ceiling thanks to repeated water damage).
So it's not a matter of looking far and wide to find ONE place that allows pets, but to continue to do so every time you have to move. It's a pain in the ass.
I am absolutely not sorry I bought, even though we probably won't end up staying here long enough to make it financially better than renting was. (It's pretty much a wash, I think.) My cat is worth it :)
But we did end up having to buy a house (well, duplex, with no board). The problem with apartments and townhouses is that the board would not rule on whether they would allow your pets until after you had bought, and then you could put in an application and they would decide. So it's possible that you could buy a place and then find out they disallowed pets.
Anyway, those aspects of renting and buying might be totally different for you in Canada, but I'm just mentioning them in case they aren't, and in case they are things you haven't thought about.
posted by lollusc at 6:08 PM on December 30, 2013
The issue with renting (here at least) is that no one expects you to rent long term. When we were renting, we had to move on average every two years, because the landlord would sell the place, or would decide to move family into it, or because it would get to a point of unliveability with a landlord refusing to make necessary repairs (hello collapsing bedroom ceiling thanks to repeated water damage).
So it's not a matter of looking far and wide to find ONE place that allows pets, but to continue to do so every time you have to move. It's a pain in the ass.
I am absolutely not sorry I bought, even though we probably won't end up staying here long enough to make it financially better than renting was. (It's pretty much a wash, I think.) My cat is worth it :)
But we did end up having to buy a house (well, duplex, with no board). The problem with apartments and townhouses is that the board would not rule on whether they would allow your pets until after you had bought, and then you could put in an application and they would decide. So it's possible that you could buy a place and then find out they disallowed pets.
Anyway, those aspects of renting and buying might be totally different for you in Canada, but I'm just mentioning them in case they aren't, and in case they are things you haven't thought about.
posted by lollusc at 6:08 PM on December 30, 2013
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posted by mmf at 9:09 AM on December 30, 2013 [1 favorite]