You made the decision to buy a new home. You were excited. You had energy, you imagined you would be in your dream home by now but you aren’t. YOU CAN’T FIND A HOUSE! What to do when you have looked and looked and you can’t find anything you like? Our market has shifted slightly and inventory is on a decline making it a bit of a seller’s market. If you are frustrated and ready to give up; DON’T! Your home is out here. It may be just around the corner. Every homeowner will tell you there isn’t a perfect home but there are homes that come close. This is your home so you should get what you want. The trick to be realistic about what you are looking for.
As a REALTOR I feel your pain. It can be a very deflating experience to not find your home right away. If you are at the point of giving up, it is time to regroup and take a look at your criteria again. Sit down with your REALTOR and go over your criteria. Separate your want list into “MUST HAVE”, “CAN LIVE WITHOUT” and “DON’T NEED BUT WOULD BE NICE.”
Set up an appointment with your financial adviser to see if there are any creative ways to increase your funding. See if you can tap into extended RRSP programs for first time home buyers. Under this program, a home buyer can tap into their RRSP for an interest free loan of up to $20,000. This money is to be repaid in annual installments up to 15 years. Your adviser may be able to get creative with your mortgage by adjusting your options. Perhaps considering a 5,7, or 10 year adjustable rate mortgage rather than a fixed. Perhaps you have a family member that could help. A study in 2017 from HSBC found that more than a third of Canadians own a home but nearly two-fifths of them had helps from parents to get into the market.
Next, take a look at your price point. Can you go a little over your budget to get what you want in your home? If not, then perhaps it’s time to consider looking in a different neighbourhood or if your “MUST HAVE” list is long and not negotiable, then perhaps looking at a lower price point city. Commuting can be a way of getting the home you want for the price you can afford. For example, the average price for a detached home in Kitchener in June 2018 is $485,000. Compared to Cambridge at $460,000. Sometimes looking 10-15 minutes away from your target area can open up quiet a few options.
Please do remember that you can negotiate the price of a home. Our 2017 market was difficult for negotiating. However, the market has become more hospitable for negotiations on price. If you find the right house, don’t be afraid to put in an offer. If you have been putting in offers but nothing has been accepted, then it is time to have a heart to heart talk with your REALTOR. Together you can determine the problem so that when you do find the right home you can move forward with a strong offer.
If it comes down to just price, then it’s time to be realistic.
If you have been by-passing homes that need renovations, it may be time to reconsider. If a home has all the right main features that you desire, such as 4 bedrooms, 2 baths and a large lot, but the kitchen and baths are outdated. Ask yourself “could I live with the kitchen and bath for a few years until I have the funds to renovate?” You can always try tackling some of the renovations yourself!
Can you live without that master ensuite if it’s the only piece missing from an otherwise “perfect” property? Would you consider one less bathroom if there was a rough-in in the basement? What about living on a busy street if the backyard was large and quiet? When you look at a home, you have to think BIG PICTURE. What you see now won’t be the finished product. With some creative thinking a minus might turn into a financial plus.
Confirm with your REALTOR that you are being notified ASAP when a home matching your criteria comes on the market. Again, go over you criteria to ensure that a small “want” is not excluding you from a large portion of valuable homes.
Is there a possibility of rental income? If you are looking at a bungalow with a separate entrance, there may be a chance you could turn the home into a duplex. Living on the main floor and renting out the basement is a great way to help pay down your mortgage and bring in some additional revenue. CMHC does allow 100% of the rental income from a legal secondary suite to be used when qualifying for a mortgage. There are requirements that have to be met however. For new units, a market rent appraisal can be accepted if an appropriate vacancy rate has been applied to the estimated rental income. You will have to live in your home you purchase for over one year. Talk to your financial adviser or REALTOR to see if you qualify.
The other variable will be how long you intend to live in your home. If you are a first time home buyer and this home will be a starter, then it may be wise to analyze the property for the best rate of return on your investment. If past sales and resale value is high, then the property may be a good investment even though it doesn’t match your exact criteria. On the other hand, if you’re looking to live in the home long term, you may want to be more selective when looking at properties.
The best advice is to keep looking and keep an open mind. Don’t disregard a home right away. You may be surprised! Years ago, I had a young couple flat out refuse to view a home because of the first impression of the curb appeal. I was able to convince them to just take a look. How surprised were they when we entered into a gorgeous wood home with cathedral ceilings, stone fireplace and hardwood floors. The couple fell in love with the home and put an offer in on the spot. You never know until you try. It may be overwhelming and tiring at times, but you will be living in your home for many years. Putting in the work now can save you a great deal later.