1-10 Home Buyers Cheat Sheet

So, You've read all the posts so far...

Or you were lazy and just want the Coles notes version.

This is the cheat sheet!

Being a computer nerd, I will eventually be making something called a Critical Path Chart, as well as a Visio Diagram for process flow. For the non nerds, here's a quick itemized list, with links to further details from posts earlier in this blog.


Research and Prep:

1. Decide if home ownership is right for you.
2. Do some self Budgeting, determine a monthly mortgage payment that is approx 60% of your "spare" income (40% is for Utilities, maintenance, Taxes, Insurance, and savings)
3. Contact a Realtor in the area you want to buy.
4. Have Coffee with Realtor (hopefully his/her treat ;-) ) To discuss the process of finding a house
5. Contact a "Mortgage Guy" and your bank, "Investments guy" for Down-payment advice, mortgage advice and pre-approval
6. Make a list of things you want in your future house
7. Go See some houses in your price range (3 is recommended. Open houses are fine.)
8. Have your dreams crushed because you can't afford a dream house you stumbled into by accident
9. Build a REALISTIC list of things you need in a future house
10. Get a few (3,000-6,000) ready in case you need to jump on a property
11. Obtain pre-approval from mortgage guy
12. You are now ready to "jump" at the RIGHT house
13. Look at some more houses
14. Make an intelligent offer on a house with your three critical conditions
15. Enter "the tango" of offers and counter offers

It's Go Time (Example using 90 days to closing/posession date)

1. Accept an offer or counter offer
2. Call Lawyer, e-mail or fax Signed offer
3. Give your Realtor the Deposit (Bank draft/certified Cheque) (a few thousand dollars or more, depending on value/neighborhood)
4. Call Building inspector. Book ASAP. (Inspection within the next day or two is ideal)

Within a week of accepting offer: (T-Minus ~85 Days) :

1. Get Building inspection
2. Confirm Financing
3. Waive Conditions, OR go back to negotiation table if something isn't right. (go back to step 15)
4. Check with lawyer, Make sure they have mortgage details from mortgage guy, Purchase details from Realtor.
5. Book Moving Truck/service
6. Give 2 Months notice to current landlord
7. Book Moving elevator (if required)
8. Look into Utilities at new place, Create new accounts for utilites you don't currently use
9. 2 months prior to closing, Call Existing utilities if you have any, to cancel accounts

Approx 1-2 Months from Closing Date:

1. Start packing
2. Ask to see the house to take measurements for your couches. (make sure they fit down stairs) (Also to make sure they're taking care of your new house)
3. At least 1 month ahead, Inform insurance companies of move for Auto rates
4. Obtain House insurance effective Move in Date. (don't forget any jewelry, expensive bicycles, etc)

Approx 3-4 Weeks before Closing Date:

1. 2 Weeks prior to Closing, Chase up lawyer. Get a status update. Most of the lawyer stuff happens now
2. Get Down Payment Bank Draft, Run to Lawyer with it.
3. Double-check with utilities that everything is honkeydorey. (Installation dates, billing, etc.)

Less than 1 Week before Closing Date:

1. Go into lawyers office a few days prior to closing to sign off all the ridiculous amount of paperwork
2. Create your "moving kit"  Generally paper towel, screwdrivers, Masking Tape, Styrofoam cups, Paper Plates, Plastic cutlery. Air Mattress, Sleeping Bag, Pillow, Various Cleaning supplies, Vacuum cleaner/Mops. (This allows you to clean before furniture gets in, and it also allows you to eat/drink when you order pizza because they're no food in the new place)

Closing Day! 

(...Assuming you actually got sleep last night and some energy, now is an appropriate time to do the happy dance)

1. Get called from the lawyer late afternoon, and run there, as fast as you can, to excitedly pick up the keys to your new house. Don't get a speeding ticket.
2. Speed to your new house.(Don't get ANOTHER speeding ticket)
3. Take a corny photo of yourselves standing beside the SOLD sign. 
4. Promptly post above Photo to Facebook. (optional)
5. Get inside and do a mini inspection. Make sure all the appliances included are working, and that there is no substantial damage that was clearly not there during inspections/viewings.
6. Turn on the fridge if off. Insert Beer. It'll be needed on moving day. (after the move, of course... you want your stuff INTACT.)
7. Probably spend the night Cleaning. Crash at 3:30am on air mattress, wake up, late for work and speed there. (they'll understand...)

The following 3 days:

1. Drop off/mail things like Cable modems, PVR's, Sat. equipment of your old house to the appropriate provider
2. Change your addresses on your license, Health card, Outdoors card, Transferred utilities, Visa/Bank items, Magazines, etc.
3. Internet/TV installation By Utilities. Be home for this as they screw up EVERYTHING!!!
4. You might want to look at mail forwarding from your old address. I think its about 100 bucks for a year. (didn't do this myself)
5. Final bits and pieces and packing for Moving. Bring your breakables in your own car. 
6. Also, Bringing Microwave and some alphaghettis/Frozen dinners may be a good idea. Eating McDonald's or Pizza 4 days in a row is awesome, but horrible. (Thankfully it takes weeks for scurvy to set in)

There will be many more posts!  I've covered the very basics of buying a home... But Owning a home is a whole other world of hurt.   (I meant to type joy...  really.)

I will also be posting about the smaller details of buying a house, and things to consider. (Like Taxes... Insurance... Age of houses...)

If you find this blog informative, Please let me know in the comments!  It takes a TON of time to write.

Now I will be also posting about my personal experiences, and eventually this will turn into a DIY First Time Homeowner's Blog. A lot of life lessons have already been taught, so the posts will be frequent. I think it'll be at least a month before I convert to weekly posts instead of every other day posts!

Regarding the ads, I've screened them to only show ones related to my content, so there will be some useful ads Mortgage Calculators, Banks, inspectors, Realtors, etc. Don't be afraid to click on them. Right now I've made a whopping 6 dollars for over 15 hours of writing time... which equates to 40 cents an hour. *sadface*

Its a labour of love!

Also, if there are requests or questions, I'll either answer them in the comments, or if the question is "loaded" enough, it'll feature its own blog posting!

Hopefully I make a few regular readers!

The next post:  How to make your move go smoothly.

10. Closing Costs and Legal Stuff

So, at this point, you've accepted the offer, you've waived your conditions and its a done deal.

The Lawyer and your Realtor handles Most of the legwork.

There are a few points in which you have to hand over hard earned Moola:

1. Offer Acceptance - Deposit
2. Building Inspection
3. Lawyers Fees & Adjustments
4. Utility Hookups (Deposits)

1. Deposit
$2000-$6,000  ($10,000 max)

When an offer is accepted, there is a deposit. This surprised me, and nobody told me about this. Generally this deposit is a few grand. Mine was 3,000 bucks. Depending on the value of your house, and how affluent your new neighborhood is. This Deposit can vary from 1,500 to 10,000 bucks. (wide range, I know... but good news! It is considered part of your Down Payment!)

The Deposit is usually required within 24 hours of the offer being accepted. Because it caught me off guard, it caused me a lot of stress - I don't typically have Three big ones sitting around that I can access instantly. In Hamilton, deposits are generally cheaper, but I know in Toronto  they're usually a bit more. Ask your Realtor what you should have on hand.

We dropped off a bank draft to our Realtor, and he ran it over to their realtor who held onto it until closing I believe. If you invoke one of your conditions and walk away from the deal, you get this bank draft back. It's only "cashed" once you take possession.


2. Building Inspections
$350-450 (and higher, for large houses)

These are required by ME. $400ish. Don't even think about skipping this. Don't get your buddy or dad to do it (unless he's VERY qualified and does it for a living) Just TRUST me. Its 400 bucks, and in the grand scheme of things, you won't really notice that expenditure. It saved my bacon, It could save yours. Most Inspectors will take a personal cheque, due at the end of the inspection. There's typically tax on this. You might be able to get a cash discount, but I'd be slightly wary of those offering a cash price.


3. Lawyers fees and adjustments
1,250 - 2,000 + Adjustments (Adjustments  can be 0-$3500, sometimes included in mortgage amount)
So the lawyer does a lot of work, and also seems like very little work. All the paperwork is stupidly complicated and wordy, and when you go to sign all the paperwork (probably a few days before closing) you better bring a hot/cold pack for your hand...  - SO MANY SIGNATURES!

The lawyer will charge you for retarded things like staples, photocopies, Faxes, Mail/postage, paper, etc... On TOP of their hourly/flat rate which you hopefully negotiated before hiring them.  My lawyer was awesome because we did almost everything via scans and e-mails. I'm pretty sure this saved me some money and it definitely did save me time. Try and find a "younger" lawyer as they are generally more tech savvy. Old school ones mean a lot of driving and delivering of documents which is a pain.

The Important things the lawyer does:

• Makes sure there aren't any Liens (debts) against your house. (Taxes, Municipal utilities, Work orders etc)
• Makes sure that you're actually getting what you think you're getting. (my property is actually two "lots" so our lawyer made sure we were buying both of them. It also cost us 150 bucks more because they had to get two detailed maps from the city of Hamilton of the plots to ensure things were proper.
• Handles the money. You give your massive down payment cheque to them. They also deal with your Mortgage company to secure the Draft. They also deliver it to the sellers lawyer. (I think electronically) 
• Will handle any major issues if there are any.
• Title Insurance - Basically, if anything goes horribly wrong, title insurance will cover you. This allows the lawyer to spend less time digging up all the dirt on your house, and more time creating paperwork for you to sign ;-). Title insurance basically covers you from any hidden stuff arising from the grave and biting you in the ass. (Heres a government PDF that explains it in more detail)
• Adjustments - If the current owners have paid the full years taxes, you'll have to pay them back for the unused portion. This also includes things like Hot water tank/furnace/A/C rentals if any.
• Answering questions about Process (hopefully I've helped with this, because a lawyer is an expensive person to ask questions to!

Adjustment fees can vary greatly, particularly at the beginning of the year if the owners have paid their taxes up front, you'll have to pay them back. The good  news is that the lawyer can usually include this into your mortgage.  That about sums up what the lawyer will ask for!

4. Utilities

$500-$2,000 dollars

2 months (if you can) before you take possession   You should find out what utility companies service the new house. If any are in common with what you are using now, you might be able to save some money on deposits.

You need 2 months because some evil utility companies can require this much notice to cancel an account. If you Cable TV/Internet and are locked in a contract, and they don't service your new area, you'll be in for a heated battle, but will probably have to pay a $200-300 cancellation charge per service ( TV, Internet etc) Sometimes they have a grace policy if you're moving to an area out of their service range. (cross your fingers!)  If you're lucky that they do service your new area, let them know of the closing date so they can kill service to your current residence and move you to your new one.

New Utility Companies

Most utility companies like to have a deposit when dealing with a new customer. This way if you turn out to be a deadbeat, they can cancel your service before you eat through your deposit, keeping them from running in the red. Some will waive or reduce this if you agree to Pre Authorized Billing or direct withdrawal.

My Deposits: 

Horizon (Water and Power) - 370 dollars, collected in 3 payments over first 3 bills. Refunded as credit after 12 months

Reliance (Hot Water Tank) - 35 dollar setup fee

Source Cable (Internet/TV) - 35 dollar setup fee, Zero deposit because I agreed to Pre Authorized payment

Union Gas (Natural gas) - 0 Dollars, No Deposit if you sign up for Equal Payment Plan AND Pre Authorized Payment (otherwise I think $300) 

I didn't have a heck of a lot of closing cost money at hand (my unexpected $3,000 deposit on offer acceptance tied up those funds)  so I opted for the cheapest method of signing up for utilities, although I generally like to pay my bills myself rather than have them take the money directly from my accounts. Alas, because I was caught off guard by earlier costs, it was a necessary evil.

That's it for utilities! 


Now, The only other costs are moving expenses. If you were lucky enough to get a closing date in the middle of the month, you may be able to haggle a local truck rental or moving service down a few bucks to make that easier. End or beginning of the month moves are the busiest time, so make sure to book your truck the second you have finalized the closing date (I.E. accepted offer) I'd budget 200 or more for a 32 foot moving truck (if you have lots of furniture) or if you're moving from your folks place, A 16 footer cube truck/van will do it. If you're still living at home, you might be able to get by with a buddy's pickup truck and a few runs with your own car (for boxes)  When I first moved out, I actually moved a 6 foot Birch Table, 5 chairs and a few boxes in my Mazda3 Sedan! (granted, it took some creative angles, dis-assembly and awkward seat positions... but I did it!)

This post was largely boring, but It was chalked full of information. Hopefully it helps you along!

The next post will be an overall summary (shortened) about the home buying process. If I'm not lazy, I might even have a flowchart of the process. (but we'll see!)

9. The "Walk Away" list

As we developed a list of things we wanted,  after our first home inspection failed, we also developed a list of things that would make us walk away, no questions asked.:

Our "Walk away" list:

1. Mold - Fairly obvious
2. Aluminum Wiring -  This was popular in the mid/late 70's. Its a fire hazard if not correctly installed, and insurance companies HATE it, and force you to get your wires examined periodically. Basically, if an aluminum wire is bent to sharply, it'll fracture slightly inside. It'll start to corrode (aluminum's version of rust) and will eventually become like a toaster element in your wall, and potentially start a fire. Just Google it
3. Knob and Tube Wiring - Again fire hazard, but this is basically un-insulated Wires inside your walls. They're just wrapped around a ceramic disc, nailed into your wall and held tight. Google it as well, but just trust me, its super expensive to replace, and you don't want to tackle this on your first house. If you see it, Run, Don't walk!
4. Dirt Crawlspaces - Just more a personal preference - its an easy way for moisture to get into your house. Tons of houses have these, but if your house is the ONLY one in the hood with one (your building inspector will know) then you should avoid it. odds are there were more serious issues. 
5. Asbestos - Deadly, cancerous insulation. If contained properly, it is OK, but will turn off many buyers when you go to sell. Avoid if at all possible.
6. Leaking Basement - Obvious, and expensive to fix. Precursor to Mold.
7. Electric/Boiler heat - its just bloody expensive to operate, and expensive to replace with a duct system. Also means No Central A/C is possible. For century homes, (old classic beautiful homes) this is super common. Its not a deal breaker for some, but it was for me.
8. Houses where the driveway slopes INTO the garage/house - 9/10 houses will have no problem with this, but my luck would be the one that gets a drain freeze or backup, resulting to a flooded basement. Also, the thought of having some freezing rain on your driveway and not being able to stop as my car plummets through my garage door wasn't appealing. (I actually had a nightmare about this... home hunting does weird things to your sleep...)
9. "Handyman" houses - Some people like to THINK they can fix things. (I might be a bit of a Hippocrite here...) But really just bastardize their entire house.  Replacing a light switch is one thing, but when someone blows out a basement wall on their own, and runs copper pipes on an outside wall that'll freeze and blow up in the winter... You should run. (true story) Not only did they probably not get permits, it could also be a safety hazard if they did their work incorrectly.  When I get to the "DIY home ownership  part of this blog, I'll be showing you that I've done all my research and am doing everything to code or greater. (but even then... its "better" to get it done professionally from a liability standpoint...)

So at this point, you are either Running away from your potential house, Or ready to hunker down and take the next step.

Assuming the financing is in order, and your inspection went well enough... its time to waive your conditions.

Waiving your conditions means that all the conditions of your offer have been met. Those Three conditions I recommended (Financing, Visits, and Inspection) are now satisfied, and you are committing yourself to buy the house.

Once you sign this 1 or 2 page Release form... You're buying the house regardless if you like it or not.

THIS is truly the point of no return, So Go back over everything you know about the house, the costs, whats right and whats wrong. Cost out the repairs

If you're good to go... Congratulations, you're 99.9% committed to buying a house.

Your last hurdle is your lawyers job. (the 0.1%) 

(Your job is to start fretting over where you're going to put that massive Couch you bought last year that fits perfectly in your apartment. It might not fit down the stairs!)

Next post will be Legal stuff and closing costs. (very important, but also kinda boring. I'll try and make it exciting, I promise)

8. House inspection!

So, they Buyer has accepted your offer/Counter offer, you've signed back, and you think its a done deal.

It's not a done deal.

The Financing shouldn't be a problem, you've been pre-approved. Talk to your "mortgage guy/girl" and send him the offer paperwork. Your lawyer will need this too. (more on the lawyer soon, no worries)

Now is a good time to tell your Mortgage guy the details (send him a copy of the most recent offer), so he can get the ball rolling. Its also a good time to inform your lawyer. (more on this, as well as closing costs, on two posts from now.)

You now have your Conditions.

Not sure if you've ever watched Holmes Inspection (with Mike Holmes)... but Honest to God, It's like you're Sherlock Holmes and Watson going through someones home for clues. Its a little bit creepy, but your curiosity gets the better of you as you snoop through someone elses home.

We used Nook n' Cranny Home inspections (twice!) And Darren was Amazing, and I honestly can't put in words how much grief he saved us! If you're in the Hamilton grimsby/Burlington (maybe even oakville) area, He's the man to call.

We "bought" that house after 5 offers/counteroffers just to have the building inspector find a bunch of glaring issues with it that caused us to invoke our inspection condition/clause and walk away. Our Realtor didn't see the issues as a big deal, But It was a tough decision that left Megan Crying, She and I arguing, and me feeling like I had stepped on and killed a 4 year olds' 12 week old puppy. Ultimately, You have to realize that A Steady, Monthly Mortgage payment is one thing, but $10,000 dollars to fix a leaking, moldy basement is another.

Ultimately, I knew Megan was just invested emotionally to getting a house. There would be others, and she would see this (and she did) I "pulled rank" on Megan and walked away from a VERY expensive potential mistake. (She did eventually forgive me... I think.)

(By "pull rank" I pulled the "But I'm the one who's going to have to fix all this, and we're going to have to delay our wedding to afford to fix all this") 

Other than the issues with the house, another thing our inspector did was look at the listing vs. what was actually at the house, to ensure it was accurate. It said Vinyl Roof on the listing - Nope. It had a nearly worn out Shingle roof. No idea where vinyl came from. (vinyl roofs generally are down south, but are not great for cold climates - they get brittle) There was a bathroom fan, at chest height, In the wall of shower!!! (electrical hazard much?) it also said all new windows. Maybe 50% of them were "newer".

And the Mud icing to the cake:  A dirt Crawlspace, which was mud, covered in a tarp held down with bricks. As an asthmatic, This was the last straw.  There was also horrible wiring (main fuse was 15 feet away from the fuse panel... Fuse panel rated for 125 amps, Main fuse rated for 100 amps, and also it was broken with no cutoff switch... just exposed, 100 amp wires asking for someone to kill themselves on...

So really... Just a lot of money to be spent that we didn't have.

Now, Look at the issues he found, vs what we saw in the house:
The house was cute, showed well and looked updated. it had potlights, new carpets, nice hardwood floors, a new fireplace, nice gardens and a beautiful backyard.

The Inspector's job is to look past the pretty clothes, and look at body of the house. When I put it that way, it sounds like a glamours job... But its not. Lots of crawling around in attics, Dank Basements, Hot roofs, electrical hazards. Darren was kind of like the Steve Erwin (Crocodile hunter) of House inspections, Finding all this dangerous and costly stuff you wouldn't have ever dreamed of catching.

He did this VERY well, and what Megan and I couldn't see, He did. He showed me everything I NEEDED to see, even if I really didn't want to. I sat down with him and I told him the price, and I asked his honest recommendation as to if this house was worth it. He said walk, so I did.

Listen to your inspector. They are the only person who are 100% on your side and can always be trusted. You pay them ($350-$450) regardless if you get the house or not, so they have NO ulterior motives to cover anything up. (and for that reason, I'd recommend find your own inspector (or use Darren), rather than one the seller (or even your Realtor) recommends)

Its pretty much mandatory to go with your inspector when he does this. Its not very often you have a super knowledgeable person to go through your house and show you how it works. He'll show you your Furnace  How it works, A/C, things that you should look at replacing fairly soon. Safety items, etc. He'll give you a Report at the end of it all, Prioritizing various issues. The big one for us on the house we bought  was the electrical panel and retaining wall.  After some research, we saw that the panel was 800 bucks to replace, and the retaining wall was owned by the people behind us, so if anything ever happened regarding it, it would be a pain int he ass, but we wouldn't be liable, they would (its a case of "we were here first!")

BEST 350-400 dollars you will ever spend. Trust me.

If a seller refuses your Inspection clause, Walk away. They're hiding something.

So, if your inspector found a few small issues, but you still want the house...  You have two options:

Continue the Tango (Counter offer), or just buy the house as it is.

If you decide to counter offer (again!) Know that the seller can then at that point take in other offers. You are Killing off your current offer on a condition, so your agreement to buy the house is now void. Get the details from your Realtor and find out if they have any other people interested in the house. If nobody is in line, you are "more safe" you can use your inspection clause and make a counter offer, but there's always the chance someone could slip in, resulting in someone else now owning "your" house.

With our current house, the inspector discovered the rear side of the roof is fairly worn. The front looks perfect. It'll have to be replaced in the next few years. Between that and the bad electrical panel we invoked our inspection condition and pulled our offer to knock $5000 dollars off the asking price. They countered with $2500, and we accepted. Its not the cost of a new roof, but every bit helps. We didn't want to push our luck, because we knew we were the first ones in line, and other people wanted to buy "our" house.

The knowledge that the current owners needed to move ASAP allowed us to haggle a bit more. If we Pushed our luck too much, The sellers could have shut the door on us and gone with the next offer in line, since we technically invoked our Inspection clause to try and haggle more for the cost of replacing the roof and electrical panel. We gambled, and won.

Bottom line:  Get a house inspection. Really, you're spending a quarter million dollars. 400 bucks for an inspection is NOTHING compared to the world of hurt you could be in if you miss something critical.

Next post:  Houses to "walk away" from.

7. "The Tango" (Offers and Counteroffers)

So, you Submitted your first offer, and they came back with a counter offer.

This is NORMAL.

If they accepted it outright... you'd probably feel a bit ripped off. "Could I have gone lower?"

Be happy. You have opened a dialog with the seller. They want to sell, you want to buy. Now, as long as nobody gets pissed off, You can come to an agreement. It takes two to tango, and now you're both on the dance floor. Just don't step on their feet!

Now that they have opened your offer, they can only deal with YOUR offer until they reject it, or your counteroffers. Only once you or they have rejected your offer, can they accept offers from other people.

Hopefully you and your Realtor plays hardball and came in at an aggressive price. Now you and the seller work your way to a (hopefully) happy medium. I was surprised how many times the offers went back and forth during both of our "tangos"  Here's the first one:

Note: I just made $0.00 the "asking price" and I've only listed things that have changed between offers to make it simple.

1. US: First offer: -$15,000, Include ALL appliances, Including mini bar fridge Closing Date of Friday July XX
2. They: Counter offered, all accepted except: -$5000, All Appliances except Washer and Dryer
3. US: Counter Offer: $-10,000, ALL Appliances
4. They: Counter: -$7500, All Appliances Except Washer and Dryer, threw in free Muskoka Chairs
5. Us: Counter: -$7500, ALL appliances. Also told the Realtor that this was the last offer.
6. They: Accepted
7. Us: Signed acceptance

All this happened in 24 hours.

(we ended up walking away on one of our conditions (Inspection), but yes, it went back and forth, and there were tense moments about that stupid washer and dryer

Don't show all your cards to your Realtor...

So here's where I have the potential to get some people mad at me, but I'm going to shoot from the hip for your benefit. I am naturally frugal (aka I spend money on "stupid" things, but I don't like spending a LOT of money) so I am a bit aggressive when it comes to haggling.

So, While you should use and trust your Realtor  I wouldn't necessarily show them all the cards in your hand. I had to look my Realtor in the eye and tell him: "I will NOT buy this house without appliances" Simply because I really WANTED the appliances, not because I had to have them.  At the end of the day, he told me we may lose the house over this, and I looked at him and said "That's fine, we can't afford to buy new appliances" Because he believed me, He was able to effectively convey that, and the Realtors (both sellers and Mine) were able to work on the owners of the house. In the great game of Chicken, They flinched first. It was a risk, but I knew there would be other houses if things fell apart over this.


If you tell your Realtor your Exact price that you'll walk away and not buy the house, you'll find you will more often than not, you'll get THAT exact price. Don't tell them everything, tell them what they really need to know. Just know that If you keep back something important, and you lose the house as a result, they will probably get a bit angry with you. You just don't have to tell them all the little details. It gives you the ability to Bluff and push your price point a little more without getting too much resistance from your Realtor before it even gets to Their Realtor. You gotta keep your game face sometimes. (Megan was the WORST at this. The first things out of her mouth on every counter offer were "I think we should take this. It feels like "the one".") 

Our Realtor was very educational for us, and gave us a lot of information and was great. We would always play a little game of "What do you think this house will sell for" at every viewing.  When it came to a house I actually really liked and was thinking we would put an offer on, I'd always say that the house was worth about $10,000 less than I actually thought it was. This does two things: It compensates for your Emotions, which drive you to say "LETS BUY IT NOW!" and it also sets your price point more aggressively  if its too aggressive...  your Realtor will let you know.

If you're near your Financial Cap when offering on a house, be prepared to walk away if you hit your price limit. My Realtor was pretty good, but I've heard a ton of horror stories where the line "Do you really want to risk losing this house over a couple of thousand dollars?"  and comparing it to "only a couple dollars a month" etc. These are high pressure sales techniques, and if your realtor is doing this to you, You may want think twice about their loyalty to you, vs. their wallet. Realtors are Realtors to make money. 

To set things clear, I do not see Realtors as "evil"

There are people who "hmm and haww" for months, passing on house after house, never willing to make the plunge. These people Do sometimes need a push. A good Realtor will push gently, as it is a HUGE commitment  and will effectively put you in debt (kinda) for the next 25 years. Just don't let ANYONE push you into something that isn't right for you.

I'm just saying: Think of yourself, FIRST.

You are buying your first house. It MUST be a deal, a great value, and be right for you. It must be sellable in the future, Hopefully for more than you paid for it! If this isn't working out, If the price isn't right, Reject the counter offer, and start looking for a better fit. You only get your First Time Homebuyer perks ONCE, and it is literally thousands of dollars of savings. You NEED to make sure you're getting the most house for your money! Do not let anyone push you into buying it.

So Once you've accepted the counter offer (or they've accepted yours) you gotta jump on the Building inspection, getting a Lawyer and a bunch of paperwork.

Next post:

Inspection Time!

6. The First Offer

The "perfect" house has come. You used your Realtor to get the inside scoop. They will advise you on a price they think is acceptable, but ultimately, your Realtor will do what you tell them to do.

You set your max price, Stick to it! Your first offer should be well under that price, but rarely is your first offer accepted. (If it was accepted... I'd  personally feel ripped off. "could I have gotten it cheaper? Yuuuuppppp!!!")

You calculated what you can afford before, so don't let your emotions get you  into trouble. Compare this house to others on the street. is it the most expensive? it'll be harder to sell. Is it the cheapest? Why?

You WON'T get them all.

There is one out there for you, at your price. If you find an amazing house, and its too expensive, It isn't the house for you! The last thing you want is to have a nice house, but pouring every spare penny you have into keeping it - Then it becomes a place of resentment, rather than your fortress of awesomeness. You have Time. You're renting or living at home, you're not in a rush. Use that first time home buyer to your advantage!  However, it may not be YOU that is the reason an offer doesn't go through...  Some crazy unexplainable stuff happens sometimes...


True Example story #1  

We found a cute side split the day it came in on the market - It had 6 offers by 9PM that night, we were offer #7 at 9:00PM, We knew it was "hot" and going to sell, so we came in at what they were asking for it. Said and done, it was implied that we were the LOWEST offer at "asking price" They ended up getting $15,000 OVER asking. This broke our "offer" cherry, and we were so demoralized that we weren't even CLOSE to getting it, considering we reacted within hours to try and get it.


True Example story #2 

We also put an offer on a house for asking price that was then promptly taken off the market, then re-listed for $50,000 More than it was the week before.  Sellers do some weird things some times, and are inherently greedy. (I would be too!) We didn't even really like the house, but it was a super deal and saw it as more of an investment.



Offer Conditions, Nothing is set in stone... (Haggle!)

If I'm at a "cash" establishment, I will naturally just start haggling. This happens with houses. The list price is by no means set in stone.

Take lots of pictures at your viewings - Some people will be sneaky and take out their 500 dollar Chandelier  and replace it with a 30 dollar Ikea special. Pictures can prove otherwise. it'll also let you  go through them when making your offer to determine if you want and are getting the proper...:

ELF and Window Coverings
Generally, offers will say "all existing ELF (Electrical/Existing Light Fixtures) and window coverings" But If there are 1000 dollar sheer blinds you love, Make sure to write them in as well. Its your first house, so going to blinds-to-go and sinking 2 grand so your neighbors can't see you changing isn't exactly ideal. If you move into your new house and put up sheets and tinfoil, your neighbors will probably disown you before they've met you!

Appliances
As a first time home buyer, you probably want those appliances, unless something has been growing in them for years. (even then... bleach works wonders) Write them in, Explicitly naming each appliance. We had trouble with this on one of our offers.

Other things
Generally, anything bolted or screwed into a wall is yours. Exceptions are generally TV mounts. When in doubt, put it on the offer. We thought the backyard umbrella was bolted on. Alas, it was not. We don't have 400 bucks to freely spend on a "luxury" item like a 12 foot umbrella, so we invest in sunscreen instead.
Look out for things like Mirrors, wall mounted shelves, Bars, Wineracks, and substantial decorations if they're part of the yard (flower pots, Greenhouses, those self contained firepits/firepot things.

Other Conditions:
These three conditions Cover your ass completely, and wording is VERY important.

Condition One: "Conditional on 2 (or 3) visits to take measurements before the closing date"
This allows you to ensure: You can draw up a floor-plan to figure out where to put your stuff, You can ensure they're taking care of your new house, you can show your place to very limited special people in your life before you get it.

Condition Two: "Conditional on the buyer obtaining personally acceptable financing
Not that this comes into play often, but the "personally acceptable" financing gives you an extra degree of protection. If your mortgage company comes back and says your rates are higher for some unknown reason, you have an out. if you decide you just want to pull the plug and walk away, it helps you say "I didn't like the financing" and walk away. You want the freedom to be able to walk away, and this is a sneaky way of doing it, that doesn't scream "I'm a flight risk"

Condition Three: "Conditional on personally acceptable Inspection Results"
The wording on this one is much longer than what I've put (usually there's a time limit to this condition, 14 days or something, but the idea is the same. You're probably not a builder, or even super handy (owning a house will help make you handy... trust me!) So HIRE someone to tell you if you got a good house. At this point, your Realtor is starting to smell money, so they LOVE the look of the house and will talk you into it. I've worked with sales people and as a sales person in previous jobs. No salesperson will be truthful if they deny that when they smell "close money" its similar to a shark tasting blood. There's a thrill when there's a big deal about to close, and you need to look out for yourself at this point. The Inspector can save you from making the most costly mistake of your life, and this condition allows you to walk away with zero commitment if he finds something you can't cope with. Other options are to re-open the offer and haggle. I'll call this "the tango"



The Price on your offer:
If a house has been on the market for more than a few weeks, the owners start to sweat. Generally sellers want a flurry of activity right off the bat, and a bunch of offers. Lowball! Get your Realtor to estimate what you should offer for. There's a low point at which you'll insult the owners, the Realtor will know this best. Come in Just above that point, with all your desires (appliances, ideal closing date, etc) If you didn't insult them by implying their house isn't worth much with your offer, you'll probably get a counter offer.



Begin "The Tango"  (aka... the next post!)

5. Get Ready to dive - USE YOUR REALTOR!

OK! So, at this point:

You have a realtor
You know what you are pre-approved for (price range)
You have a list of wants and needs
You have seen countless houses


Now is the time when you need to be ready to jump at the RIGHT house.


I know I said "don't be rushed" earlier on, but once you have found the house for you, you WILL be rushed. Its unavoidable.

So, You both have seen the house with your Realtor. You loved it, it fits almost all your criteria, and its in a great area.

Now, you tell your Realtor you want to put an offer. Ask your Realtor to feel it out - See if the house has been getting action. He can also tell how much the house sold for last time it was on the market. (usually)

He'll talk to the current owners Realtor, and figure out whats going on, if the house is hot, Practically sold, and might be able to glean some information (aka, have the sellers already bought a house, do they need to move, etc.)

Your Realtor is your "spy" getting you info. I was lucky, I knew that my sellers needed to sell because they were pretty much already moved and bought a business a few hours away, and that the deal fell through unexpectedly. I was able to come in aggressively and Because I was a first time home buyer, was very flexible on the closing date, which my Realtor was able to find out was a key for the sellers!  Our closing date was just over 40 days, which is considered quick. (60 or 90 days is normal)

So, USE YOUR REALTOR.

Alex's Words of limited experience and wisdom:

Here's my Logic when it comes to Realtors. (Some of my Realtor friends will HATE me, but I'm calling it as I see it...)

Lets start off by saying that my Realtor was Great, and was exactly what I needed. He was "Gentle" with us to start, but started to push towards the end. (understandably, we dragged him to countless houses)

Your Realtor is both your friend, Going up to bat for you, and an invaluable tool.

But perhaps most important for you to remember: Your Realtor is a Businessman/woman, who needs and wants to make money.  

I'm bringing this up because I felt that since I don't "Pay" my Realtor  I felt bad/guilty for dragging him to countless houses, or when bad when he responded to my midnight e-mail questions in seconds. (he was awesome!)

A starter home can be within a wide range of prices, so we'll just assume you're looking at 200-300k for your house. 250k, to make it right in the middle.

Most Realtors charge 2.5% commission, so the total commission on a house is 5%. 2.5 for the seller, 2.5% for the buyer.

2.5% of 250k is $6,250.00

Out of that, Most Realtors have to give roughly half of that to their employer (Re-max, Sutton, Royal LePage, etc) with other things in mind (renting a desk, supplies etc)

So, roughly $3,000 is left. Now, a Realtor that sells a house a week is considered highly successful, and there's other things such as Taxes, Vehicle, Realtor Fees/associations... its not a cheap career to get into. Not to mention that Realtors basically dedicate every waking moment of their lives to their profession. They do work HARD for their money.

But, at the same token, Don't feel guilty about using your Realtor  My friend sat me down when I expressed doubt into looking at a house because it "probably" wasn't the one for us. That's when we started talking Numbers:

Back to the $3,000...

• 30 houses, at max 1 hour a house
• I went through 10 offers/counteroffers on various houses (1 hour each, estimated)
• 2 hours over coffee for introduction
• 5 hours of e-mail writing to random questions/opinions on houses via MLS
• 10 Hours on the Road, between houses, Delivering urgent paperwork, cheques, etc

57 Hours / 3000 bucks = $52 dollars an hour.

Now, I'm fairly sure you don't make that much, (I sure as hell don't!) so in that regard - Don't feel guilty.

USE YOUR REALTOR as much as you need!



Next Post: Losing your "offer virginity"

4. Whadda you want?

So, you have a price range, You know you want a house.

The next step, is to prioritize WHAT you want in a house.

Our Realtor was great with this. We were super excited, and wanted to see every house. he put up with us just as long as we needed to realize we don't need to see every house.

This is your FIRST HOUSE.

HOUSE! Something that takes 25 years to pay for! And you thought a car was a big commitment!

What took us over THIRTY (30... Our poor Realtor..) viewings to realize, is that it really is... Location Location Location.

We found some HUGE houses with big, deep lots for dirt cheap by the highway, And thankfully Our Realtor talked us out of it. (kudos Dave Embleton!)

Why Location?  because if you want to live there, Other people in your shoes in 5 years will as well.

You are most likely buying a "starter home"

Starter doesn't mean "shitty, run down, shoe-box-of-a-home"

It means you're likely not buying something with Slate floors, Granite Counter tops  4-5 Large bedrooms a pool and a double garage with a 100 foot wide lot.

it means you're probably buying a 2-3 bedroom, bungalow, Semi or Townhouse, where you can start a family, but not likely live there once you've popped out a couple of kids and they start growing up and demand their own bedrooms/personal space.

Our plans:
We plan to live in our house until we've got kid #2 on the way, I'm a firm believer of a guest bedroom, Particularly if some of your family lives in another city... or you like your friends to have a few drinks and a pullout couch ain't cutting it for your "couples friends"

So yeah, We dragged our Poor Realtor to over THIRTY houses before we realized we couldn't "skip a step". Rather than worry about the dream house, we worried about a place we liked, that met our minimum criteria (more on that shortly) and that would be easy to sell in a few years. The sellability of your first house is important! You're EVENTUALLY going to have to get rid of it. Ideally you want to make money on it.


So, WHAT did we want in a house?

Our First List:

Detached Home
Double Wide Driveway
4 Bedrooms
Side/Back-split (just a personal preference)
Rentable Basement
Move in Ready
Not a bungalow
Not on a Major Street
Close but not too close to a highway
Appliances included (Fridge Stove, Washer, Dryer, Dishwasher)
A place for both a computer workshop (side business) and a place where I could fix things (like a wood workshop/garage/place I could fix the lawnmower/cars etc)
A good sized Kitchen with Island
Open main floor to entertain
Master On-suite
Walk in Closet
Basement shouldn't contain a bedroom
Entrance to backyard from house for Dog
A yard for a dog to run around it.
No Townhouse
Good neighborhood

Huge list. Did we get everything we wanted?  Pretty damn close! (Bolded items)

I really wanted a detached home. Then I looked at the home we're in now, and saw that it met almost all of our criteria. The one reason we passed on it the first time was because "we don't want a Semi"

Well, two months later, it was back on the market because the buyers couldn't get financing. We looked at it again, after we and got the "dream house" mentality under control. I looked at it from a logical standpoint - 3 good sized bedrooms. Modernized kitchen, hardwood floors - The "Wow" factor. Look past that. Its got a decent backyard, and while it is a semi, it doesn't share any interior walls with the neighbor - Just connected via the garage, so my main reason for not wanting a semi - Noise - wasn't an issue here. So because we had our budget, our "list" and all of our ducks in a row, we were able to view it and put an offer within 4 hours of it being back on the market - Once we bought the house, we found out there were 12 other people in line behind us! Viewing a ton of houses helps define what is a "good" house to you, and lets you make the right decision at the right time.

as a result, we managed to save (aka "not spend") ourselves over $50k from relatively few "compromises"

So to do this, Take that First list, and then ask... "Do I REALLY need all this?"

We found one house that we technically actually bought (but walked away from after inspection) that didn't have a coat closet!!! No front coat closet! it was 90% of the deal breaker to me, I was secretly (not really...) glad the building inspection wasn't glowing and I had an out. I was also embarrassed that I didn't realize this after 2 visits, but when my mom pointed it out when I was showing her pictures.

So yes,

you have to Make your list, you have to Check it twice, you gotta Find out whats required and whats nice.

(if you have the song santa clause is coming to town after reading that last line..., you're a super nerd... (like me)

Once you have that list, Look at it again. Ask yourself: is anything on this list WORTH 10,000 bucks. If not, I recommend adding it to the "nice" list instead of the required.

For example, if we found the dream home, with only a single wide driveway, it'd only be 1200 bucks to make it a double wide driveway. Be flexible as to what you need RIGHT NOW, and look at what it could be (to a point... remember you're likely to be broke for the first year or two after you move in.)

I am blessed with a Wife-to-Be who is amazingly easy to please.  I swear she has OCD, so basically, if the first thing she sees in a house is awesome, The blinders go on and she loves the house. We built the "list" together, but I was largely the Decision maker as to what houses we'd go see (and ultimately the house we bought)

It took a while, but she seemed to realize this too, and ended up realizing that if I was happy with a house, she'd definitely be happy. I did consider her wants and needs in every house I wanted to look at.  In fact, the house we ended up with, she didn't even see before the building inspection, after we both signed our offers and counter-offers on the house! Again, I was super lucky to have such a chill partner in crime. You might not be so lucky ;-)

Once you have your "gotta haves" down pat, you have to think "Where"

Megan and I wanted a place on West Hamilton Mountain.  Its a nice area, close to Meadow-lands for big box stores, and her family lives on the west mountain. Its my non-so-funny joke that her entire family is just one unfortunately placed tornado away from extinction. (I've got a bit of a sick sense of humor)

We finally had the area decided, I got a map from Google maps, and photo shopped red, yellow and green areas of the Neighborhoods. Red near busy streets and the University (to avoid student housing areas) Yellow along neighborhoods we weren't crazy about, and Green for the "good" areas we liked after driving around.

Once this was set, We basically went to see ALL the houses we thought might fit our criteria. Some where Tired money pits, others were very nice but just missing a few key features.

It takes a while, but you quickly realize what is important to you after you view a few houses. I'd go so far as to saying you should NOT buy one of the first few houses you see, until you go look at a few more after it.

Key points:

• Go look at a lot of the houses. Eventually, you will "catch up" to MLS, and see new ones pop up.
• Get a list of what you want.
• Then pick what is absolutely nessessary. Remember, you're most likely not retiring here - You'll buy another house with the white picket fence and the willow tree in the front yard another day
• Use your Realtor!!! (more on that later)
• Don't be in a rush!
• You will find that you will see some houses that just seem HORRIBLE. Look past the paint color. Still Horrible? WHY? document it and look out for it later in future viewings. You might find a house that has great initial appeal, but then when you look for these things you don't like, you'll realize you were looking through rose colored glasses. Pot lights and nice countertops can sometimes disguise Old appliances, Lacking features, etc. These things attracted us like a moth to a flame, and blinded us from other short comings.
• "Location, Location, loc-... Sell-ability" - its your first house - Make sure you can sell it again! You might not mind the highway or mall behind your house, but 95% of the population will!

That's all for now!

next I will outline what goes down when you actually say "This is the one"

3. Mortgage Time - The Bank said WHAT?!?

Now that you are certian you want to buy a house, its time to make sure you can afford a house.

From my last post, you may have picked up my shock that a bank would lend us $350,000 buckaroos. I wouldn't lend me that much money, why the hell would a bank?

Now, What you will be approved for, and what you can actually afford, are two, VASTLY, COMPLETELY different things.  Don't listen to the bank.

So, "Don't listen to the bank." Really? how does a 27 year old first time buyer know more than a friggin billion dollar Bank?!  Foreclosures.  So many people are losing their houses. Clearly, the banks are greedy, and want your interest money. So much so, that they know the risk of you foreclosing, but want that interest money anyway.  Its nearly killed the economy.

So, Trust me,  Do your own "pre-approval"  If you're honest and realistic with yourself and your budgeting, You shouldn't have a problem being approved for that amount.

Pro Tip: When I finally got a mortgage broker, I didn't see how much I could get, I just said "I want pre-approval for XXX amount."

DOWN PAYMENT:

Somehow, I almost forgot about this one.

As a first time Home buyer, you have the option to rape your hopefully existant RRSP's. You can take up to a maximum of 25,000 out of your RRSP's.

There are few restrictions:

1. You must pay back 1/15th EVERY YEAR. Failure to do this will result in the tax man taking you behind a 3rd rate motel and doing unspeakable things to your taxes. (aka you'll owe a large amount of income tax you will probably not afford, as a new home owner)
2. You have 15 years to pay this back.
3. The money Must go to your house (really hard to prove... but generally, when you move, almost 90% of your expenses are related to your "house" 
4. Unless your RRSP's make a great return, (aka over 6%) This could be the cheapest "loan" you will ever have. Zero interest. But it is a LOAN (even if it is technically a loan from yourself)
5. You won't be able to lower your income with RRSP contributions when paying the minimum 1/15th a Year Back. If you pay More than the minimum, you can specify what portions go to repaying your RRSP "loan" and how much should go towards lowering your yearly income (thank you to citygirlcountryhouse for the pointer)

If you have 25 big ones in RRSP's, you probably have "a guy" (or girl) that manages all this. I found my self saying "I'll get the Down payment from my investments guy" a few times. I'm not sure if I liked the sound of it. Sometimes, I felt like it made me seem like a douche, sometimes I felt cool saying it. (random aside)

This "investments guy" is a source of information. its fairly painless to get this down payment from RRSP's if you have them. call them. Once I needed it, it took about 3 days to sell the stocks my RRSP's were in, and then I just had to big up one big ass cheque (not like the Happy Gilmour type...)

Otherwise, I recommend you have 13% of your house value in available funds. (10% down payment, 3% closing costs (Closing costs talked about in a later post)



The next part is fictional numbers, but you'll get a good idea of budgeting from it. 

So an assumption: (Yup, looks like you and I are asses) 

If you're reading this, I'm assuming you've been renting, and have a stable monthly Income/expenditure. 

We're just going to assume (that word again!) you make $5000 a month AFTER TAXES. (i'm lazy, its a nice even number, assuming two people are making roughly 40-45k a year)

Now, subtract all your Payments and monthly bills, NOT RELATED TO RENT (i.e. you're still going to need this, after you move) (assuming there's two people, 2 cars etc)
$5000
- 2X Car Payments (700)
- 2X Insurance (500)
- Debt payments (0-$600 a month)
- TV (60)
- PhoneX2 (120)
- Internet (60)
- Monthly subscriptions (Gym, Magazines, Misc.) (60)

Now, lets say you have $3000-3500 dollars left a month. Awesome!

Now, Undefined Monthly expenditures (varies from person to person)

Gas: 350
Car Repair/maint 125
Groceries 450
Entertainment: 200
Clothes/upkeep: 150

Now, you're down to 1750ish a month.

on 1750, What mortgage could I afford?

Well, Not $1750 a months worth! On a 25 year mortgage, that would be over $350,000!
When you rent, the rental company manages all the costs. Taxes, Gas, Hydro (usually) Water, Maintenance. (some better than others)

I'm finding out (still, 3 months later) that all these cost more than I anticipated. Thankfully, I didn't max myself out on the mortgage, or I'd be up the creek.

While the bank was willing to give me $350,000 I set my price limit significantly lower. I had two targets in mind, one if we could rent out the basement, and one without.

So, Take your monthly "left over" money (which is probably partially used up by rent right now) Now, take 60-70% of that. This is what I would say, is your "safe" mortgage payment.

There are a ton of other monthly expenditures every month, so you NEED a float. Cash you can save for these items.

So 65% of $1750 = $1135 a month This equates to a good sized mortgage for the first time buyer!

The remaining 600 a month is important, so don't waste it! we'll use it for utilities and maintenance and TAXES *shudder*

on a 25 year mortgage at today's variable rates, this is about $240-250,000 bucks.

Now that you have your price bracket, You have to decide WHAT you are looking for.

At this point, Add on 10%, And ask your Mortgage Broker/Bank for pre-approval for this amount. (if you were not honest with your expenses, your broker might shoot you down before it even gets to any banks/lenders)

Now, you get to the fun part. This is where things have the potential to move fast, and get crazy fun and or hectic.

You know you want to buy. And you have your price range... Now what?

Next post... (in a few days) 

2. Deciding to buy a house

It wasn't an easy conversation.

Megan and I have always had this "You and me Vs. the World" Mentality, that no matter what, we'd tackle everything together.

We had a conversation about Buying a house First vs. Getting married First.
In my mind, Buying a house made the PERFECT sense.

We were paying $1540 a month in rent at the Diplomat in Burlington. It was a nice building, but as all renters discover, had its drawbacks. (hot water shutoff, Fire alarms, Broken elevators, Nosey and noisy neighbours, etc. Anyone who has rented has experiences these annoyances. 

Also... did I mention we were paying $1540 a month!?

So, I started to do the math, and slowly started dropping hints to Megan that we would be better off financially for the rest of our lives if we got our foot in the property door and bought a house. I kept dropping these hints and nudges over a few months.

Then came the day finally approached Megan on it, all my ducks in a row, with an Open and shut case towards buying a house before getting married. it made perfect sense!

...

20 minutes later, I came out of the conversation on my ass, scratching my head wondering what just happened. How did she NOT see my logic? How was this turned against me? why do I feel like I just tried to kill a litter of adorable baby puppies?

...

Turns out, Logic had nothing to do with it, it was an emotional decision for Megan. (and buying a house IS emotional. I found it critical to manage both mine, and Megan's emotions, as you'll find out later)

So, I kept dropping hints, And then relating it to the wedding instead of "instead of the wedding"  Things like... If we buy a house, Then we'll know what to ask for on our registry etc...

She started to warm up to the idea.

All the while, I was scouring MLS for a house in our area that matched MY criteria 

And then I found it. On Darlington Cres. It was our "Dream house"

I showed Megan it, and she fell in love as well. it was amazing. Granite Counter-tops  Pot lights, hardwood floors, Beautiful living room, neat, unusual but practical floor plan. Side split with a good sized attached garage, and a good sized backyard, with a stairwell to the basement entrance so we could rent it out to "pay for our wedding"

We looked at it for a day, then Called our Friend/Realtor. he got back to us a day later -  SOLD.

We were Completely deflated. It was so awesome. I had showed it to my parents already, and they thought it was great too, and were willing to help however they could. It was the benchmark that we compared every house afterwards to.

It was, however, at this point, when we talked to the Realtor, we realized how completely unprepared we were.

We did get caught up in the action, and Megan finally started to imagine what we could do if we owned our own house. We were finally united against "the world" again, and she was on board the "buy a house" wagon. Not totally because of Logic, but Emotion. Seeing our "future" together in a house, forever. She realized that I was willing to buy a house with her, which meant I just as committed to "us" as getting married and living together forever.

United, we were both "team house" Albeit for slightly different reasons.

Now, back to being unprepared...  We called our Realtor out of the blue - I played on a pool league with him, and knew him pretty well. However, he wasn't from the area. He's a great guy, but I should stress - Unless your wife/parents/brother is a Realtor, Get someone from the area you are looking to buy in to be your Realtor!  (more on your Realtor later)

Our Realtor started us off very smartly. He came over, and explained WHY and why not we should buy a house, and gave us some time to think about what we actually wanted in a house, and if it was right for us. 

Personally in the back of my mind, I already knew why I wanted to buy a house, so I went through it for Megan's sake. 

Basically, Its a numbers game.

I was paying 1540 a month in Rent. 30 dollars a parking spot X2 , meant 1600 a month. WAYYY to much. We were on a beautiful 3 bedroom apartment, On lake ontario, with manicured gardens... We thought "we could live here until we get married and have children. it was also large enough so that we didn't have to throw away furniture when we merged our belongings. (it made sense at the time... again, the emotional game)

Back to the numbers.

Mortgage Rates are/were low, so Looking in Hamilton  I knew with our combined salary, I could be approved for a $350,000 house...

Wait, what?!? a BANK would trust us with 350,000.00 bucks!?!

More on that later.

The Bottom line was, Rent is money that is GONE. You cannot get it back. If you can afford to buy a house, You should. Eventually, you'll build up equity. There is added cost to owning a house, but the long term gain is there. The sooner you get in the door, the sooner you'll start building equity.

Granted your first payment is almost 99% "rent" money to the wind... but eventually, that 99% becomes 80%... becaomes 50%, becoomes 25... and then almost all of your mortgage payment goes to your own net worth instead of your banks pockets(or land lord if you rent)

Next post... The First Steps/Wall:  Money.

1. Hello World! - A "First Home" Blog

Hello World!

So Megan (My fiancee) and I decided to buy a house before we got married. Prices seemed to be on the rise, and we targeted Hamilton, Ontario as our market - Its where her family lives (my family lives up past Peterborough  which was out of the question for both of us) and the land values have not skyrocketed yet like the rest of the GTA.

The biggest frustration, is I couldn't find a website made by someone who wasn't PAID or directly involved by the real estate industry to:

• Guide my way through the process 
• What I should be looking for
• What to expect
• What costs I'll find along the way
• What I should avoid

Almost ALL material is geared toward you buying a house quickly instead of properly.

I was in no rush, and as a first time home buyer, you will be in no rush either. The market is your oyster, and you have tremendous perks/power when it comes to buying your first home. It's the ONLY time you get this "newb" bonus card from the government, and you need to abuse it as much as you can, in your favor.

The pressure seems to come from the real estate brokers. (Pro Tip: there is more than one you have to deal with... More on this in a later post.)

The mission of this blog (if anyone reads it!) is to first, outline how I bought my house, my successes, frustrations, the overall process, hidden costs. (there were many!) I will also be doing reviews of the positive vendors I used along the way.  Once the "buying" has been covered, I'll be switching over to the trials and tribulations of owning your first home, and the butt-load of unexpected items that seem to crop up.

Just some notes:

1. I am, by NO MEANS, an expert at anything I shall be talking about.
2. I consider myself Savvy, well researched, and fairly "handy".
3. I tend to lean towards the DIY route.
4. I will be writing reviews about the positive experiences with vendors and where to contact them. The negative ones - Just the review, I will not identify them.
5. I will not respond to internet Trolls. I have reasons why I made the choices I made, Some of them aren't right for everyone, but so far, have been great for me. 

About the "author"

• My Name is Alex "Sudz" (my actual last name is pretty much unpronounceable).
• We moved into our house in Hamilton, Ontario Canada, at the end of July, 2012.
• My fiancee and I have been living together since Februray 2011, when we started Renting an apartment together in Burlington, in a really nice area, for too much money ($1500-$1600 a month).
• I am an I.T. Guy by Trade. The most handiwork I do is mounting server equipment and shelves. 
• I've helped my dad build decks and docks in the past, but that's mostly just a bunch of hammering nails.
• Growing up, my dad was always giving "lessons" on how to fix cars, build motorcycles, and repair various things around the house. I'd "help" by keeping him company and watching, and occasionally holding the shop light when we were crawling around under cars or the house, etc.
• I do have a bit of a knack for figuring out how things tick, just by looking at them and/or Breaking them and putting them back together. (my parents LOVED me when I disassembled all my toys... and their appliances...) 

So Now that the introduction is done, my first real post will be how we decided we wanted to buy a house, and prioritizing our "wish list". A huge step!

Alex Sudz