Small House or Big House?

[max_boost]

I can't quite decide what I want to do right now. I can purchase a smaller size house arond 1500sq.ft in the price range of $250K which would be suitable for my current needs as I don't plan to start a family or get married for another 5 years or so. Or I can just outright go for a 2000sq.ft home in the range of $310K and won't have to upgrade later when I start a family.

I'm sure a lot of you probably go through the same thing when searching for a home, what do you think?

In either scenario, I'll most likely have 1 roommate to help offset some of the costs.

[ecstasy_civic]

Personally, when I was looking last yr, it seemed like a better idea to start smaller so its a nice upgrade when you do decide to start a family.

Like yourself, I get bored very easy lol
The reason I havent purchased yet is im very picky and I dont know how long I could stay in one place. Id like to wait until I can settle down a bit more:D

[izzoblitzo]

I would definately say go for a bigger house (but nothing tooo big.. 2000sq ft sounds about right) and do more upgrades. The house sells better when there's evident upgrades. Obviously, the location, the condition of the house blah blah blah is a main factor too, but upgrades such as granite tops is the way to go. :)

[ecstasy_civic]

But then hes spending 300+ and having to add more into that, if you start with a nice smaller house and do upgrades, youll get more in resale IMO, young people such as ourselves want the most for their dollar.

[/////AMG]

Depends really. I think I would buy small because when you sell it you will make a nice profit, and then can move bigger, but prices are going to go up anyway. Hmmm... I don't know now haha.

Actually if you want profit, buy big now, by the time you want to sell or move you would have made some nice cash, better to settle infor a while rather than moving twice. It all depends on the person really.

[BumpinTalon]

the bigger your house, the more likely people are going to want to party there, and thus the more money you will have to spend on entertaining in the long run hahaha :D
right now, I would get the house on the more valuable lot with the brightest future, so one in a rapidly growing neighborhood situated on or near a road that is having significant infrastructure work done soon (the better the roads, the more appealing it is to commuters... along this reasoning, the NW is a very good place to get a house right now, although the ring road in the south will also help). investing early is always a good idea, and while houses inflate in value, the land they are on inflates in value even faster.
that's just my advice, from an investment standpoint. the real estate market all over Calgary is going through a boom right now. Cochrane is going through a huge boom too, right now would not be a good time to buy a house here. If you don't mind commuting a long way every day, and want a house in Cochrane, you should wait awhile because there are currently plans to add a LOT of homes (3,500 over the next "x" amount of years, I forget how long) and if that plan goes through, house values should drop a good amount around here. Right now, everything is inflated in value here pretty severely, our house is worth almost 30% more now then what we paid for it.
plus, a 1500sq ft house is still a reasonable size. You could easily live with a wife and one baby in that house and then move up to a larger house down the road, if need be, but since Calgary isn't going to stop growing any time within the next ten years, it would probably be a good idea to get the bigger house right now just to save your money and not have to pay the premium you will be looking at in however many years to upgrade from the 1500ft^2 house to the 2000ft^2 house.

[sputnik]

I bought a 1400+ sq ft house for just over $200k a couple of years ago. Me and the wife arent planning on having kids so the extra bedrooms and space wasnt that much of an issue. The one thing I did though was upgrade it as much as possible. I was thinking about a place that was around $280k at the time but really didnt want to have to worry about interest rates changing or having a big bill sneak up on me and cause me problems. If my wife wasnt still in school I am sure things would be different. However I have yet to be frustrated with a lack of space. In fact, there are rooms in my house that I rarely use.

I am assuming that if you are going to build a smaller house, you will want to think about resale (since it will probably happen inside 5 years for you). Here was my mentality when building...

The design I had gave me a 2 bedroom option, which gave me 2 master bedrooms each with their own walkin closet and en suite. It also added a computer nook at the top of the stairs. This will probably be good for resale as a number of people in my area buy their house and rent a room to friends to help with the mortgage (like you plan on doing). It is a much more appealing layout without kids since I really dont need two small bedrooms. I would just end up storing junk in them anyways.

I also got a HUGE lot. For an extra $6000 at the time I was able to more than double the size of the lots normally found in my area. The lot itself is over 7500 sq ft which is ample space for a nice comfortable backyard and should make resale easier than the guys with the postage stamp lots in the area.

Hardwood floors and tile are important. Carpet shows wear much quicker and generally speaking hardwoods are more appealing to someone who will eventually buy your house. They are also easier to clean and look better.

The house is on a laned backyard with no garage. The one thing I regret is not getting a garage built right away and adding it to the mortgage. I am not a huge fan of front drive double garages as they are generally only 20x20 and barely fit 2 cars comfortably.

[bonnieclyde240]

Since your not looking to start a family anytime soon, I suggust buying a small house. If you are fairly young, I'm pretty sure that you want to enjoy your life before you settle down and that extra money you would save could go to leisure/hobbies/trips etc. Then when you are ready to have a family, sell the house and buy a bigger one with your significant other :thumbsup:

[Weapon_R]

Financially, it would make more sense to buy the smaller (cheaper) house and build up your equity faster. The criteria mentioned above (partying, family, hobbies etc) are not something i'd consider if I were buying a home with the intentions of relocating within 5 years.

[izzoblitzo]

hmm.. good points indeed. Well.. if you plan on moving somewhere down the road, then the smaller home is the way to go.. upgrade, but dont spend a fortune if the community itself isnt worth upgrading.. like, you'll see this shabby neighborhood, and some guy decides to dump $400,000 into renos... in the end, the house wont be worth as much because the houses next door are only worth $200,000.

However, I moved last summer, and after that move, Im not about to move again!! I think Im gonna build, and build it the proper way and live there for awhiles before I even consider moving again!! :D

[JordanLotoski]

id go for the smaller home, why burden yourself with a higher payment for space your not gonna use. With the way the market is in calgary your gonna do well on either....Also depends what area your gonna buy in.

[E36M3]

Whatever you decide to do, make sure to buy so that you are happy for 5-10 years minimum. Whenever you buy/sell, you transfer a large portion of the equity of the home into the hands of realtors, which means that if you buy right the first time you will have a larger portion of your own money going into the long term value of the house.

The smallest house I've bought was 2000sq ft, and I wouldn't buy smaller.


Originally posted by max_boost
I can't quite decide what I want to do right now. I can purchase a smaller size house arond 1500sq.ft in the price range of $250K which would be suitable for my current needs as I don't plan to start a family or get married for another 5 years or so. Or I can just outright go for a 2000sq.ft home in the range of $310K and won't have to upgrade later when I start a family.

I'm sure a lot of you probably go through the same thing when searching for a home, what do you think?

In either scenario, I'll most likely have 1 roommate to help offset some of the costs.

[cityhunter2501]

i personally preffer a smaller house, simply because its easier to clean

[blitz]

It's not just the square footage, but the usable space the house has. Does the extra 500 sq ft mean you have a formal dinning room and slightly bigger bedrooms? Does that matter?

Despite what people say, you don't need a 2000 sq.ft home the moment you have your first kid. Baby's are small, and they take a while to grow.

[Carfanman]

I dont think you should buy it based on financial reasons. The market could very well go down, its risky.

I think you should buy a house that you like now and is good for you now then when the time comes, buy something bigger, maybe you'll profit, maybe you'll lose, maybe you'll break even, who knows?

You also need to take into account the not-so-obvious expenses of a bigger house, that you may not be ready for.

For example, like someone mentioned, if you have a bigger house, you might throw alot more parties. Thats a pretty big expense. If you dont want to clean, and you hire a cleaning lady, your have to pay her more than in a small house because she's cleaning more.
You dont need all the extra space, I see it as a big risk.

[jdmakkord]

Originally posted by Carfanman
I dont think you should buy it based on financial reasons. The market could very well go down, its risky.

I think you should buy a house that you like now and is good for you now then when the time comes, buy something bigger, maybe you'll profit, maybe you'll lose, maybe you'll break even, who knows?

You also need to take into account the not-so-obvious expenses of a bigger house, that you may not be ready for.

For example, like someone mentioned, if you have a bigger house, you might throw alot more parties. Thats a pretty big expense. If you dont want to clean, and you hire a cleaning lady, your have to pay her more than in a small house because she's cleaning more.
You dont need all the extra space, I see it as a big risk.


You have no idea of the housing market in calgary or the surrounding areas. Calgarys housing prices have steadily gone up for the last 20 years, and are not stopping any time soon.

[Carfanman]

Thats definatly something to take in to consideration, but thats no garantee. You think it will go up for ever? It may or may not change. And maybe something specific will happen in that neighborhood. I just dont think its worth it if he doesnt need it.

[jdmakkord]

Originally posted by Carfanman
Thats definatly something to take in to consideration, but thats no garantee. You think it will go up for ever? It may or may not change. And maybe something specific will happen in that neighborhood. I just dont think its worth it if he doesnt need it.

The ENTIRE Calgary housing market has jumped. With all of the big oil companies relocating to Calgary from out east, plus other industries, it is only going to go up, because there are not enough vacant houses around. Our housing markets may be forecasted to slow down, but seeing as they are red hot right now, that will still be better than most cities in north america.

[Weapon_R]

The housing market in Calgary does not show any indications of slowing down at the moment, but it was not so long ago that this "oil rich" city was devastated and people were walking away from their homes.

[Carfanman]

All, I'm saying is if he takes it as a given and takes no caution, then in the chance that it goes down, hes in trouble. Maybe just the value of that particular home or neighborhood will go down due some nearby problem (new nearby highway, recent thefts, damage that he cant afford to fix and insurance wont take care of, ect...)

And he doesnt even make any money till he sells it, while he has it the value doesnt mean squat, and then soon after he sells it, it doesnt mean squat either. He should buy what he needs and can comfortably afford, even with not-so-obviouse or unexpected costs.

[5abi]

"Financially, it would make more sense to buy the smaller (cheaper) house and build up your equity faster. The criteria mentioned above (partying, family, hobbies etc) are not something i'd consider if I were buying a home with the intentions of relocating within 5 years."

PERFECT ANSWER BY WEAPON R.

[FiveFreshFish]

Get a small house with a big garage! :D

[Davetronz]

I have been there before.
Get the smaller place... With someone who looks after your yard, snow shoveling etc.

When I was out on my own the worst was working 5 days a week and then on my two days off spending 1 whole day cleaning my house and the other whole day doing yard work.

[C4S]

:cry: :cry:

my house is only 1500 ft .. and it is only a SMALL house in you guys' standard .. :cry:

[JordanLotoski]

1500 is a decent sized home for 2 people....and least u have a house, look at it that way!!!

[tapout]

Originally posted by C4S
:cry: :cry:

my house is only 1500 ft .. and it is only a SMALL house in you guys' standard .. :cry: :dunno:

[Impreza]

1500sq ft is more than enough imo. My family of 4 people live in a 1000sq ft house. It is small, but nobody really minds that lack of space because everyone is either working, at school, or out. Hell, nobody even goes to the living room! lol

It all depends on how much space you need. Personally, I like a small house because I don't have the time to clean and do a lot of the maintenance work.

[tapout]

depends if you make good $ are wealthy?if you got the $ go big have fun you never know when your gonna die enjoy life man your $ does not follow you to your grave:D

[sputnik]

Originally posted by Weapon_R
The housing market in Calgary does not show any indications of slowing down at the moment, but it was not so long ago that this "oil rich" city was devastated and people were walking away from their homes.

:werd:

The oil bust of the early 80's, compounded with high interest rates left Calgary a ghost town with people walking away from their houses. People were literally leaving their keys in the mailbox and walking away from their houses.

My dad was working a couple days a week in Calgary during that time and remembers seeing downtown Calgary littered with buildings that stayed half built for years. There were collections agencies and banks calling his office weekly trying to track down the people who walked away from their mortgages. Everyone lost during that time, with one exception. People who had no mortgage and a decent amount of cash in the bank were assuming mortgages for a dollar and renting the houses back to the people who couldnt afford the mortgage payment. Years later when the market turned around, those owners were sitting on piles of equity.

Anything can happen. People assume that Calgary will ALWAYS be rich. However as more an more houses are built the risk of a catastrophic real estate market increases. Even now there are people who are extended so far that if interest rates were to go up a couple of percentage points they also would be forced to sell their house. Add a couple thousand houses to the housing market and you will see prices plateau or even drop.

That being said, real estate is a decent investment. Just dont put all of your eggs in one basket. Most financial advisors will recommend that your home equiry be less than 50% of your total financial portfolio. So if you have $40,000 in equity... you should have at least $40,000 in cash, stocks, bonds or mutuals.

[Aleks]

I'm in the same boat. I am looking but I'm really picky as to what area I want and what kind of house. I think 1500sqft is plenty for starters (2 people).

[w3apon]

Go for the "small" house. Get it in a good location so the resale is better when you need to move up in 3-5 years.
Don't get a big house expecting to stay there for 10+ years when you get a family because no matter how nice the place is the new wife will want a different house that you get together.
IMO if you can afford the 300K+ house, stick with a house in the 220-250 range so you can still afford the toys and have a life until you get married.

[Aleks]

Originally posted by w3apon
Go for the "small" house. Get it in a good location so the resale is better when you need to move up in 3-5 years.
Don't get a big house expecting to stay there for 10+ years when you get a family because no matter how nice the place is the new wife will want a different house that you get together.
IMO if you can afford the 300K+ house, stick with a house in the 220-250 range so you can still afford the toys and have a life until you get married.

and then once you get married it's all over :devil:

[legendboy]

Buy the largest house you can afford.

[HRD2PLZ]

I would probably buy the smaller house. You build up equity faster and with a few upgrades you can get really good return on the resale side. If I were you, I wouldn't go too wild on a house, I hate seeing people "house poor" because they spent a little more on a house than they probably should have. Especially if you like constant change, in 5 years from now when you are married and possibly have children, you would be bored with your 2000 sq.ft. home and would be looking to move anyway...

[sputnik]

Originally posted by legendboy
Buy the largest house you can afford.

What do you mean when you say that? Do you think he should buy the biggest house he can afford while still being able to maintain the same standard of living he currently has? Or are you saying buy the biggest house possible and go out on weekends less and have more modest cars?

I say buy a house that allows you to maintain the same shopping and entertainment habits, but at the same time budget for at least $10,000 of "surprise" purchases or costs that will pop up after buying the house. Most people buy a new house and dont realize how much new sod, trees, shrubs, a new deck and a fence will cost. My backyard will cost me about $6000 and that is doing most of the work myself.

[Xtrema]

For a starter, I would stay in the $200K-$300K range.

That should get you a place about 1400-2000 sq ft may be with a single/double garage. Being single, I think the smaller house the better. Cleaning it is a bitch.

It's also the perfect range if you need to sell. You get more buyers in this range. Bigger homes $350K and up have a smaller audience and unless it's very well kept or something really special about the location, people who shop in this range would rather have a new house.

Stay away from houses older than 15 years. Too many fixes required and not as energy efficient, you don't want to waste money on utility bills.

Location also quite important. Stay out of NE, even the nice new areas. City council always like to zone them for industrial zones out of the blue, can hurt value of your property.

Close to school, public transportation alway prop up the value a bit (as long as it's not RIGHT in front of your house).

I don't know if you want to count Feng Shui into the equation because that will eliminate a good chunk of houses on the market. I used to be a non-believer but after seeing some real life examples, it started to make sense.

Oh, also, when you get married, your wife will properly force you to buy a new house anyway. So don't bet on staying put. Women tend to not like to live in a house where you may have had other pussies before her..... ;)

[legendboy]

Originally posted by sputnik


What do you mean when you say that? Do you think he should buy the biggest house he can afford while still being able to maintain the same standard of living he currently has? Or are you saying ............

Sorry I meant buy the largest house you can comfortably afford

[abyss]

Hampstor's house is around 1200sq ft and it's MORE than enough for us, I find it can get too big at times. We have 4 bedrooms, two of which have been practically empty for about 8 months. The other one is a spare bedroom/office, so it only gets used when someone stays over. Until you have to keep a house clean, you don't realize how big a "small" house can really be. If you're looking to relocate withing the next 5 years, I agree with WeaponR, but if you're planning on staying there and raising a family, I would look at the area before I took the size of the house too much into account.

[/////AMG]

lol, max_boost is probably stumped. Everyone goes their own way. But I think he will end up going for the smaller house, it just makes sense. Good luck man. :thumbsup:

[max_boost]

Great info, thanks everyone.

I've made an offer on a 1700sq.ft two storey split w/walkout basement. It's a bit more than what I wanted to spend ($320K list) but I hope things work out. It's a gorgeous place.

:clap:

[Xtrema]

^ Must be pretty close to the core?

[max_boost]

Nope! It's still in Riverbend. Home ownership sure comes at a premium, I hope the owner will kindly consider my offer and take $20K off the price. I will be all over it for $300k :D

[JordanLotoski]

wont happen for 300k, its been on the market 20 days. nobody in there right mind would let a house like that go for 20k below list in a market like this. my perdiction 314,900 is the bottom line for them..Good luck though.

Hope your realtor informed you that an offer like that can be taken very personally and be tossed instead of countered.

[Weapon_R]

Originally posted by MIWYFSHOT
wont happen for 300k, its been on the market 20 days. nobody in there right mind would let a house like that go for 20k below list in a market like this. my perdiction 314,900 is the bottom line for them..Good luck though.


Spoken like a true realtor. :D My parents got 20k off their home (list at 300k, sold for 280, on the market for about 6 days and purchased in 2000 [red-hot market] during the time.

[Z_Fan]

I know you have an offer in already, and that's great.


- Get a weekly mortgage, going monthly is wasting money hand over fist.

- Get a 15 year mortgage.

If you can not afford to add an additional $100/wk onto the payment under the above circumstances, you shouldn't be buying the house.

If you are paying monthly and got a 25 year mortgage, the only question I have is what color Ferrari would you have wanted if you weren't being so stupid? :dunno: LOL!

[JordanLotoski]

on the market for 6 days..whats the address i bet it was relisted at a lower price, hence showing listed for 6 days....anyways..i dont see that property going for 300k if it does, shit thats awesome. I know I just presented an offer on a home in lake bonivista, it was listed at 284,900, we put in an offer in at 274,900 it was rejected right away, not even a a counter offer. and that was 10k off asking.

This house max is putting an offer on is showing no history, so chances are these people have been living here for sometime now and take pride in what they have done to their place, a lowball offer can be taken very personally due to all the sweat and work thay have put into the home.

Again i hope it does work out for max, and id love to see him get the home for 300k. and iam sure if he does It this will come back to kick me in the ass hahahaha
:D

[max_boost]

I hope they don't take the offer price too personally, just part of the negotiation process? I really like this house, I'll see what their response is. I'm willing to pay list price but can't let them know that :D

I also plan to aggressively pay off the mortgage, it seems like a mountain of debt. 15 years sounds about right, depending how expensive kids get, cars, other investments etc.

[JordanLotoski]

hey dont let me scare you, worst case they toss it and you re-write.

BTW, its a great looking place. west backing yard and AC...thats living!

[JordanLotoski]

hey check PM...something better has just come on the market in riverbend....no joke.

[Xtrema]

http://www.mls.ca/PropertyDetails.aspx?vd=&SearchURL=%3fMode%3d0%26Page%3d1%26vs%3d1%26rlt%3d%26cp%3d%26pt%3d0%26mp%3d300000-350000-0%26mrt%3d-1-0-0%26Beds%3d0-0%26Baths%3d0-0%26f%3d%26ft%3dall%26o%3dA%26of%3d1%26ps%3d10%26ptgid%3d1%26aid%3d4895%26MapURL%3d&Mode=0&PropertyID=3560287

Nice house.

$300K is definitly what I would've offer. My house was bought @ $315K but $330 listed. But it's already $10K below market because of the very ugly yellow interior. Hire a pro to paint it for $3K and took care of that.

And remember, if the above listing is the correct house, it's built in 89, there may be some maintence expenses pretty soon. Espeically in the Windows area. My previous house was built in 92 and some windows are starting to show leaks with moisture trapped between panes of glass.

Unless you're really emotionally attached to it (Some houses will do that to you), stand firm. Hot deals are usually gone after the 1st weekend in spring (at least that's my experience in Hamptons) This unit is going into it's 4th week, I smell blood....

Also, beware of competing offers. I have had a few realtors try to pull that on me when he and another realtor show the home to us and another possible buyer who's on the fence at same time. Just to generate interest.

The home is fine but the basement is billed as professional built and it's not and they want $350K. It'll actually cost more for me to pull everything out and rebuild the basement. Amateur did a better job than this. I can see that kind of workmanship pass for a basement of a $150K home but not @ $350K. I'm talking about crooked walls here.

But as soon as the other party see us there, they get off the fence put an offer in right the way, falling for the pressure tactic. And strange thing is, the owner actually contacted my realtor wanting to know if we want to put in an offer. I said screw that, not unless it's under $300K. The house is sold a few days later and I assume it's the same guy who bought it.

I also run into a few bidding wars on rental properties but I usually just walk away unless the place is really undervalue (doesn't happen very often).

[/////AMG]

split level with walk-out, can't go wrong man! We used to have a walk-out, they're uber pimp.
Good luck with the negotiations

[Z_Fan]

Originally posted by max_boost
I also plan to aggressively pay off the mortgage, it seems like a mountain of debt. 15 years sounds about right, depending how expensive kids get, cars, other investments etc.

Getting aggressive with your mortgage is good.

When interest rates were actually high, it was even more important!

As for your offer being low ... you never know how people are going to react ... and you can't control that in the first place.

Good luck!

[Z_Fan]

I was just looking at the link provided above and had a nice chuckle.

Firstly, we used to live on Riverside Circle - and in an almost identical style house!! (Except it wasn't yellow LOL)

Two things you should know. That particular build of house was the smallest house permitted (or very close to the smallest) to be built on those properties. For that reason, the houses of that style are actually harder to sell because all the houses around it are considerably larger. (You probably knew this if you checked) Also, the larger houses should be considerably more expensive!!

The other thing - particularly with Riverside Circle which I absolutely hated...and definitely worthy of note...

Introduce yourself to the concept of Caddis (spelling?) Flies.

These things haunt that area of Riverbend, but especially the houses backing on to the River area ... which all the outter houses of Riverside Circle do. I guess that one isn't on the outter though is ... those are the odd numbers on the outside if I recall.

I don't know how long the season lasts, or exactly when it is, (But I would suspect it lasts 1 - 1.5 months and is probably close to starting)

The bugs would actually number so greatly they could almost change the fricken' color of your house. (Embelishment) But where we lived, which is really only about 8 houses away from that house - as you walked into the front door, these things would swarm (they sit on the exterior walls of the house and react to movement).

I moved from Riverbend in 1997. In the early years, like 1989 - 1992 (when those houses were built) the bugs were so horrible that most owners complained to the city. Nothing was done, and I am sure the bugs still come by the millions every year.

They are annoying!

[90awdwagovan.]

Originally posted by Carfanman
I dont think you should buy it based on financial reasons. The market could very well go down, its risky.

There is nothing risky about buying a house, as long as the city is growing (which is 99.5% of cities) the value always goes up. I"m sure glad you're going to finish highschool

[TrevorK]

Originally posted by 90awdwagovan.


There is nothing risky about buying a house, as long as the city is growing (which is 99.5% of cities) the value always goes up. I"m sure glad you're going to finish highschool

What?

Housing is a cyclical market - it goes up AND goes down.

In the long term, yes, it'll go up. However what if you needed to sell when housing was at a low point?

[sputnik]

Something to think about when buying homes.

Avoid buying the best house in a specific area. Generally if someone is going to spend $300k+ for a house they would be more interested in being surrounded by $400-500k houses instead of $180k starter homes in an area that neighbours other shabby areas. Would you really want to spend $300k in Applewood to be next to the dump? Or spend good money in Ogden or Lynnview?

Instead buy the "worst" house on the best street. A friend of mine picked up an older (but VERY well kept) home in Lakeview for under $300k (a STEAL) and is surrounded by houses selling for over $400-450k. Generally people will choose the area first and then look for a house that fits their budget.

[Aleks]

Originally posted by MIWYFSHOT
hey check PM...something better has just come on the market in riverbend....no joke.

I have a question about double agency. Lets say we're looking for a place. It's 250K. I offer 240K another person offers the same with their own agent. I don't have one so the agent selling the place becomes my agent. Does this mean my offer is actually 5K (roughly) better because the agent only gets paid once. IE one comission instead of two agents gettting comissions...

Thanks

[HRD2PLZ]

Originally posted by Aleks


I have a question about double agency. Lets say we're looking for a place. It's 250K. I offer 240K another person offers the same with their own agent. I don't have one so the agent selling the place becomes my agent. Does this mean my offer is actually 5K (roughly) better because the agent only gets paid once. IE one comission instead of two agents gettting comissions...

Thanks

Unless the dual agent cuts his commission to get both ends of the sale, then the offer is the same. Most people I have worked with would rather see their agent get both sides of the deal. Since, its money they would pay out anyway...

[Xtrema]

Originally posted by Aleks


I have a question about double agency. Lets say we're looking for a place. It's 250K. I offer 240K another person offers the same with their own agent. I don't have one so the agent selling the place becomes my agent. Does this mean my offer is actually 5K (roughly) better because the agent only gets paid once. IE one comission instead of two agents gettting comissions...

Thanks

Commisson for $240K is about $11K. If that were split between the agents evenly, that'll be $5.5K each. So in theory, it's the seller's agent's interest to sell it to you. That's if the split is 50/50, they may work out 70/30 so your advantage dimmishes. To the owner, it's pretty much the same either way.

But..... if the other buyer offers more than you do, say extra $5K goes to owner, the owner will sell to the highest bidder anyway since in the end, it's the owner's decision.

So don't assume you have an advantage because you only go thru 1 agent.

[max_boost]

Things didn't quite work out with a couple of the properties I've been looking at. Now I'm considering possibly building or waiting for a few more months to see what other listings come on the market. In the meantime, going to move to a place in Tuxedo and see how I like it since I've always wanted to live close to downtown.

[jumperman8]

GET a huge house, that is so ridiculously big that you can alwasy have visitors.

[Aleks]

Originally posted by Xtrema


Commisson for $240K is about $11K. If that were split between the agents evenly, that'll be $5.5K each. So in theory, it's the seller's agent's interest to sell it to you. That's if the split is 50/50, they may work out 70/30 so your advantage dimmishes. To the owner, it's pretty much the same either way.

But..... if the other buyer offers more than you do, say extra $5K goes to owner, the owner will sell to the highest bidder anyway since in the end, it's the owner's decision.

So don't assume you have an advantage because you only go thru 1 agent.


All i wanted to know is this. Say the house is 240, commision would be 11K. If the split is 50/50 each agent gets 5.5K Now take away one agent. That 5.5K could go to the owner of the house in its entirety if the agent is motivated to move the house, or he could try and take all of 11K, or some other split...

[HRD2PLZ]

Originally posted by Aleks



All i wanted to know is this. Say the house is 240, commision would be 11K. If the split is 50/50 each agent gets 5.5K Now take away one agent. That 5.5K could go to the owner of the house in its entirety if the agent is motivated to move the house, or he could try and take all of 11K, or some other split...

I think the agent would have to be extremely motivated to give away half of their commission for a deal. Especially acting as a dual agent. Of course, this doesn't rule out the possibility of a commission reduction by the agent, which would almost always go back to the seller. As an agent, it can become a sticky situation when you are selling your own listing. It usually works out better to sell someone elses listing, then you get the full commission from each side.

[Aleks]

Thanks for clearing that up. :thumbsup:

[69cougar]

I am surprised no one here has talked about CMHC fees and how that comes into the equation.

If you can afford to put 25% down of the lower priced house and avoid these bastard fees then I would go that way.

When we bough our house our downpayment was = to the CMHC fees so they canceeled one another out and we didn't get ahead with our downpayment.

Given this depens on how much you have got saved

:guns: :guns: :guns: CMHC

Just my 0.02

[Aleks]

^ for a house hunting newb can you please elaborate on this fee? what is it?

[sputnik]

If you have less than a 25% down payment you are required to pay CMHC fees to insure your mortgage.

http://cmhc.ca/en/bureho/buho/hobustst/hobustst_002.cfm

[69cougar]

It's a fucking SCAM IMO.

Like I said

:guns: :guns: CMHC :whipped:

[abyss]

Weren't they planning on getting rid of the mandatory 25%/CMHC fees around a year ago? I remember my parents were upset because they had saved 25% to buy their new house, and then I heard on the radio that they were cancelling that requirement. I guess the link proves otherwise, but does anyone else remember hearing about that?

[sputnik]

How is that a scam? The real estate market fluctuates and the banks have to protect themselves from a dive in the market and a number of people being unable to make the payments.

[GoChris]

lol i might have done that calculation thing wrong, but i have -880 available for housing. ya thats negative! lol.

ouch, my car+insurance is a mortgage payment right there...maybe time to sell my car :(

[sputnik]

Originally posted by GoChris
lol i might have done that calculation thing wrong, but i have -880 available for housing. ya thats negative! lol.

ouch, my car+insurance is a mortgage payment right there...maybe time to sell my car :(

This calculator will tell you how much house you can buy. However before you get too excited, make sure you take 25% off the number they give you if you want to live comfortably.

http://www.ingdirect.ca/en/calculators/maxmorten/maxmor.html

[Aleks]

Originally posted by GoChris
lol i might have done that calculation thing wrong, but i have -880 available for housing. ya thats negative! lol.

ouch, my car+insurance is a mortgage payment right there...maybe time to sell my car :(

yeah mine came out negative until I realized I was doing it wrong. In the TDS section the A line gets loaded wrong. You have to re enter your monthly income (A) in there yourself otherwise it will be wrong.

[Xtrema]

Originally posted by abyss
Weren't they planning on getting rid of the mandatory 25%/CMHC fees around a year ago? I remember my parents were upset because they had saved 25% to buy their new house, and then I heard on the radio that they were cancelling that requirement. I guess the link proves otherwise, but does anyone else remember hearing about that?

I believe it was elimination of mandatory 5% down. You now get own a home with 0 down but I believe it increases the CMHC insurance you have to pay on.

[HRD2PLZ]

Qualified buyers may purchase a home with 0 down, usually the interest rate (bank) is higher. CMHC just reduced their Mortgage Insurance fees, which is what some of you may have heard. If you can, I would definitely put 25% down. At the very minimum 5%, when you go 0 down things can get tight. Its is great though, for people who have good incomes but have a hard time saving up the money for a down payment :thumbsup: