Friday, September 25, 2009

No house for you

So I've hinted there were things a brewing up here the past week, adding to the general feeling of chaos. And I guess now I can tell the tale.

We nearly bought a house. Nearly. And it certainly wasn't from lack of trying on our part on why we don't have one right now.

I mentioned last week that a friend of mine had sent me a poster for the house her and her husband were trying to sell. On a lark, Cathy and I decided to go down and see the house on Saturday. We honestly weren't in the market for a house. Cathy's been getting itchy feet the last few months, but we figured it was going to be the spring before we started doing some serious sniffing around for one.

But we went and looked at their place on Saturday. While I won't say it was love at first sight, we fell surprisingly head over heels for the place. It wasn't perfect, no house is. Cathy could certainly make a solid of list of things she was going to fix or change. However, the couple had already put a lot of work in the house over the past few years. The outside might not have looked like much, but the inside was very nice. Plus, it had a view of the bay, a fireplace, a library and a deck. Oh, and it was in nice neighbourhood and on the Utilador, which is a big bonus. I don't really fancy having water delivered and sewage removed if I can help it when we buy a house. I know simply too many people who have had problems.

The place was also about 25 years old. Which I liked, actually. I've heard horror stories about some of the new houses built in Iqaluit. About how they were built too quickly or not on solid enough ground so after a few years there's massive cracks happening in the ceiling or walls as the foundation shifts. This place was solid.

So we came home and looked at each other in shock because trying to buy a house was not on the list of things to do. First of all, we knew nothing about how to go about doing this. Thus began a crash course that weekend on mortgages and how to buy a house without looking like an idiot and getting taken for a ride.

Then we had to figure out how to do an Offer to Purchase, worry about lawyers, find the money for a downpayment and get into a bank. For that matter, there is the little matter of me being unemployed. Cathy is making good money, but I didn't think it was a lock to give us the money with only one salary.

Finally, we knew there was a lot of interest in the place. The other thing that drew us was the price. At $360,000 it might seem like an insane amount of money for some, but in Iqaluit, that's very reasonable. The couple was also just trying to sell the house on their own. No Realtor. Nor did they want a bidding war. They just wanted to sell their house with as little fuss as possible.

The first hiccup was one that I should have expected given that we live in Nunavut. I went to our bank - CIBC - to make an appointment with their mortgage specialist. However, it seems she was away on vacation. Now, I don't begrudge someone going on vacation. Apparently it was her first in three years. However, they didn't have anyone at the branch who could cover her duties. So while she was away, the bank could not do mortgages.

I've banked with CIBC for 35 years. Now I'm beginning to wonder if giving them my money is such a bright idea when you can't plan to have someone cover off your only mortgage specialist so the poor woman can go on vacation.


So we had to go to Royal Bank. But they couldn't meet us until Tuesday. And because of that, we were essentially too late. By the time we got the financing - Royal Bank gave us just a silly amount of money - and got our offer in, someone had put in a similar one ahead of us. So the couple decided to go with that one.

So that was disappointing. I think they did it in a very fair manner, it's just the way these things go sometimes. I told Cathy the odds of buying the very first house we've ever looked at as a couple was astronomical. But we really did start to think we had a chance. We were planning a housewarming/Christmas part in December.

And then poof. Ah well.

So what did we learn from this experience?
1. Apparently we can get a huge amount of money from banks with no problem.
2. It was reassuring to know we could whip up a $70,000+ downpayment pretty easily. Nice to know we've been doing more than travelling around the world and buying lots of books over the past four years.
3. I now have a better idea of what an Offer to Purchase is and I'm not quite so fearful of it if we have to do another one.
4. We have the names of several lawyers should we need them in the future.
5. At least we know now what we're looking for in a house. We would like a view. We want to be on the Utilador. We would prefer a house five years or older so we have an idea if there's going to be problems with the place. We want a balcony. And, you know, a little bit of quirkiness. It was nice to look at a house that was obviously not Plan #32456 from some housing plan book.

Anyway, we're back to the waiting game. Things might change, but I suspect we'll start looking again around March or April. Still, it was an interesting experience to go through, even if it didn't end the way we had hoped.

Last Five
1. Dancing in the street - Van Halen
2. Scenes from an Italian restaurant - Billy Joel
3. Deep blue sea - Grizzly Bear
4. Search and destroy - Peaches
5. Better than this - Keane


Anonymous said...

Hey Townie:

As someone who was in the mtge financing game for a number of years, here are a couple of other tips:

- about 60% of realtors either scumbags or lazy asses and cannot get that commission fast enough fr the least amount of work. Find the ones who actually work for the commission

-The commission is very negotiable. Just don't accept what they say. You can knock at least a percent off if you try hard enough or have some leverage.

-The price of the house is very negotiable most times and do not allow them ie realtor to pressure you too much. You have to read the tea leaves because sometimes you have to jump but not always.

-Mtge rates are extremely negotiatable. You should be able to get at least 130 basis points off a five year fixed mtge.

-Makes sure you have a good lawyer and you may look into insurance on the deed which many lawyers offer.

-Always get a property inspection. Never allow a real estate agent to pressure you into not having one. And check around with your lawyer and others to see who is reputable. Never accept the one the realtor offers. They may be getting referrals from the agent and because they want to continue getting them their judgement may be compromised.

towniebastard said...

Thanks for the tips. I really do appreciate them. However, Iqaluit offers up certain challenges. For instance, I believe there is only one Realtor in town right now. There is, to be the best of my knowledge, only two houses for sale in town right now.

For ages there was no lawyer in town who handled real estate, although I think there is now. It means previously most real estate law was done out of Ottawa. Oh, and I was told there's only one person in town who does home inspections, that he's often not in town and he's very expensive.

And that's before you get into land leases, which mercifully we didn't have to deal with on this occasion.

So let's just say real estate is a tangly business. But again, advice is always welcome.

tanker belle said...

I get everything - except the balcony?!?

When in Ottawa the apt building we were in did something I consider much smarter. While our apt was very small it did have a very nice feature in the atrium. In the exact place where a balcony would normally have been was instead a glassed-in atrium, usable throughout the whole year instead of 6 months. Whathaveyagot up there summer-wise, 6 weeks?

Anonymous said...

Sorry to read about the house..down South I have done the opposite, decided to jump into the market and buy a place, less then a month later, throw my name out for a job posting north. But my grown kids will occupy the house, in later days (or years) I will come back down and sell it once they decide to move on.

I too was astonished at how much the bank was willing to give me! Now CMHC, there's another matter! And what happens with regards to CMHC up North? They play a part in many of the mortgages being secured and insured down south...

CMHC actually got me a better deal on the house by doing an appraisal and deciding the house was worth 30k less ( a private sale and the house needs cosmetic upgrades~ very good bones though...)

True enough, you can pretty much do everything with a bank and a lawyer...

Jackie S. Quire said...

Aw well, that's too bad. I was hoping that would work out for you, but now you don't have to worry about breaking up Blogging HQ!